Events that may affect your continued registration
The following is intended as information only and is not a formal Board guideline. While it seeks to provide practical assistance and explanation, it does not exhaust, prescribe or limit the scope of the Board’s powers provided in the Tax Agent Services Act 2009. This information does not constitute legal advice and may be changed from time to time.
Overview
The Tax Agent Services Act 2009 (TASA) provides that certain events may affect your continued registration. These events are specifically provided for in section 20-45 of the TASA. The events apply equally to registered tax agents and BAS agents.
Section 20-15 of the TASA provides that in determining whether an individual is a fit and proper person, the Board must have regard to, among other things, whether an event affecting the individual’s continued registration has occurred during the previous five years.
Events that may affect your continued registration
The following events may affect your continued registration as a registered tax agent or BAS agent:
- you are convicted of a serious taxation offence
- you are convicted of an offence involving fraud or dishonesty
- you are penalised for being a promoter of a tax exploitation scheme
- you are penalised for implementing a scheme that has been promoted on the basis of conformity with a product ruling in a way that is materially different from that described in the product ruling
- you become an undischarged bankrupt or go into external administration
- you are sentenced to a term of imprisonment.
Note: For a partnership that is a registered tax agent or BAS agent, ‘you’ means a partner in the partnership, and/or a director of a company that is a partner in the partnership.
For a company that is a registered tax agent or BAS agent, ‘you’ means a director of the company.
(a) Serious taxation offence
‘Serious taxation offence’ means:
being an offence that relates to an offence against a taxation law.
(b) An offence involving fraud or dishonesty
‘Fraud’ and ‘dishonesty’ take their ordinary meaning, and are determined by reference to community standards.
The Criminal Code defines ‘dishonest’ as dishonest according to the standards of ordinary people in circumstances where the defendant is aware of these standards.
Example
Patricia was convicted of theft and was fined $1,500. To convict an individual for theft, a court must find that the individual has dishonestly appropriated property belonging to another with the intention of permanently depriving the other person of the property. Consequently, theft is an offence of dishonesty and the Board must consider this in determining whether Patricia satisfies the fit and proper person test for registration.
(c) Penalised for being a promoter of a tax exploitation scheme
You are considered to have been penalised for being a promoter of a tax exploitation scheme if you have been ordered to pay a civil penalty for engaging in conduct that results in you, or another entity, being a promoter of a tax exploitation scheme, within the meaning of Division 290 of Schedule 1 to the Taxation Administration Act 1953.
(d) Penalised for implementing a scheme that has been promoted on the basis of conformity with a product ruling in a way that is materially different from that described in the product ruling
You are considered to have been penalised for implementing a scheme that has been promoted on the basis of conformity with a product ruling in a way that is materially different from that described in the product ruling if you have been ordered to pay a civil penalty for engaging in such conduct as defined within Division 290 of Schedule 1 to the Taxation Administration Act 1953.
(e) Undischarged bankrupt and external administration
Undischarged bankrupt – You are an undischarged bankrupt if you have been declared bankrupt under the Bankruptcy Act 1966 and have not been discharged from the bankruptcy.
Example
Seven years ago, William became bankrupt and was not discharged until three years ago. Although William became bankrupt more than five years ago, having the status of an undischarged bankrupt at any time during the past five years is a factor the Board must consider in deciding whether William is a ‘fit and proper person’ for registration purposes.
External administration – Generally, a company will go into external administration when its directors are required to relinquish direction of its affairs to a receiver, administrator, provisional liquidator or liquidator.
A company will go into external administration for the purposes of the TASA if it goes into external administration as defined in the Corporations Act 2001.
(f) Sentenced to a term of imprisonment
You are considered to have been ‘sentenced to a term of imprisonment’ if a sentence is imposed on you in relation to an offence and that sentence includes a term of imprisonment. This does not require you to have actually served all or part of that term of imprisonment, only that you were sentenced to a term of imprisonment.
Example
Three years ago, Melissa was convicted of dangerous driving causing serious injury under section 319 of the Crimes Act 1958 (Vic) and received a two-year suspended prison sentence. Being sentenced to a term of imprisonment in the previous five years is an event the Board must consider in deciding whether Melissa is a fit and proper person for registration purposes.
Requirement to notify the Board if an event affecting your continued registration occurs
Individuals
You must notify the Board in writing whenever an event affecting your continued registration occurs.
Note: You must also notify the Board in writing if you cease to meet one of the tax practitioner registration requirements.
Partnerships
You must notify the Board in writing whenever an event affecting your continued registration occurs in respect of:
- a partner in your partnership, or
- a director of a company that is a partner in your partnership.
Note: You must also notify the Board in writing if you cease to meet one of the tax practitioner registration requirements, or if the composition of your partnership changes.
Companies
You must notify the Board in writing whenever an event affecting your continued registration occurs in respect of a director of your company.
Note: You must also notify the Board in writing if you cease to meet one of the tax practitioner registration requirements, or if an individual becomes, or ceases to be, a director of your company.
30 day notification period
You must notify the Board within 30 days of the day on which you become, or ought to have become, aware that an event affecting your continued registration has occurred.
Failure to comply with this requirement is a breach of section 8C of the Taxation Administration Act 1953 and the Code.
Consequences of an event affecting your continued registration
Individuals
If an event affecting your continued registration occurs, the Board may terminate your registration.
Partnerships
If an event affecting your continued registration occurs in respect of a partner in your partnership, then the Board may require you to remove the partner from your partnership within a specified period.
If an event affecting your continued registration occurs in respect of a director of a company that is a partner in your partnership, then the Board may require the removal of:
- the partner, or
- the director of the company.
Note: Failure to comply with a notice requiring you to remove a partner in your partnership, or a director of a company that is a partner in your partnership, is a breach of the Code. The Board may also terminate your registration:
- for a breach of the Code, or
- if you cease to meet one of the tax practitioner registration requirements.
Companies
If an event affecting your continued registration occurs, the Board may terminate your registration.
If an event affecting your continued registration occurs in respect of a director of your company, then the Board may require you to remove the director from the board of directors within a specified period.
Note: Failure to comply with a notice requiring you to remove a director in your company is a breach of the Code. The Board may also terminate your registration for a breach of the Code.