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Required knowledge of the Tax Agent Services Act 2009 exposure draft TPB(I) D10/2011

Exposure draft TPB Information sheet TPB(I) D10/2011

Required knowledge of the Tax Agent Services Act 2009 including the Code of Professional Conduct

This draft information sheet is also available as a PDF, download link is provided at end of this page..

The Tax Practitioners Board (Board) has released this draft information sheet as an exposure draft and invites comments and submissions in relation to the information contained in it within 45 days. The closing date for submissions is 24 October 2011 after which time the Board will consider any submissions made before settling its position, undertaking any further consultation required and finalising the information sheet.

Any written submissions in relation to this exposure draft should be made by the closing date to the Secretary of the Board via email at tpbsubmissions [at] tpb.gov.au or by mail to:

Tax Practitioners Board
PO Box 9825
PENRITH  NSW  2740

Disclaimer

This document is in draft form, and when finalised, will be intended as information only. While it seeks to provide practical assistance and explanation, it does not exhaust, prescribe or limit the scope of the Board’s powers in the Tax Agent Services Act 2009 (TASA). In addition, please note that the principles and examples in this paper do not constitute legal advice. They are also at a preliminary stage only. The Board’s conclusions and views may change as a result of the comments the Board receives or as other circumstances change.

Document history

This draft information sheet was issued on 9 September 2011 and is based on the TASA, the Tax Agent Services (Transitional Provisions and Consequential Amendments) Act 2009 and the Tax Agent Services Regulations 2009 as at 29 October 2010.

Issue date: 9 September 2011

Introduction

  1. This Tax Practitioners Board Information Sheet (TPB(I)) sets out the preliminary views of the Tax Practitioners Board (Board) in relation to the circumstances in which an individual will be required to demonstrate knowledge of the Tax Agent Services Act 2009 (TASA), including the Code of Professional Conduct (Code), for the purposes of registration as a tax agent or BAS agent.
  2. Further, this TPB(I) sets out the proposed content requirements of the Board in relation to being able to demonstrate such knowledge.
  3. The information contained in this TPB(I) is intended to assist individuals in understanding the Board’s requirements in relation to required knowledge of the TASA, including the Code, and also to assist approved course providers in developing courses that meet the Board’s requirements.

Background and scope

  1. The new legislative regime governing the provision of tax agent services (which includes BAS services) is contained in the TASA which commenced to apply in full from 1 March 2010.
  2. The object of the TASA is to ensure that tax agent services are provided to the public in accordance with appropriate standards of professional and ethical conduct. This is to be achieved by, among other things:
    1. establishing a national Tax Practitioners Board to register tax agents and BAS agents
    2. introducing a legislated Code of Professional Conduct for registered tax agents and BAS agents, and
    3. providing the Board with access to a graduated range of administrative sanctions for breaches of the Code.
  1. From 1 March 2010, entities providing a tax agent service for a fee or other reward are required to be registered under the TASA.
  2. To be eligible for registration, an entity must satisfy the Board that it has met the registration requirements, which broadly consist of the following two elements:
    1. a fit and proper person requirement, and
    2. prescribed qualifications and experience requirements (for individuals), or the requirement to have a sufficient number of individuals who are registered (for companies and partnerships).
  1. Against this background, the Board considers that an essential part of the qualifications requirement for registration as either a tax agent or BAS agent is that individuals will need to be able to demonstrate their knowledge of the TASA, including the Code.  Moreover, the Board considers that knowledge of the TASA, including the Code, is an essential requirement for registered tax agents and BAS agents to be able to meet their statutory obligations in relation to the provision of tax agent services.

Who is required to demonstrate knowledge of the TASA including the Code?

  1. The Board is of the preliminary view that all existing tax agents and BAS agents are expected to comply with the TASA, including the Code, and therefore should have knowledge of the TASA, including the Code, as part of their general competency requirement.
  2. The Board expects that this knowledge will be able to be enhanced through continuing professional education (CPE) in due course.
  3. The Board notes that the TASA, including the Code, is one of the topic requirements comprising Board approved courses in Australian taxation law and basic GST/BAS taxation principles.
  1. As such, the Board is of the preliminary view that, from 1 July 2013, all new tax agents and BAS agents who are required to have completed a course in Australian taxation law that is approved by the Board, or a course in basic GST/BAS taxation principles that is approved by the Board, must have completed a course which includes a component in the TASA, including the Code. Where the course does not include a component in the TASA, including the Code, the agent will be required to have completed a separate unit which contains this component.  The Board’s proposed approach is summarised in the following diagram.

Flowchart - Required knowledge of the TASA and the Code of Professional Conduct 

  1. Paragraphs 15 to 31 of this TPB(I) set out the Board’s preliminary views in relation to the requirements of a separate unit in the TASA, including the Code.
  2. The Board notes that its policy as contained in this TPB(I) does not prejudice the Board’s powers generally, including, but not limited to, the power under section 30-20 of the TASA to make an order requiring an agent to complete a course of education or training specified in the order.

Unit requirements

Approved course providers

  1. The approach of the Board is to rely on the existing regulatory and quality assurance frameworks applicable to universities, registered training organisations, other registered higher education institutions and other course providers approved by the Board in determining approved course providers for the purpose of providing Board approved courses.  Consistent with this approach, the Board will rely on approved course providers to develop units that comply with the requirements of a unit in the TASA including the Code as set out in this TPB(I).

Topics

  1. The Board is of the preliminary view that a unit in the TASA, including the Code, should include the following topics:
    1. The objects of the TASA
    2. Registration process and eligibility requirements under the TASA, including knowledge of:
      1. the fit and proper person requirement
      2. prescribed qualifications and experience requirements (for individuals), or the requirement to have a sufficient number of individuals who are registered to provide tax agent services to a competent standard and to carry out supervisory arrangements (for companies and partnerships), and
      3. relevant transitional provisions
    3. The Code of Professional Conduct  including the underlying content of the professional and ethical standards required of registered tax agents and BAS agents that are contained in the Code in section 30-10 of the TASA
    4. Administrative sanctions that may be imposed for a breach of the Code, including:
      1. written cautions from the Board
      2. orders from the Board requiring specified action to be taken (including requiring an agent to complete a course of training or requiring an agent to practise under supervision)
      3. suspension of registration, and
      4. termination of registration
    5. Civil penalty provisions, including:
      1. contraventions that apply to the conduct of entities that are not registered as agents:
        1. providing tax agent services without being registered
        2. advertising tax agent services without being registered, and
        3. representing that you are a registered agent without being registered
      2. contraventions applicable to the conduct of registered agents:
        1. making false or misleading statements
        2. using deregistered entities, and
        3. improperly signing a declaration or other statement
    6. Board’s power to apply to the Federal Court for an injunction, and
    7. Obligations to notify the Board of a change of circumstances.
  1. Approved course providers must ensure that units in the TASA, including the Code, are regularly updated to take into account changes over time.

Unit level and learning outcomes

  1. The Board’s preliminary view is that an individual should have an appropriate level of knowledge of the topics listed at paragraph 16.
  2. It is the Board’s preliminary view that the appropriate level of knowledge for a registered BAS agent should be at a Certificate IV level which is equivalent to a Level 4 as specified in the Australian Qualifications Framework (AQF).  This means that individuals will have theoretical and practical knowledge and skills for specialised and/or skilled work and/or further learning.
  3. For a registered tax agent, it is the Board’s preliminary view that the appropriate level of knowledge should be at a Diploma level which is equivalent to a Level 5 as specified in the AQF. This means that individuals will have specialised knowledge and skills for skilled/paraprofessional work and/or further learning.
  4. Within this framework, the Board considers that the criteria specified by the AQF in relation to the knowledge, skills and application of that knowledge and skills in relation to Level 4 (for BAS agents) and Level 5 (for tax agents) represents appropriate learning outcomes for the topics listed at paragraph 16.

Structure of unit, mode of delivery and relationship to CPE

  1. In the preliminary view of the Board, the topics as specified in paragraph 16 should either form the basis of a standalone unit in the TASA, including the Code, or could be embedded in another course – for example, as part of a course in Australian taxation law that is approved by the Board or as part of a course in basic GST/BAS taxation principles that is approved by the Board.
  2. The Board is of the preliminary view that a hard-and-fast rule on the manner of delivery of a unit is not necessary. Provided that whatever manner is adopted in the unit involves an expectation that students will develop knowledge of the topics listed at paragraph 16 at the requisite level (see paragraphs 18 to 21), it is immaterial whether they are undertaking the unit in a face-to-face setting or via an online computer-based learning module or webinar, with an assessment at the end. The outcomes of the unit should be discernible by reference to how the unit is assessed.
  3. Registered tax agents and BAS agents should ensure their knowledge of the TASA, including the Code, remains current. It is the preliminary view of the Board that a registered tax agent or BAS agent should maintain the currency of their knowledge of the TASA, including the Code, by undertaking relevant CPE.

Duration

  1. It is the preliminary view of the Board that a standalone unit in the TASA, including the Code, which covers the topics listed at paragraph 16 at the requisite depth and with an appropriate assessment, should be three hours, or half a day, in duration.
  2. It is the preliminary view of the Board that similar requirements as to duration would apply to a unit in the TASA, including the Code, which is embedded in another course (for example, a course in Australian taxation law or a course in basic GST/BAS taxation principles that is approved by the Board).

Assessment

  1. The Board expects that knowledge of the unit requirements of the TASA, including the Code, is evidenced by appropriate assessment.
  2. An appropriate assessment for a BAS agent should be at the Certificate IV level which is equivalent to a Level 4 as specified in the AQF.
  3. An appropriate assessment for a tax agent should be at the Diploma level which is equivalent to a Level 5 as specified in the AQF.
  4. The Board accepts that certification style exams are generally on a pass/fail basis and the Board’s preliminary view is that such an assessment framework may be appropriate for this unit.  At the same time the Board accepts that graduated results (pass, credit, distinction) may also be appropriate.
  5. Assessments may occur by a variety of modes including being conducted online provided that suitable quality assurance mechanisms are in place to ensure the integrity of the examination process.  For example, it is expected that a unit could be run as an online, computer-based module or webinar that applicants could undertake and then complete a form of assessment at the end of the module or webinar.

More information

  1. For more information on the requirements for registration as a tax agent or BAS agent, please visit the Board’s website at www.tpb.gov.au