Issued: 25 October 2023
Last modified: 27 November 2023
Learn more about what it means to comply with your personal tax affairs. We’ll walk you through your obligations and explain how personal tax obligations can impact your fit and proper person status.
Questions and answers
We have compiled some of the questions we received during our webinar.
Personal tax obligations
Can tax agents enter into a payment plan with the ATO to pay their income tax or activity statement liability?
You can contact the Australian Taxation Office (ATO) to set up a payment plan. When you have a payment arrangement in place, you need to disclose this to us in your registration renewal form. This is to provide assurance to us that you are complying with your personal tax obligations. See the ATO’s website for more information on payment plans.
Do I need to disclose unpaid employee superannuation to the TPB?
Yes, to comply with Code item 2, a registered tax practitioner must comply with the taxation obligations of their practice, including meeting their employer obligations, such as payment of superannuation guarantee contributions. You should also provide a full and complete disclosure of any outstanding personal tax obligations, to the TPB (including in any application for registration or renewal) in order to comply with Code item 2.
If the ATO grants an extension to lodge your personal income tax return, are you still compliant with the TPB?
As long as you are complying with the lodgement due date required by the ATO, you will be meeting your TPB obligations in relation to Code item 2.
If a tax practitioner enters into a payment arrangement with the ATO, and pays their debt over 6-months, will you consider this an outstanding tax obligation?
A registered tax practitioner will have complied with the taxation laws in the conduct of their personal affairs (Code item 2) if they have paid their tax debts by the due date or have entered into, and are complying with a formal payment arrangement with the ATO to pay their tax debt by instalments. You also need to declare this arrangement with us when you renew your registration.
Fitness and propriety
How would I know if a fellow director or partner, not a tax practitioner, is compliant with their personal tax affairs?
We consider the fitness of propriety of conduct on a case-by-case basis. Generally, an individual director or partner is not liable for the specific conduct of an offending director or partner. However, if that person knows of the misconduct or improper or unprofessional conduct of the director or partner and fails to take any steps to address the issues caused by them, this failure may be considered to reflect adversely on their own fitness and propriety.
If a tax practitioner has a related entity that goes into administration because of unpaid tax debts, will the tax practitioner be considered not to be fit and proper and possibly have their registration terminated?
You must ensure that you comply with your personal tax obligations, including those of your associated entities. Code item 2 requires a registered tax practitioner to comply with the taxation laws in the conduct of their personal affairs. This includes the affairs of all associated entities of a registered tax practitioner and any entity that the registered tax practitioner has direct or indirect control over, particularly in circumstances where the tax practitioner is responsible for and/or actively involved in the tax affairs of the entity. A failure to comply with Code item 2 may also have implications for the tax practitioner regarding their overall fitness and propriety to be a registered tax practitioner. This is considered on a case-by-case basis and depends on the facts and circumstances of a case.
Are there any extenuating circumstances that are considered in relation to fitness and propriety?
While there isn’t a specific requirement that the special circumstances of an individual be considered, we may treat the particular circumstances of an individual as relevant in determining fitness and propriety.
The particular circumstances of a tax practitioner may be relevant to a determination of fitness and propriety, however, we must also weigh the public interest in the tax practitioner continuing in practice against the public interest in protecting clients from a recurrence of the relevant misconduct.
Considerations of the personal circumstances of an individual cannot override this primary consideration which must not be considered in isolation from the public interest in ensuring proper and competent provision of tax agent and BAS services.