Tax Practitioners Board issues cloud services guidance

The chair of the Tax Practitioners Board, Ian Taylor, has released guidance for tax practitioners to help them understand their obligations regarding the use of cloud computing.

The new guidance covers tax practitioners’ obligations under their Code of Professional Conduct in relation to cloud computing.

It outlines considerations for tax practitioners when entering into cloud arrangements, as well as the consequences for having inadequate arrangements.

Such factors include the details of any limitation of liability arrangements in cloud contracts, whether providers are allowed to unilaterally change the agreement terms, as well as data sovereignty, security and integrity concerns.

Under their code of obligations, registered tax practitioners must not disclose any information relating to a client’s affairs to a third party without a client’s permission. This includes cloud storage and other service providers.

Practitioners should therefore receive permission from each client before divulging client information to cloud service providers, the practice note states. During this permission-seeking process practitioners should be clear about the terms of the proposed disclosure, including where off-site data will be stored.

“We are pleased to release the practice note to assist tax practitioners in understanding relevant obligations when operating in a cloud environment,” Taylor said.

“The practice note provides practical assistance to tax practitioners, raising awareness of relevant considerations when entering into cloud arrangements and outlining where to find further information.”

Image courtesy of Phillip Ingham under CC