Tax Agent Services Legislation

The tax agent services legislative package consists of the:

• Tax Agent Services Act 2009 (TASA 2009). The TASA 2009 is the main Act. It establishes the Tax Practitioners Board (TPB) and provides for the registration of tax agents and BAS agents.
• Tax Agent Services Regulations 2009 (TAS Regulations 2009). The Regulations contain, among other things, the qualifications and relevant experience requirements for registration. 
• Tax Agent Services (Transitional Provisions and Consequential Amendments) Act 2009 (Transitional Act). This Act deals with the consequential and transitional matters arising from the enactment of the TASA 2009. This includes generous transitional arrangements, including a six month period where BAS service providers can notify the TPB to transition to registration.

The Tax Agent Services Bill 2008 was introduced into Parliament on 13 November 2008 and Royal Assent was given to the TASA 2009 on 26 March 2009.

The provisions that enable the new Tax Practitioners Board to be established commenced on 26 March 2009, when Royal Assent was given to the TASA 2009. The early commencement of these provisions is to enable the chair and members of the Board to prepare for the commencement of the new regulatory regime.

The remaining provisions of the new legislation that constitute the new regulatory regime for the registration of tax agents and BAS agents will commence on 1 March 2010.

Key elements of the legislative regime

The key elements of the new legislative regime are set out under the following subheadings.

1. The establishment of a national Tax Practitioners Board

The Tax Practitioners Board (Board) has responsibility for registering tax agents and BAS agents, ensuring that agents maintain appropriate skills and knowledge, investigating complaints against agents and ensuring that unregistered entities do not hold themselves out to be agents.

2. A wider scope of application

Under the new arrangements, BAS agents will be governed in the same way as tax agents, but will only be able to provide a limited range of services relating to the taxation laws relevant to a BAS provision in the law.

3. Registration requirements

Meeting the fit and proper person test, as well as minimum educational qualifications and relevant experience requirements, will be required in order to obtain registration to provide tax agent services for a fee or other reward. The minimum educational qualifications and relevant experience requirements are set at a less demanding level for registration as a BAS agent than for registration as a tax agent, in recognition of the narrower scope of services provided by BAS agents.

The Board may impose conditions on registration limiting the scope of the services that an agent may provide to one or more areas of the taxation laws or one or more type of tax agent service. These limitations correspond to the prescribed qualifications and relevant experience of an individual agent or, in the case of an agent that is a partnership or company, to correspond to the prescribed qualifications and relevant experience of the individuals who work for the agent.

While registration is restricted to individuals, partnerships and companies, there is flexibility for a registered entity to conduct its business through a trust structure. The registered entity needs to be a trustee of the trust. The TASA 2009 will apply to the registered entity in its role as trustee in the same way it would apply to that entity if it was not a trustee.

4. The introduction of a Code of Professional Conduct

A Code of Professional Conduct (Code) governs the ethical and professional standards of tax agents and BAS agents. The Code is set out as a statement of principles and the Board may issue binding written guidelines for the interpretation and application of the Code.
A formal legislated code has been a key aspect of the new legislative regime since it was first recommended in 1994 by the Report of the National Review of Standards for the Tax Profession, Tax Services for the Public. This report recommended that any such code should be made binding through legislation to enable the Board to impose sanctions for breaches and thereby to enforce compliance with the code.

5. A range of sanctions for breaches of the Code of Professional Conduct

Under the new arrangements, if a tax agent or BAS agent has breached the Code, the Board has a range of options. The Board may caution the agent, require the agent to complete a course of training, subject the agent to practising restrictions, require the agent to practise under supervision, or suspend or terminate the agent’s registration. (Currently, the state Boards are only able to suspend or terminate registration.)

The Board may also apply to the Federal Court of Australia (Federal Court) for an order to pay a pecuniary penalty for certain serious misconduct, or seek an injunction to prevent an entity from engaging in, or compel an entity to undertake, certain conduct.
Such a wide range of sanctions allows the Board to tailor its response according to the severity of the misconduct.

6. Safe harbour from penalties

A taxpayer who uses a tax agent or BAS agent will benefit from a safe harbour from certain administrative penalties in certain circumstances. Penalties will no longer apply:

• where a false or misleading statement is made carelessly, provided the taxpayer has taken reasonable care to comply with their tax obligations by giving their tax agent or BAS agent the information necessary to make the statement; and
• where a document (such as a return, notice or statement) is not lodged on time in the approved form due to the tax agent’s or BAS agent’s carelessness, provided the taxpayer gave the agent the necessary information, in sufficient time, to lodge the document on time and in the approved form.