Under the safe harbour provisions, taxpayers using a registered tax or BAS agent may not be liable to some administrative penalties imposed by the Australian Taxation Office (ATO) in certain circumstances. For example, where an agent is responsible for:
- failing to lodge a document (such as an income tax return) on time
- making a false or misleading statement resulting in a shortfall of tax.
The ATO administers the safe harbour provisions.
Safe harbour and the Code of Professional Conduct
Where safe harbour is granted to a taxpayer, that decision may involve a finding that an agent has failed to take reasonable care.
If such a finding is made against an agent, we may consider whether the agent has breached the Code of Professional Conduct (Code) – in particular, Code Items 9 and 10. (See Appendix 1 of our TPB (EP) 01/2010 Code of Professional Conduct)
- Code Item 9 requires a registered agent to take reasonable care in ascertaining a client’s state of affairs, to the extent that ascertaining the state of those affairs is relevant to a statement the agent is making or a thing the agent is doing on behalf of a client.
- Code Item 10 requires a registered agent to take reasonable care to ensure that taxation laws are applied correctly to the circumstances in relation to which the agent is providing advice to a client.
Before we can determine if an agent has breached the Code, we must conduct an investigation. We will decide whether an investigation is required having regard to all the circumstances and will not necessarily conduct an investigation in every case.
Last modified: 4 September 2019