Important Developments in the Accountancy Sector: IESBA Guidelines on Tax Planning and Related Services

The International Ethics Standards Board for Accountants (IESBA) recently released guidelines on tax planning and related services revisions to the International Code of Ethics for Professional Accountants, marking a significant development in the field of taxation. This move comes in response to the need to address the ethical implications of aggressive tax planning by professional accountants, both in business and public practice.

The release of these guidelines follows a series of high-profile scandals, including the leak of data from the Panama Papers, Paradise Papers, Pandora Box Papers, and the HSBC case in Switzerland, which exposed widespread global tax evasion and money laundering practices. These scandals implicated a significant number of tax consultants and professionals in facilitating these irregularities.

In the Philippines, recent efforts by BIR Commissioner Romeo Lumagui Jr. against fake “ghost” receipts and untaxed excisable articles have revealed the involvement of accountants and tax advisors in aiding tax crimes. The IESBA’s Tax Planning Standards aim to provide a principles-based framework and global ethical benchmark for tax planning services, emphasizing the consideration of public interest and potential consequences for clients or employing organizations.

The guidelines will be effective for tax planning activities or services beginning after June 30, 2025, with the Philippine Institute of Certified Public Accountants (PICPA) leading the compilation of comments for public review. Stakeholders in the accountancy and tax community are encouraged to participate in the process of adopting these guidelines, which will benefit organizations like the Bureau of Internal Revenue in promoting ethical tax planning practices.

Former BIR Commissioner Joel L. Tan-Torres, a seasoned tax professional, emphasizes the importance of adopting these guidelines to enhance the country’s standing in the global tax community and combat irregular and unethical tax practices. Stay tuned for more updates on this evolving story.