PwC puts 1329 tax staff through new compliance program after confidentiality breach

The Tax Practitioners Board publishes PwC Australia’s report into its new compliance program for tax staff after being found to have misused confidential government tax briefings.

PwC Australia has banned its client facing tax staff and partners from confidential working groups over tax policy under its new compliance rules brought in after the firm was revealed to have misused government briefings to shape strategies for clients, a new report reveals.

In its response to the Tax Practitioners Board’s demand that the firm undertake a tax compliance program for its staff, PwC has revealed a raft of warnings for staff and partners over confidentiality breaches.

The TPB ordered PwC to prepare “processes and training” in November last year “to ensure conflicts of interest are adequately managed” by the firm.

This came after the TPB banned PwC’s former international tax practice boss Peter Collins for two years and stripped him of his registration as a tax agent, after finding he misused confidential government tax briefings and shared them with members of the firm.

PwC used this early access to information around the government’s plans to introduce the Multinational Anti-Avoidance Law to put in place strategies for corporate clients to attempt to minimise their potential tax paid.

The report into the program, published on Tuesday, shows at least 1329 staff and partners at PwC had completed the training by the end of June.

However, a further 89 PwC staff and partners who were on leave during the training period of May to June are yet to complete the compliance program.

Throughout the staff training program, PwC has included a number of warnings for staff over their confidentiality obligations, according to the report.

PwC warned staff that they require approval to enter into any confidentiality deeds, with clearance required from senior partners.

“If we have signed a confidentiality agreement we must be aware of our confidentiality obligations under PwC’s policies, the TPB’s Code of Professional Conduct and the terms of the confidentiality agreement,” the compliance module stresses.

The program warned PwC staff “confidential information is not limited to client information”.

“It may also extend to any information you receive when you are working on a tax confidential consultation with government or a regulator where you have entered into a confidentiality agreement,” PwC’s compliance program said.

“In some circumstances, disclosure of confidential information can constitute a criminal offence.”

The Tax Practitioners Board has published PwC Australia’s report into its new compliance program for tax staff after it was found to have misused confidential government tax briefings to create strategies for clients. Picture: Damian Shaw/NCA NewsWire

The compliance program also revealed that PwC has put in place an effective ban on its client-facing partners from working on confidential consultation programs.

One question, posed around potential consultations with the Australian Taxation Office “to consult on a confidential basis on the regulatory reform of an existing tax law”, which could impact potential clients PwC staff, clearly states out the firm’s ban.

“Approval will NOT be given for a partner or staff member to enter into a confidentiality obligation in relation to a tax confidential consultation where that partner has a client facing role and where the subject of the consultation could be relevant to their clients,” the module said.

A PwC spokeswoman said the firm was publishing the report “as we continue to enhance the firm’s transparency and culture”.

The publishing of the report comes as PwC faces a broader probe by the TPB as well as an investigation into it by the Australian Federal Police, as well as a number of parliamentary inquiries seeking to grapple with the firm’s breach as well as the broader consulting sector.

TPB chair Peter de Cure said PwC had “agreed to proactive transparency” with the regulator.

“This report shows steps PwC has taken to comply with the TPB’s Order, including additional training on legal and ethical issues for over 1,300 personnel,” he said.

“The Compliance Report states that PwC have improved their management of confidential consultations with government, including a central approval and registry process, and oversight by their Executive Board.”

Mr de Cure said the TPB was pleased with the improvements made by PwC “and all tax practitioners, to enhance professional standards, including integrity, confidentiality and conflict of interest management”.

Speaking to The Australian in June, after taking on the top job at the TPB, Mr de Cure warned the TPB could look to sanction other members of the firm if further breaches were identified by its investigations.

PwC has stood down a number of partners over the breach, including former chief executive Tom Seymour, as well as removing several from the firm’s retirement scheme.