AML Tranche 2 for accountants: which services are designated?

From 31 March 2026, AML/CTF Tranche 2 makes your practice an AUSTRAC reporting entity only where you provide a "designated service". The nine professional-services ones are in s 6(5B) of the AML/CTF Act, and the ones that reach accountants are creating or restructuring a company or trust, acting on the sale or transfer of a company or trust, arranging equity or debt finance for one, holding client money as part of a transaction, acting as a nominee, and providing a registered office. Preparing tax returns, financial statements and tax advice, and doing BAS, bookkeeping, audit and payroll, are not designated services.

By Jon Oates, Founder of Privaproof · Last updated 9 September 2026

General information, document templates and tools you tailor, not legal advice. Privaproof is not a law practice.

Need to know

AML Tranche 2 makes an accounting practice an AUSTRAC reporting entity only where it provides a designated service, so the obligation attaches to the service, not to being an accountant, and many practices are not caught at all.
Preparing tax returns and financial statements, giving tax advice, and doing BAS/GST, bookkeeping, audit and payroll are not designated services, because they are not listed in the table.
The nine professional-services designated services are in s 6(5B) of the AML/CTF Act: acting on a transfer of real estate or of a company or trust, holding client money as part of a transaction, arranging equity or debt finance for a company or trust, selling a shelf company, creating or restructuring a company or trust, acting as a nominee, and providing a registered office. The working test is advice out, execution in.
Where a designated service makes an otherwise-exempt small practice a reporting entity, Privacy Act s 6E(1A) applies the Act in relation to the activities carried on for the purposes of, or in connection with, the AML/CTF Act, rather than to your general tax, ledger, payroll or CRM records, and enrolment opened 31 March 2026 with existing providers enrolling by around 29 July 2026 (confirm your firm's date with AUSTRAC).

The regime regulates services, not professions

Tranche 2 of the reforms to the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) brought the professional-services designated services into effect on 31 March 2026, with the AML/CTF obligations themselves starting 1 July 2026. The professional-services provisions were inserted by the Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024 (Cth) and sit in s 6(5B) of the AML/CTF Act, as Table 6, Professional services. The point that trips people up: the obligation attaches to the service, not to the job title. Being an accountant, bookkeeper or tax agent does not make you a reporting entity. Providing a designated service does. A general practice is therefore caught, if at all, only for the engagements on which it provides a designated service, and a practice that provides none is not caught at all.

The services that are designated

Nine professional-services designated services sit in s 6(5B) of the AML/CTF Act, in Table 6. In the Act's order:

Item 1, real estate. Acting on a transaction to sell, buy or otherwise transfer real estate. Not where the transfer is pursuant to, or results from, an order of a court or tribunal.
Item 2, a company or trust. Acting on a transaction to sell, buy or otherwise transfer a body corporate or legal arrangement. Same court-order exclusion.
Item 3, client money and property. Receiving, holding and controlling (including disbursing) or managing a client's money, accounts, securities, securities accounts, virtual assets or other property, as part of assisting them in the planning or execution of a transaction, or otherwise acting for them in a transaction. Heavily qualified by s 6(5C): see the limits below.
Item 4, equity or debt financing. Assisting with equity or debt financing relating to a body corporate or legal arrangement, including a proposed one.
Item 5, shelf companies. Selling or transferring a shelf company.
Item 6, creation or restructuring. Assisting to create or restructure a body corporate or legal arrangement. For a newly created company the customer also includes its beneficial owners and directors; for a newly created express trust, the trustee, settlor and beneficiaries.
Item 7, nominee roles. Acting as, or arranging someone to act as, a director or secretary of a company, a power of attorney of a body corporate or legal arrangement, a partner in a partnership, a trustee of an express trust, or a functionally equivalent position in another legal arrangement. Item 7 does not apply in a circumstance covered by s 6(5E).
Item 8, nominee shareholder. Acting as, or arranging someone to act as, a nominee shareholder of a body corporate or legal arrangement.
Item 9, registered office. Providing a registered office address or principal place of business address of a body corporate or legal arrangement.

Each item requires the service to be provided in the course of carrying on a business, and items 1 to 4 all require it to be part of planning or executing a transaction, or acting for someone in a transaction.

Two of these are described loosely almost everywhere, including by us until 9 August 2026

"Helps buy or sell a business" overstates item 2. The object of item 2 is a body corporate or legal arrangement. A great many small-business sales are asset sales: goodwill, plant, client list, lease assignment, with no share transfer and no entity changing hands. On the words of the item that is not a transfer of a body corporate. ⚠️ We have read the item, not the Explanatory Memorandum behind it, so do not treat an asset sale as safely outside the regime on the strength of the words alone; confirm your own position with AUSTRAC or your AML adviser.

"Arranging finance" overstates item 4. Item 4 is equity or debt financing relating to a body corporate or legal arrangement. Helping a client with a home loan or personal equipment finance is arranging finance and is not item 4 on that fact alone.

The client-money service has wide limits, and they matter more than the service does

Item 3 does not apply in any circumstance covered by s 6(5C). Those circumstances include:

The money is payment for goods or services the business itself provides. A client paying your fee is outside item 3.
The business provides no designated service other than item 3, and the money is for payments reasonably incidental to a service that is not a designated service. The Act's own examples of this limb are fees paid to a barrister for representation in legal proceedings, and property management services. ⚠️ This limb holds only while item 3 is the only designated service the business provides, so a practice that also, say, forms companies under item 6 cannot rely on it.
The money is receivable or payable under a court or tribunal order.
The service is the receipt or disbursement of a payment listed in s 6(5D), which covers payments to or from a government body, a court or tribunal, a public international organisation, or a licensed insurer.
The money handling forms part of another designated service, in which case that service governs instead.

📌 Two of these limbs do most of the work for an accounting practice. Under s 6(5C)(a) money a client pays you for your own services, your fee, is outside item 3 altogether. Under s 6(5C)(d) with s 6(5D), a service that is the receipt or disbursement of a payment to or from a government body, which is the shape an ATO refund or a payment of a client's tax debt takes, is also outside it. Whether a given engagement fits either limb depends on what the practice actually does with the money, so work it through against s 6(5C) or with your AML adviser. What is clear on the words of item 3 is that holding client funds does not by itself make you a reporting entity, because item 3 only reaches money handled as part of planning or executing a transaction.

⚠️ s 6(5C)(f) lets the AML/CTF Rules add further excluded circumstances. The rules instrument is the AML/CTF Rules 2025 (F2025L01026), as amended, not the 2007 instrument. Work from the current compilation and check it for your own service mix.

Three further limits sit outside Table 6 entirely: s 6(6) requires an Australian geographical link, s 6(6A) excludes services provided between members of the same business group, and s 6(6B) excludes a barrister acting on a solicitor's instructions.

The services that are not designated

This is where most vendor messaging overstates the position. The following are not designated services:

Preparing and lodging tax returns.
Preparing financial statements.
Giving tax advice.
BAS and GST work.
Bookkeeping.
Audit.
Payroll.

A practice that does only this work is not an AUSTRAC reporting entity and does not enrol. Routine tax compliance and bookkeeping sit entirely outside the nine items. Do not let an AML kit vendor tell you the whole profession is now inside AML.

The line that decides it: advice out, execution in

If you cannot tell whether an engagement is designated, the working test is advice out, execution in. Advising a client on whether to restructure into a company or trust is not a designated service. Actually forming or restructuring that entity, or holding the client's funds to do it, is. The same client, the same matter, can sit on either side of the line depending on what you actually do. Because the trigger is the service, a single practice can provide a designated service on one engagement and none on the next.

What being a reporting entity does to your Privacy Act position

Being caught by AML is not the end of the story, because it pulls a privacy obligation in behind it. Where a designated service makes an otherwise-exempt small practice a reporting entity, Privacy Act s 6E(1A) treats you as an organisation, but only for the activities you carry on for the purposes of, or in connection with, the AML/CTF Act. So the Australian Privacy Principles reach the AML/KYC/CDD identity data you collect for that service, not your general tax files, ledgers, payroll or CRM, which stay under the small-business exemption unless a separate exemption trigger such as the s 6D turnover test applies. The TFN Rule is a different animal: it binds you as a file number recipient under s 18 without making you an APP entity, so it sits alongside the exemption rather than removing it. Read: does becoming an AML reporting entity trigger the Privacy Act for accountants?

This is the gap the AML software leaves open. An AML kit gets you enrolled and sets up your KYC collection; it does not deliver the privacy policy, collection notices and breach plan the Privacy Act then expects for that AML/KYC data. Read: AML kit vs privacy kit, what your AML software leaves out.

Enrolment timing

Enrolment for newly regulated firms opened 31 March 2026, the same day the professional-services table commenced. A practice that was already providing a designated service before 1 July 2026 had to be enrolled with AUSTRAC by 29 July 2026, a date fixed outright by the amending Act (Schedule 3, Part 4, item 12) rather than counted from when it started. A practice that begins providing a designated service outside that group falls under s 51B(1) instead, which AUSTRAC states as applying to enrol no later than 28 days after the day you start providing a designated service. Accountants enrol onto the Reporting Entities Roll; registration is a separate status that applies to remittance and digital-currency providers, not to accounting practices. Confirm your own enrolment position, and the timing of any compliance-officer notification, directly with AUSTRAC.

At a glance

Question	The accurate answer
Does AML Tranche 2 catch all accountants?	No. It catches a practice only where it provides a designated service. Most tax and bookkeeping practices provide none.
Are tax returns, BAS and bookkeeping designated?	No. They are outside the designated-service table.
What is a designated service, roughly?	One of the nine in s 6(5B): acting on a transfer of real estate or of a company or trust, holding client money as part of a transaction, arranging equity or debt finance for a company or trust, selling a shelf company, creating or restructuring a company or trust, acting as a nominee director or shareholder, or providing a registered office.
If I am caught, what does the Privacy Act reach?	Under s 6E, the AML/KYC identity data you collect for the designated service, not your whole practice.
When do I enrol?	Enrolment opened 31 March 2026. A practice already providing a designated service before 1 July 2026 had to be enrolled by 29 July 2026, a date fixed by the amending Act. Anyone starting later falls under the s 51B(1) 28-day rule. Confirm your firm's position with AUSTRAC.

Common questions

Is my whole firm regulated once I provide one designated service?

No. Being a reporting entity does not remove the small-business exemption across the practice. Under Privacy Act s 6E the Privacy Act reaches the AML/KYC identity data you collect for the designated service, not your general tax, ledger, payroll or CRM records.

I set up companies and SMSF corporate trustees for clients. Am I caught?

Setting up or restructuring a company or trust, including an SMSF corporate trustee, is item 6 of the table in s 6(5B): assisting a person to plan or execute the creation or restructuring of a body corporate or legal arrangement, in the course of carrying on a business. Item 6 also widens who the customer is: for a company you create, the customer includes its beneficial owners and directors; for an express trust you create, the trustee, settlor and beneficiaries. Advising on whether to restructure is not item 6; carrying it out is. Confirm your exact position with AUSTRAC.

I only do tax returns, BAS and bookkeeping. Do I need to enrol?

On the current designated-service list, no. That work is not a designated service, so a practice doing only tax compliance and bookkeeping is not an AUSTRAC reporting entity. Note that a separate obligation, the Privacy (Tax File Number) Rule 2015, still binds you for the individual TFNs you handle, regardless of AML. Read: the TFN Rule 2015, what accountants must do.

Keep reading

General information and compliance tools, not legal advice. Privaproof is not a law practice and does not provide legal advice. This page does not assess your obligations under the AML/CTF Act itself, which are administered by AUSTRAC, and does not tell you whether a specific engagement is a designated service. The AML/CTF Act and the Privacy Act 1988 (Cth) change over time, so check you are working from a current version and confirm your firm's position with AUSTRAC.