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Civil penalty provisions for tax (financial) advisers

Civil penalty provisions for tax (financial) advisers

There are several civil penalty provisions in the Tax Agent Services Act 2009 (TASA) for tax (financial) advisers. These civil penalty provisions can be grouped into two categories, those relating to:

  • conduct that is prohibited without registration
  • conduct of registered tax (financial) advisers.

A civil penalty is a pecuniary (or monetary) penalty imposed by courts exercising a civil rather than criminal jurisdiction. State and Commonwealth government bodies can apply to the courts to have a pecuniary penalty imposed against an individual for breaching a civil penalty provision in some circumstances. Civil penalties do not include criminal convictions or imprisonment.


Penalty amounts

Conduct prohibited without registration

Conduct of registered tax (financial) advisers

Consequences of breaching a civil penalty provision

Partners in a partnership


Penalty amounts

    Penalties for breaching the civil penalty provisions are imposed in the form of penalty units. The current value of one penalty unit is $222.

    The penalty amounts listed below reflect the current penalty unit value. For example, one penalty unit = $222, so 250 penalty units = $55,500.

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    Conduct prohibited without registration

    You will breach a civil penalty provision if you are unregistered and:

      Conduct Maximum penalty
    1 you charge or receive a fee or other reward for providing a tax (financial) advice service
    • $55,500 (250 penalty units) for an individual
    • $277,500 (1,250 penalty units) for a body corporate.
    2 you advertise that you will provide a tax (financial) advice service
    • $11,100 (50 penalty units) for an individual
    • $55,500 (250 penalty units) for a body corporate.
    3 you represent that you are a registered tax (financial) adviser

    Exemptions

    The civil penalty provisions listed in the table above do not apply if you are:

    • an employee who is providing a tax (financial) advice service to your employer for a salary, wage or other benefit
    • a registered tax agent (with no conditions imposed on your registration, or with a condition permitting financial planning)
    • a legal practitioner providing tax (financial) advice services as a legal service under a State or Territory law regulating legal practice and the provision of legal services.

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    Conduct of registered tax (financia) advisers

    Employing or using the services of deregistered entities

    You will breach a civil penalty provision if you employ or use the services of a deregistered entity to provide tax (financial) advice services on your behalf when you know or should reasonably know:

    • that the entity is not currently registered but was previously registered, and
    • you first employed, or first used the services of, the entity within one year of its deregistration.

    However, you will not breach a civil penalty provision if the entity’s registration was terminated because it surrendered its registration, became an undischarged bankrupt or went into external administration.

    PENALTY: $55,500 (250 penalty units) for an individual and $277,500 (1,250 penalty units) for a body corporate.

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    Consequences of contravening a civil penalty provision

    If you breach a civil penalty provision under the TASA, we may, within four years, apply to the Federal Court of Australia for an order that you pay a pecuniary (monetary) penalty. If the Federal Court is satisfied that a civil penalty provision has been breached,it determines an appropriate penalty, being no more than the penalty stated in the relevant civil penalty provision.

    Once the Federal Court orders that a pecuniary penalty be paid, the penalty is payable to the Commissioner. The Commissioner can also enforce the order as if it were a judgment of the Federal Court.

    If more than one civil penalty provision is breached, we may begin proceedings for breaches of any or all of the relevant civil penalty provisions, however only one pecuniary penalty will be imposed in respect of the same conduct.


    Partners in a partnership

    If a partnership contravenes a civil penalty provision, each partner of the partnership at the time of the breach, is taken to have breached the civil penalty provision. This is unless the partner proves that they:

    • did not engage in the conduct
    • did not aid, abet, counsel or procure the conduct
    • were not in any way knowingly concerned in or a party to the conduct.

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    Last modified: 1 July 2020