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Safe harbour

Safe harbour

The Australian Taxation Office (ATO) administers ‘safe harbour’ provisions set out in the Taxation Administration Act 1953 (TAA). Refer to ATO's website at www.ato.gov.au for details about the administration of safe harbour provisions.

Under the safe harbour provisions, taxpayers using a registered tax or BAS agent may not be liable to some administrative penalties imposed by the 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.

How we administer the Code of Professional Conduct (Code) in relation to tax and BAS agents where a safe harbour from penalties is found to apply to a taxpayer

Where the ATO, or a court or tribunal, makes a decision about the application of the safe harbour provisions to the circumstances of a taxpayer, that decision may involve a finding that an agent, in making a statement or failing to lodge a return on behalf of the taxpayer, has failed to take reasonable care.

Such a finding in relation to an agent’s conduct, may be considered in assessing whether an agent has breached the Code, and 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: 15 May 2014