The bookkeeping industry is facing a period of change with the commencement of the Tax Agents Service Act 2009 on 31 March 2010. The objective of the Act is to ensure that tax agent services (including BAS Service) are provided to the public in accordance with appropriate ethical and professional standards. Whilst this will see little change to the operation of existing Tax Agents it may result in significant changes to some bookkeepers providing BAS services.
Bookkeepers providing BAS services will need to be registered as a BAS Agent. They will need to comply with specific standards relating to their education and experience and also satisfy the fit and proper person test.
The Tax Practitioners Board (TPB) is the new body responsible for administering the Act. The TPB has broad ranging powers to make orders under the Act including (but not limited to) the issue of a written caution, ordering the suspension of a person’s registration or in the case of serious breach applying to the Federal Court to impose a civil penalty, which for an individual may be a fine of up to $27,500.
It is important that bookkeepers understand their responsibilities under the Act and commit to satisfying the standards to become registered as a BAS Agent.
The new body responsible for administering the Tax Agent Services Act 2009 is the Tax Practitioners Board.
Tax Practitioners Board
The new body responsible for administering the Act is the Tax Practitioners Board (TPB). The TPB will be responsible for registering BAS agents, has investigation powers, can issue specific orders or impose sanctions for non compliance with the Code of Conduct and anything incidental to the performance of the Act. In circumstances of a serious breach of the Act, the TPB can also apply to the Federal Court to impose a civil penalty, which for an individual may be a fine of up to $27,500 or order an injunction to prevent certain acts.
The powers of the TPB also extend to varying the terms of an individual’s registration and if required terminate a registration.
The definition of Tax Services
A key part of the Act is the definition of BAS Services.
A BAS Services is a tax agent service
a. that relates to;
i. ascertaining liabilities, obligations or entitlements of an entity that arise under a BAS Provision, or
ii. advising an entity about liabilities, obligations or entitlements of the entity or another entity that arise or could arise under a BAS provision, or
iii. representing an entity in their dealings with the Commissioner in relation to a BAS Provision, and
b. that is provided in circumstances where the entity can reasonably be expected to rely on the service for either or both of the following purposes;
i. to satisfy liabilities or obligations that arise or could arise under a BAS Provision,
ii. to claim entitlements that arise or could arise under a BAS Provision.
BAS Service was not defined in the Income Tax Assessment Act and the new legislation adopts a wider perspective giving the Tax Practitioners Board greater flexibility in the application of the Law.
The key part of the BAS Service definition is that it applies to circumstances that require the “application or interpretation of a BAS Provision”, and therefore require a certain level of experience or knowledge of BAS provisions.
The Explanatory Memorandum to the Tax Agents Services Bill 2008 provides direction on how the Laws will be applied. Paragraph 2.41 states that administrative duties such as entering data, paying tax or record keeping are not BAS Services. In paragraph 2.42 other processes such as processing payments, preparing bank reconciliations are not BAS Services.
However, Example 2.12 and Example 2.13 illustrates that in circumstances where a bookkeeper is required to interpret or apply BAS provisions and the client is entitled to rely on their judgement may constitute a BAS Service. This may arise where the bookkeeper is required to code transactions and apply GST or setting up a chart of accounts including setting up the correct GST code for particular transactions. These two transactions may be defined as BAS Service transactions.
However, it is clear that a bookkeeper who is unregistered must not compile a BAS form as this will be a BAS Service. Breach of this provision may result in a Civil Penalty order being made against the individual.
Registration
Bookkeepers who want to provide BAS Services and be entitled to charge a fee for that work must apply to the Tax Practitioners Board to be registered. In order to be entitled to be registered as a BAS Agent, an individual must be a fit and proper person and meet education and experience criteria.
Fit and Proper Person Test
· An individual must be 18 years of age or older and must be a person of good fame, integrity and character.
· Must not have been convicted of a criminal offence, a serious tax offence, fraud or dishonesty, you have not been or become an undischarged bankrupt or have served a prison sentence or been the promoter of as tax exploitation scheme.
Education
Furthermore the individual must also satisfy certain education requirements including;
· Have completed a Certificate IV in Financial Services (Bookkeeping) or Certificate IV in (Accounting) or higher study course in accounting
Experience
· The individual must also be a member of an Approved Bookkeeping Association and have at least 1,400 hours experience during the last 3 years.
Upon being registered as a BAS Agent, the individual must then comply with the Code of Professional Conduct.
Code of Professional Conduct
If an individual becomes a registered BAS Agent they must comply with the Code of Professional Conduct. The key concepts of the Code of Professional Conduct are;
Honesty and Integrity
· You must act with honesty and with integrity
· You must comply with the taxation laws in the conduct of your personal affairs
· You must account for all monies held in a trust account
Independence
· You must act lawfully in the best interests of your client;
· You must have in place adequate arrangements for dealing with conflicts of interest
Confidentiality
· Unless there is a legal duty to do so, you must not disclose any information relating to clients affairs to a third party without permission
Competence
· You must ensure that you have the competence, knowledge and skills to provide the tax services that you provide
Other Responsibilities
· You must not knowingly obstruct the proper administration of the taxation laws
· You must advise the client of the clients rights and obligations under the taxation laws that are materially related to the tax agent services you provide;
· You must provide professional indemnity insurance
· You must respond to requests and directions from the Board in a timely, responsible manner.
Penalties and Sanctions
The Tax Practitioners Board is responsible for administering compliance with the Act. The TPB has the power to make orders for breach of the Code of Professional Conduct and in the case of a serious breach of the Act the TPB may apply to the Federal Court to impose a civil penalty or to order an injunction.
Failure to Comply with Code of Conduct
Compliance with the Code of Conduct is mandatory for all BAS agents. If BAS agents do not comply they may be subject to administrative sanctions imposed by the TPB. The TPB has the power to order any one or more of the following sanctions;
a. A written caution;
b. an order to complete a course of education or training in a specific area;
c. an order to provide services as specified in the specific order;
d. an order to provide services as specified in the order under the direction of a tax agent or BAS agent;
e. suspension of registration;
f. termination of registration.
Civil Penalties
In the event of serious breach of the Act, the TPB may apply to the Federal Court for imposition of a civil penalty. An individual may be fined up to $27,500 and a corporation up to $137,500. Civil penalties apply to the following breaches;
a. If an unregistered entity;
i. Provides a BAS Service for a fee or other reward
ii. Advertising the provision of BAS services; and
iii. Making representations of being registered.
b. For registered entities;
i. Making a false or misleading statement;
ii. Employing or using the services of an entity whose registration has been terminated in certain circumstances, and
iii. Signing a declaration or statement that relates to a document which was prepared by an entity other than a tax agent or BAS agent or an individual under the supervision or control of a tax agent or BAS agent.
Termination of Registration
The TPB has the discretion to terminate the registration of a BAS agent if;
· It no longer meets the registration requirements;
· It breaches a condition of registration; or
· And even happens to the agent that affects its continued registration.
The TPB must terminate a registration;
· Upon the death or dissolution of a BAS agent; or
· When an agent surrenders their registration.
It is important that bookkeepers understand their responsibilities under the Act and commit to satisfying the standards to become registered as a BAS Agent.
To find out how Real Balance can help you with your implementation of the Tax Agent Service Act 2009 call 4962 3387 or send an email to TASA2009@realbalance.com.au.
Downloads
Tax Agent Services Act 2009 Download Tax Agent Services Act 2009
Tax Agent Services Regulations 2009 (Draft) Download Tax Agent Services Regulations 2009 Exposure Draft
Tax Agent Services Act 2009 Explanatory Memeorandum Download Tax Agent Services Bill Explanatory Memorandum 2008
