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Terms explained

Terms explained

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A

Australian financial services licensee

An Australian financial services licensee is defined in Chapter 7 of the Corporations Act 2001 as a person who holds a licence under section 913B that authorises a person who carries on a financial services business to provide financial services.

(Chapter 7 of Corporations Act 2001) 

Authorised representative

An authorised representative of a financial services licensee is defined in Chapter 7 of the Corporations Act 2001 as a person authorised in accordance with sections 916A or 916B to provide a financial service or financial services on behalf of the licensee.

(Chapter 7 of Corporations Act 2001)

B

BAS provision

A BAS provision includes: 

  • GST law
  • wine equalisation tax law
  • luxury car tax law
  • fuel tax law
  • fringe benefits tax law (relating to collection and recovery only)
  • pay as you go (PAYG) withholding
  • PAYG instalments.

(Subsection 995-1(1) of the Income Tax Assessment Act 1997)

BAS service

A BAS service is any service that relates to: 

  • ascertaining liabilities, obligations or entitlements of an entity that arise, or could arise, under a BAS provision
  • advising an entity about liabilities, obligations or entitlements of an entity or another entity that arise, or could arise, under a BAS provision 
  • representing an entity in their dealings with the Commissioner of Taxation, and

is provided in circumstances where the entity can reasonably be expected to rely on the service for either or both of the following purposes:

  • to satisfy liabilities or obligations that arise, or could arise, under a BAS provision, or 
  • claim entitlements that arise, or could arise, under a BAS provision.

A BAS service also includes a service that the Tax Practitioners Board has declared, by way of a legislative instrument to be a BAS service.

(Section 90-10 of the Tax Agent Services Act 2009) 

Business

Carrying on a business

You 'carry on a business' as a:

  • tax agent if you provide tax agent services and invoice clients in your own right and under your own registration number
  • BAS agent if you provide BAS services and invoice clients in your own right and under your own registration number
  • tax (financial) adviser if you provide tax (financial) advice services for a fee or other reward. A fee includes an amount, part or all of which is payable via a third party. For example, an authorised representative receives an amount that has been passed on by their Australian financial services licensee and/or corporate authorised representative.

Not carrying on a business

You do 'not carry on a business' as a:

  • tax agent if you provide tax agent services and invoice clients on behalf of another registered tax practitioner (such as your employer)
  • BAS agent if you provide BAS services and invoice clients on behalf of another registered tax practitioner (such as your employer)
  • tax (financial) adviser if you provide services on behalf of another registered tax practitioner (such as your employer) and do not charge or receive a fee or other reward.

C

Competent standard

Competence, with respect to tax agents, BAS agents and tax (financial) advisers (collectively known as tax practitioners), can be defined as a state of being capable, fitting, suitable or sufficient to provide a tax agent, BAS or tax (financial) advice service.

A tax practitioner will be competent if the tax practitioner possesses such skill, ability and knowledge required to perform a tax agent, BAS or tax (financial) advice service that clients may entrust their taxation affairs to the tax practitioners care.

Additionally, in respect of the tax and BAS agents, officers of the Australian Taxation Office (ATO) may rely upon the client returns or other documents prepared by the tax or BAS agent.

Competency should be demonstrated via a certificate or reference from a tax practitioner's employer or, if they are a contractor, their principal. Also, a tax practitioner may be able to provide supporting documentation from a registered tax agent, BAS agent, tax (financial) adviser or other person who is familiar with their work to demonstrate their competency.

F

Fit and proper

In deciding whether an individual is a fit and proper person, we consider:  

  • whether the individual is of good fame, integrity and character 
  • whether one of these events occurred, to the individual, during the previous five years: 
    • convicted of a serious taxation offence
    • convicted of an offence involving fraud or dishonesty 
    • penalised for being a promoter of a tax exploitation scheme
    • penalised for implementing a scheme that has been promoted on the basis of conformity with a product ruling in a way that is materially different from that described in the product ruling
    • become an undischarged bankrupt or go into external administration
    • sentenced to a term of imprisonment.

(Section 20-15 of the Tax Agent Services Act 2009)

R

Relevant experience 

Tax agents 

For tax agents, relevant experience means substantial involvement* in tax agent services or a particular area of taxation law undertaken by an individual:

  • as a tax agent registered under current or previous law 
  • under the supervision and control of a tax agent under current or previous law 
  • as an Australian legal practitioner, or 
  • of another kind approved by us.

* Substantial involvement means ample or considerable amount of involvement. It requires more than simply being involved from time to time in the provision of one or more types of tax agent services.

If an agent has another kind of ‘relevant experience’, they should make a submission to us.

The amount of relevant experience required of individuals varies depending on qualifications. If seeking to register through the:  

  • tertiary qualifications in accountancy, tertiary qualifications in another discipline or tertiary qualifications in law options you will need to have engaged in the equivalent of 12 months full-time, relevant experience in the preceding five years 
  • diploma or higher award option you will need to have engaged in the equivalent of two years full-time, relevant experience in the preceding five years 
  • work experience or membership of a professional association option you must have engaged in the equivalent of eight years full-time, relevant experience in the past 10 years.

(Item 207 of Part 2, Schedule 2 of the Tax Agent Services Regulations 2009) 

BAS agents

For BAS agents, relevant experience means substantial involvement* in BAS services undertaken by an individual:

  • as a tax agent or BAS agent registered under the current law
  • as a tax agent registered under the previous law
  • under the supervision and control of a BAS agent or tax agent registered under the current law
  • under the supervision and control of a tax agent registered under the previous law, or
  • of another kind approved by us.

* Substantial involvement means ample or considerable amount of involvement. It requires more than simply being involved from time to time in the provision of one or more types of BAS services.

If an agent has another kind of ‘relevant experience’, they should make a submission to us.

The amount of relevant experience required of individuals varies depending on qualifications. If seeking to register through the:

  • membership of a professional association option you will need 1,000 hours of relevant experience in the past four years
  • accounting qualification option you will need 1,400 hours of relevant experience in the past four years.

(Item 103 of Part 1, Schedule 2 of the Tax Agent Services Regulations 2009) 

Tax (financial) advisers

Standard option

For tax (financial) advisers applying for or renewing their registration under the standard option, relevant experience means substantial involvement* in one or more tax (financial) advice services or a particular area of taxation law relating to tax (financial) advice services undertaken by an individual:

  • as a tax agent or a tax (financial) adviser under the current law
  • as a tax agent registered under the previous law
  • under the supervision and control of a tax agent or tax (financial) adviser under the current law
  • under the supervision and control of a tax agent registered under the previous law
  • of another kind approved by us.

*Substantial involvement means ample or considerable involvement. It requires more than simply being involved from time to time in the provision of one or more types of tax (financial) advice services.

If an individual has relevant experience of ‘another kind’, they must include a submission with their application.

The amount of relevant experience required of individuals varies depending on qualifications. If seeking to register through the:

  • tertiary qualifications in a relevant discipline* option, you will need to have engaged in the equivalent of 12 months full-time, relevant experience in the preceding five years
  • diploma or higher award in a relevant discipline* option, you will need to have engaged in the equivalent of 18 months full-time, relevant experience in the preceding five years
  • work experience option, you will need to have engaged in the equivalent of three years of full-time, relevant experience in the preceding five years
  • membership of a professional association option, you must have engaged in the equivalent of six years full-time, relevant experience in the preceding eight years.

*Relevant discipline includes finance, financial planning, commerce, economics, business, tax, accountancy and law.

(Item 50 of Schedule 1 of the Tax Agent Services Regulations 2009)

See Sufficient experience requirements for tax (financial) advisers registering under the transitional option. 

Registered tax practitioner

A registered tax practitioner is a tax agent, BAS agent or tax (financial) adviser registered with us. 

Representative

Representative is defined in paragraph 910A(a) of the Corporations Act 2001 to mean:
            representative of a person means:
              (a) if the person is a financial services licensee:
                          (i) an authorised representative of the licensee
                          (ii) an employee or director of the licensee
                          (iii) an employee or director of a related body corporate of the licensee; or
                          (iv) any other person acting on behalf of the licensee.

S

Serious taxation offence

A serious taxation offence is defined in section 90-1 of the Tax Agent Services Act 2009 (TASA) as: 

  • an offence against section 134.1, 134.2, 135.1, 135.2 or 135.4 of the Criminal Code , if the offence relates to a tax liability (within the meaning of the Taxation Administration Act 1953); or 
  • a taxation offence that is punishable on conviction by a fine exceeding 40 penalty units, or imprisonment, or both. 

(Section 90-1 of the Tax Agent Services Act 2009) 

Sufficient experience

Tax (financial) advisers applying to register under the transitional option will need to demonstrate that they have ‘sufficient experience’ to be able to provide tax (financial) advice services to a competent standard.

Sufficient experience is generally the equivalent of 18 months or longer of full time experience that is related to the provision of a tax (financial) advice service or tax advice given in the context of financial advice.

This experience does not need to be a continuous period of experience and can be accrued at any time before an application for registration is submitted to us.

(Item 50 in Schedule 1, Part 3 of the Tax Laws Amendment (2013 Measures No. 3) Act 2013) 

Sufficient number of registered individuals

A company or partnership seeking registration as a tax agent, a BAS agent or a tax (financial) adviser under the standard option will need to meet the 'sufficient number' requirement. There is no set formula that can be applied for determining the sufficient number of registered individuals that a partnership or company is required to have in order to satisfy this requirement.

We recognise that what is a ‘sufficient number of individuals’ will depend on the individual circumstances of the partnership or company and the work they are required to undertake for their clients.

Such factors that will need to be considered are: 

  • the size of the business
  • the services being offered
  • the supervisory arrangements in place
  • the conditions that may be imposed on the partnership or company registration based on the qualifications and experience of its personnel.

However, knowing the basic requirements for partnerships or companies, of having a sufficient number of registered individuals, the requirement to provide services to a competent standard and to allow for supervision, should enable professionals themselves to determine what is required. 

Supervisory arrangements

Supervisory arrangements may be arrangements aimed at directing, overseeing and checking the services performed on behalf of a tax practitioner to ensure that those services are provided competently. However, whether a tax practitioner has appropriate supervisory arrangements in place will be a question of fact to be determined by us in particular cases.

We will, if necessary, consider the measures taken by a tax practitioner to supervise and control relevant activities performed by or on behalf of the tax practitioner.

A number of factors may be relevant in determining whether adequate supervisory arrangements are or have been in place. For example: 

  • the nature and frequency of any physical oversight by the tax practitioner over the provision of tax agent, BAS or tax (financial) advice services on their behalf 
  • the physical or geographic proximity of the tax practitioner to the person carrying out the work
  • whether there is substantial supervision, rather than mere checking of documents 
  • whether the tax practitioner performs periodic and spot checks of material prepared by staff 
  • whether the tax practitioner conducts regular audits of work undertaken by staff to ensure the accuracy and completeness of the services provided on their behalf
  • the degree of control exercised by the tax practitioner over the way in which a person carries out the work on their behalf
  • the level of relevant educational and practical training undertaken by staff performing work on behalf of the tax practitioner
  • whether there are documented procedures for staff to escalate issues that are beyond their knowledge or experience to an appropriate supervisor.

We may provide further information about adequate staffing and supervisory arrangements from time-to-time. However, knowing the basic requirements for partnerships or companies, of having a sufficient number of registered individuals, the requirement to provide services to a competent standard and to allow for supervision, should enable professionals themselves to determine what is required.

Registered individuals may include partners, directors, employees, contractors and staff provided under service trust arrangements.

T

Tax agent service

A tax agent service is any service that relates to:  

  • ascertaining liabilities, obligations or entitlements of an entity that arise, or could arise, under a taxation law
  • advising an entity about liabilities, obligations or entitlements of an entity or another entity that arise, or could arise, under a taxation law 
  • representing an entity in their dealings with the Commissioner of Taxation, and

is provided in circumstances where the entity can reasonably be expected to rely on the service for either or both of the following purposes to:  

  • satisfy liabilities or obligations that arise, or could arise, under a taxation law 
  • claim entitlements that arise, or could arise, under a taxation law.

(Section 90-5 of the Tax Agent Services Act 2009) 

Taxation law

Taxation law is defined to mean an Act (including a part of an Act) of which the Commissioner has the general administration, or regulations under such an Act. It includes also the Tax Agent Services Act 2009 (TASA) and the Tax Agent Services Regulations 2009 (TASR). 

Taxation offence

Taxation offence means: 

  • an offence against a taxation law, or
  • an offence against:
    • section 6 of the Crimes Act 1914 (being an accessory after the fact)
    • section 11.1 of the Criminal Code (attempting to commit an offence)
    • section 11.4 of the Criminal Code (incitement to the commission of an offence), or
    • section 11.5 of the Criminal Code (conspiring with another person to commit an offence). 

Tax (financial) advice service

A tax (financial) advice service is any service provided by an Australian financial services licensee (AFS licensee) or their representative in the course of giving advice of a kind usually given by an AFS licensee or their representative that relates to:

  • ascertaining liabilities, obligations or entitlements of an entity that arise, or could arise under a taxation law
  • advising an entity about liabilities, obligations or entitlements of the entity or another entity that arise, or could arise under a taxation law, and

is provided in circumstances where the entity can reasonably be expected to rely on the service for either or both of the following purposes:

  • to satisfy liabilities or obligations that arise, or could arise under a taxation law
  • to claim entitlements that arise, or could arise, under a taxation law.

However, a service is not a tax (financial) advice service if it consists of preparing a return or statement in the nature of a return.

A tax (financial) advice service also includes a service that the Tax Practitioners Board has declared, by way of a legislative instrument to be a tax (financial) advice service.

(Section 90-15 of the Tax Agent Services Act 2009)

 

Last modified: 2 June 2017