A tax agent's AML/CTF obligations attach to designated services, not to the registration with the Tax Practitioners Board. That makes the checklist a service-by-service discipline: every engagement must be tested, and the captured ones must run through enrolment, risk, CDD, reporting and records. This checklist gives tax practices a repeatable sequence and a file structure AUSTRAC can follow. It is a practical tool, not legal advice, and each item should be confirmed against the current Act, Rules and AUSTRAC guidance.
Before the service: scope and enrol
Routine tax return preparation, BAS lodgement and general tax advice are not designated services on their own. The practice becomes a reporting entity when it provides a designated service - for example, taking active steps that directly advance creation of a company or express trust, including the trust component of an SMSF.
- Test each engagement against table 6: entity formation, restructuring, specified transactions, item 7 and 8 roles, and item 9 address services
- Record the service decision and the boundary for routine tax work
- Confirm enrolment with AUSTRAC and the compliance officer appointment
- Check whether the practice risk assessment covers the services actually offered
Onboarding: identify before you act
Verification does not require buying electronic checks. A documented manual path can satisfy the obligation, but the file must show what was verified, from which source, and when. Keep the identity evidence connected to the exact client and the service.
- Identify the client and verify identity before providing the designated service
- For companies and trusts, map beneficial owners and controllers
- Screen customers and beneficial owners for PEPs, sanctions and adverse media
- Record the risk rating and the reason for it
During the relationship: monitor and report
Tax practices are not immune to suspicious activity: a client's 'restructure' can be a layering exercise, and a trust can be a shell. The obligation is to assess the pattern, not to assume the professional relationship explains it.
- Apply ongoing CDD on risk-based cycles and trigger events
- Review source-of-funds explanations where the engagement or payments are unusual
- Lodge an SMR within three business days (24 hours for terrorism financing) where suspicion forms
- Report a TTR for A$10,000 or more of physical currency connected to a designated service
- Protect SMR-related information from tipping off
Records and training
AUSTRAC can ask a tax practice to demonstrate how a scope decision was made and why a file was or was not escalated. A checklist is only as good as the evidence it produces, so treat every step as a record to keep, not a box to tick.
- Retain CDD, transaction, reporting and training records for the required period
- Store evidence with restricted access and an audit trail
- Deliver role-based AML/CTF training and record completion
- Set the independent-evaluation and review calendar
Official sources
Confirm the current rules against these primary sources.
Questions
Does every tax engagement need AML/CTF checks?
No. The trigger is a designated service. Routine tax returns and BAS lodgements are not designated on their own. Each engagement should be tested and the decision recorded.
What is the most common AML gap in tax practices?
Treating an SMSF or company 'setup' as routine administration when the practice's active steps directly advance the creation of the legal structure. The scope analysis and the CDD file must match.
Can we verify identity after the return is lodged?
Initial CDD must be completed before providing the designated service, subject to limited delayed-CDD rules and transitional provisions. Delayed CDD is not a general convenience.
What records should a tax practice keep for AUSTRAC?
The service-scope record, risk assessment, program, CDD and verification evidence, transaction and report records, and training records for the applicable retention periods - commonly seven years.
General information for Australian professionals, not legal advice. It does not replace the AML/CTF Act, the Rules or AUSTRAC guidance. See our editorial standards.
Keep reading
- For tax agents5 min
Which tax agent services are designated under Tranche 2, how to distinguish routine tax advice from captured work, and the obligations Australian tax practices must meet from 1 July 2026.
- Company, trust and SMSF formation5 min
A service-based guide to when tax-agent work creating a company, trust or SMSF becomes a professional designated service and what must happen before the work starts.
- New entity checklist4 min
The practical first-90-days checklist for practices that became reporting entities under Tranche 2: enrolment, governance, risk, CDD, training and records.