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Supervision and control tax agents

Supervision and control - tax agents

Under the Code of Professional Conduct (Code) in the Tax Agent Services Act 2009 (TASA), you must ensure that tax agent services provided by you or on your behalf are provided competently.

You need to maintain adequate supervision and control in your practice to direct, oversee and check the services provided on your behalf.

You must not sign a declaration or other statement in relation to your client if the relevant document was not prepared by someone under your supervision and control. 

Additionally, the TASA requires partnerships and companies to have a sufficient number of registered individual tax agents to provide tax agent services to a competent standard and to carry out supervisory arrangements.

Signing of declarations

You will breach the civil penalty provisions in the TASA if you sign a declaration or statement required or permitted under a taxation law about your clients that was not prepared by someone working under your supervision and control.

For partnerships and companies, the declaration or statement must not be prepared by an individual who is not working under the supervision and control of a registered individual tax agent.

The penalty imposed for contravening these provisions is:

  • up to 250 penalty units ($52,500) for an individual tax agent
  • up to 1,250 penalty units ($262,500) for a partnership or company tax agent.

Sufficient number requirements

There is no set formula for determining the number of registered individual tax agents a partnership or company is required to have to satisfy the sufficient number requirement. The sufficient number is unique to the particular circumstances of the company or partnership.

We will take into account factors, including:

  • size of the business (for example, turnover, number of clients and number of relevant staff)
  • the types of tax agent services being offered
  • number of qualified and experienced staff
  • the frequency of appropriate training and development activities for all relevant staff
  • the level (and type) of technology or software used
  • supervisory arrangements (for example, quality control practices and escalation procedures) in place
  • any conditions we may have imposed on the entity’s registration based on the qualifications and experience of its personnel.

Third party arrangements

A third party includes any entity other than the client and the registered agent. 

If you outsource elements of your tax agent services to a third party (including an overseas or offshore entity), you need to consider the extent of how outsourcing may impact on your ability to supervise the work being undertaken. There should be documented evidence that ‘work’ undertaken is being adequately supervised and reviewed.

You must also ensure that clients are aware of any third party arrangement and have given their permission for third parties to have access to their information. A letter of engagement is a good way to ensure clients are aware of any third party arrangements and obtain their consent.   

To avoid a potential breach of the Code, you must not disclose any information relating to a client's affairs to a third party without the client’s permission, unless there is a legal duty to do so. You should also ensure that any services provided to clients in Australia from a location outside this country are provided competently, just as must occur within Australia.

More information

For more information refer to:

 

Last modified: 6 July 2017