The Government introduced the TAS regime to apply from 1 March 2010.
The objective of the TAS regime is to ensure that tax agent services and Business Activity Statement (BAS) services provided to the public are of an appropriate ethical and professional standard.
A registered tax agent is defined as a person or entity registered under the Tax Agent Services Act 2009 (‘TASA 2009’) to provide a tax agent service.
A person or entity must be registered as a tax agent under TASA 2009 if they provide a tax agent service or BAS service for a fee or other reward.
A service is taken to be provided for a fee even if the fee for the tax agent service or BAS service is wrapped up with other fees for other services.
Examples of tax agents services include (but are not limited to) the following:
- preparing or lodging a return, notice, statement, application or other document about a taxpayer's liabilities, obligations or entitlements under a taxation law to the Commissioner of Taxation (‘Commissioner’)
- preparing or lodging on behalf of a taxpayer an objection against an assessment, determination, notice or decision under a taxation law to the Commissioner
- dealing with the Commissioner on behalf of a taxpayer
- giving a taxpayer advice about a taxation law that the taxpayer can reasonably be expected to rely upon to satisfy their taxation obligations. Specific examples include:
- advising on where to disclose items on an income tax return
- advising on how certain assets should be treated for tax purposes
- advising on cost base calculations
- preparing written advice (whether in email or other) on the application of any tax laws.
Civil penalties may apply to an unregistered entity that engages in the following conduct:
- provides tax agent services or BAS services for a fee or other reward;
- advertises the provision of tax agent services or BAS services; or
- makes representations of being registered.
The amount of civil penalties for individuals may range from $8,500 to $42,500.
The amount of civil penalties for a body corporate may range from $42,500 to $212,500.
The TAS Board can also seek injunctions to prevent persons engaging in the conduct listed above.
From 1 July 2014, financial advisers providing tax (financial) advice services will need to register with the Tax Practitioners Board(TPB), as part of an amendment to the TASA 2009. Previously, financial advisers were exempted from the tax agent services regime, however this exemption ceased on 30 June 2014.
A tax (financial) advice service consists of five key elements:
- a tax agent service (excluding representations to the Commissioner of Taxation):
- provided by an Australian financial services (AFS) licensee or representative of an AFS licensee
- provided in the course of advice usually given by an AFS licensee or representative
- relates to ascertaining or advising about liabilities, obligations or entitlements that arise, or could arise, under a taxation law
- reasonably expected to be relied upon by the client for tax purposes.
Financial advisers will continue to be licensed (or authorised under an AFS licensee). In addition, obligations under the Corporations Act will not be affected by the new regulatory framework. ASIC will continue to regulate the AFS licensing regime, independently from the TPB.
The new TAS regime commenced on 1 July 2014, with a three-year transitional period before commencing in full on 1 July 2017.
For further information on registration as a tax (financial) adviser, please see the TPB website.