Webinar

Issued: 13 February 2024

Last modified: 26 March 2024

In this webinar, learn more about recent changes to the Tax Agent Services Act 2009. This includes the move to annual registration and new Code items relating to the engagement of disqualified entities. 

Resources

Webinar recording

New legislation an annual registration webinar recording

New legislation and annual registration - Questions & answers

Annual registration

The annual registration requirement applies to new registrations and renewal applications submitted from 1 July 2024.

In practice, this means there will be a staggered implementation. Your current registration will continue for the full 3 years, but once you renew your registration after that period (from 1 July 2024), the annual registration framework will apply.

 

No, if your current registration is due for renewal after 1 July 2024, you do not need to renew it again on 1 July 2024. The annual registration requirement applies to renewal applications submitted on or after 1 July 2024.

 

The annual registration fee structure is currently subject to government review. We will keep you up to date as more information is available.

 

Yes, we will continue to issue email and SMS reminders when registration renewal is due. This is why it is important to ensure your details are up to date. If you need to update your details, you can do this via your My Profile account.

 

Unfortunately, we cannot change your registration renewal date.

 

There will be no changes to the continuing professional education (CPE) requirements at this stage. The CPE period will continue to align with your registration date and the minimum yearly requirement for hours completed will stay the same. You will also still be able to align your CPE period to your recognised professional association.

 

To find your registration renewal date, you can check the TPB Register.

 

You must apply to renew your registration at least 30 days, but not more than 90 days, before it expires. Remember you must apply to renew your registration at least 30 days before it expires.

 

This was a decision by Government and there are a number of reasons, including to align with the registration periods of other professions across Government and other regulatory requirements for tax practitioners, including those relating to professional indemnity insurance.

Annual registration will also help to ensure we have greater ongoing visibility of tax practitioner registrations, which will increase consumer confidence that you continue to meet their ongoing registration requirements and only those that should be registered are.

 

You will continue to receive reminders from us when your renewal is due. We would also encourage you to keep track of your renewal date so that you can be prepared when it comes time to renew.

 

The annual declaration process has been retired and will no longer be a requirement for tax practitioners. 

 

Your renewal will only be available in My Profile 90 days before it expires.

Disqualified Entities

The meaning of the term ‘disqualified entity’ is set out in the Tax Agent Services Act 2009 (TASA). A disqualified entity covers any ‘entity’ that is not a registered tax practitioner or qualified tax relevant provider that has had one or more specified events (disqualifying events) occur within the last 5 years. The disqualifying events and what they mean, are covered by our guidance

 

The disqualified entity requirements apply from 1 January 2024, with transitional arrangements in place until 31 December 2024, to allow tax practitioners a reasonable time to comply with the requirements.

If you engage a disqualified entity prior to 1 January 2024, you will have 12 months (until 31 December 2024 (inclusive)) to either cease employing the disqualified entity to provide tax agent services, or obtain our approval to continue.

However, if the employment contract is extended or renewed during the transitional period, these requirements will apply from the date of extension or renewal. 

Refer to our guidance for further information.

 

The term 'entity' is very broadly defined and can include an individual, a body corporate (company), a body politic, a partnership, any other unincorporated association or body of persons, a trust, a superannuation fund, and an approved deposit fund. It could include employees, associates, contractors or individuals who share in the revenue and income received from the tax agent services provided under a registered tax practitioner.

A disqualified entity could include a franchisee, and the disqualified entity requirements may apply to arrangements with these entities. However, it will ultimately depend on whether Code items 15 and 16 apply in the circumstances, for example, if a tax practitioner is 'using' the franchisee to provide tax agent services on their behalf, then Code item 15 could apply.

 

We consider that registered tax practitioners must take certain steps, and make certain enquiries, at a minimum, to check whether an entity they are employing, using, or have an arrangement with, is a disqualified entity. For details on these steps, refer to our guidance under 'How to determine if an entity is a disqualified entity'.

 

We undertook public consultation on 2 Information sheets providing guidance on the disqualified entity requirements in Code items 15 and 16 of the Code of Professional Conduct (Code). This consultation period closed on 16 February 2024. As part of the consultation, the professional bodies were given the opportunity to provide feedback on our guidance and made submissions for our consideration. We are currently considering all submissions made during the consultation process, before we settle our position and finalise the Information sheets. Please refer to the draft Information sheets for more information.

 

The laws preventing you from employing or using a disqualified entity (without our approval) apply to those entities who are providing a ‘tax agent service’ (which includes a BAS service) on your behalf.

The term ‘tax agent service’, as defined in the TASA, covers a broad range of services and is not limited to the completion and lodgement of income tax returns or business activity statements (BAS).

To determine whether the work being undertaken by an employee is a ‘tax agent service’, please refer to our Information sheet on 'What is a tax agent service?'.

 

If an entity has had an application for registration or renewal as a tax practitioner rejected for eligibility reasons, other than for failing to meet education or experience requirements, this is a ‘disqualifying event’ for the purposes of the disqualified entity provisions. You would need to seek TPB approval to employ or use that entity to provide tax agent services on your behalf.

 

The disqualified entity requirements in the TASA, including Code item 15 of the Code, apply equally to offshoring arrangements

This means Code item 15 applies in relation to any entity you employ or use to provide tax agent services (such as preparing tax returns) on your behalf, including overseas contractors. 

If you wish to use an overseas contractor to prepare tax returns on your behalf, you will need to seek our approval first if they are a disqualified entity, subject to the transitional arrangements.

 

The disqualified entity requirements in Code item 15 of the Code apply in relation to any individual (or other entity) that a registered tax practitioner employs (or uses) to provide tax agent services on their behalf, including a bookkeeper. 

For example, you must ensure you comply with Code item 15 when employing (or using) a bookkeeper to help prepare and lodge BAS for your clients, as the preparation and lodgement of BAS are tax agent services and the bookkeeper is being employed (or used) to provide those services on your behalf.

 

If an individual has become an undischarged bankrupt in the last 5 years (even if the individual is no longer an undischarged bankrupt), this is a ‘disqualifying event’ for the purposes of determining whether an individual is a disqualified entity.

Provided the individual is not a registered tax practitioner (or qualified tax relevant provider), they will be a ‘disqualified entity’ and the tax practitioner needs to seek our approval to employ or use the entity to provide tax agent services on their behalf, subject to the operation of the transitional rules.

 

If an entity has had any sanctions, including a written caution, imposed by us for failing to comply with the Code within the last 5 years, this is a ‘disqualifying event’ for the purposes of determining whether they are a disqualified entity.

However, an entity cannot be a ‘disqualified entity’, and the disqualified entity provisions do not apply, while they are a current registered tax practitioner (or qualified tax relevant provider).

 

If you are a registered tax practitioner and you do not comply with the disqualified entity requirements in Code items 15 and/or 16 of the Code, you will breach these Code items. 

We may impose one or more sanctions for the breach, which may include termination of your employment. 

A breach of Code items 15 or 16 can also affect whether you:

  • meet the fit and proper person requirement (necessary to maintain your registration); and
  • comply with other Code items, such as Code item 1 (relating to honesty and integrity), and Code item 7 (relating to ensuring tax agent services are provided competently).

 

Transitional arrangements apply from 1 January 2024 to 31 December 2024 to allow tax practitioners a reasonable time to comply with the disqualified entity requirements.

The transitional arrangements, including examples of how they apply in practice, are explained in our guidance.

 

To comply with the disqualified entity requirements there are certain steps you must take. One of these steps is to ensure the tax practitioner has a written contract or arrangement in place with the entity they employ, use or have an arrangement with, that:

  • requires the entity to notify you as soon as practicable if a disqualifying event occurs; and
  • enables you to immediately cease the following if the entity is, or becomes, a disqualified entity:
    -    employing or using the entity to provide tax agent services on their behalf
    -    providing tax agent services in connection with an arrangement with the entity.

We will not be providing the wording for this employment agreement. We recommend seeking independent legal advice on the application of relevant contract and employment law, and your obligations under that law.

 

Code item 15 prohibits registered tax practitioners from employing or using the services of a disqualified entity to provide tax agent services on their behalf, without our approval.

Code item 16 prohibits registered tax practitioners from providing tax agent services in connection with an arrangement with a disqualified entity. Unlike Code item 15, these arrangements are prohibited and can’t be approved by us.

Code item 16 is intended to prevent arrangements where the disqualified entity is operating ‘through’ the registered tax practitioner. This may occur where the disqualified entity is acting as the ‘controlling mind’ of the registered tax practitioner and provides tax agent services (while unregistered) using the registered tax practitioner’s credentials. In effect, the disqualified entity is providing the tax agent service themselves and are not, as contemplated by Code item 15, providing the tax agent services on behalf of the registered tax practitioner.

Breach reporting

From 1 July 2024, registered tax practitioners must comply with additional breach reporting obligations under the TASA. These obligations require tax practitioners to report ‘significant breaches’ of the Code in the TASA: 

  • relating to their own conduct to the TPB; and
  • by other registered tax practitioners to the TPB and recognised professional association(s) of that tax practitioner.

In the coming weeks we will be releasing draft guidance on the additional breach reporting obligations for public consultation. This guidance has been prepared to assist tax practitioners to understand and comply with the obligations.

We will notify registered tax practitioners when it is released.

We encourage feedback on the draft guidance once it is released, which we will take into account when settling our position and finalising the content.