Treasury Laws Amendment (2023 Measures No. 1) Act 2023 (101 of 2023)
Schedule 3 Government response to the Review of the Tax Practitioners Board
Part 1 Obligations relating to the provision of tax agent services
Tax Agent Services Act 2009
4 After Part 4
Insert:
Part 4A - Disqualified entities
Division 45 - Disqualified entities
Guide to this Division
45-1 What this Division is about
A registered tax agent or BAS agent must be approved to employ, or use the services of, a disqualified entity to provide tax agent services on the registered tax agent or BAS agent's behalf (see subsection 30-10(15) and section 50-25). Approval is sought by application to the Board.
An entity is a disqualified entity if, among other things, the entity is subject to sanctions under this Act or has been convicted of certain offences.
A disqualified entity must give notice to a registered tax agent or BAS agent in relation to being a disqualified entity:
(a) when seeking to provide, or providing, tax agent services on the registered tax agent or BAS agent's behalf; or
(b) if the entity is seeking to enter an arrangement, or has an arrangement, with the registered tax agent or BAS agent in connection with the provision of tax agent services by the registered tax agent or BAS agent.
Table of sections
45-5 Approval of disqualified entity providing tax agent services on your behalf
45-10 Obligation to give notice if you are a disqualified entity
45-15 Obligation to give notice if you become a disqualified entity
45-20 Transitional obligation to give notice if you are a disqualified entity on the commencement of this section
45-5 Approval of disqualified entity providing tax agent services on your behalf
Application
(1) If you are a *registered tax agent or BAS agent, you may apply to the Board for approval to employ, or use the services of, a *disqualified entity to provide *tax agent services on your behalf.
Note: If you know, or ought reasonably to know, that an entity is a disqualified entity, you must be approved to employ, or use the services of, the disqualified entity to provide tax agent services on your behalf: see subsection 30-10(15) and section 50-25.
(2) A disqualified entity is an entity that is neither a *registered tax agent or BAS agent nor a *qualified tax relevant provider and that, within the last 5 years:
(a) has been convicted of:
(i) a *serious taxation offence; or
(ii) a *serious offence; or
(iii) an offence involving fraud or dishonesty; or
(b) has been penalised for being a *promoter of a *tax exploitation scheme; or
(c) has been 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; or
(d) has become an undischarged bankrupt or has gone into *external administration; or
(e) has had action taken against it under subsection 30-15(2) (sanctions for failure to comply with the Code of Professional Conduct); or
(f) has had its registration terminated, under Subdivision 40-A; or
(g) has had an application for registration or renewal of registration rejected under section 20-25, other than a rejection on the ground that the Board is not satisfied that the entity meets the requirements in paragraph 20-5(1)(b); or
(h) has been found by the Board, after being investigated under section 60-95, or by a Court, to have contravened this Act.
(3) Your application must be:
(a) in the form approved by the Board; and
(b) accompanied by any documents that are required by the Board.
Decision
(4) The Board must decide your application:
(a) within 60 days of receiving your application; or
(b) if, within 60 days of receiving your application, you and the Board agree on a longer period for the Board to decide your application - within the agreed period.
(5) If the Board does not decide your application within the applicable period under subsection (4), the Board is taken to have rejected the application.
(6) The Board may decide to give you approval, having regard to:
(a) the reasons why the entity is a *disqualified entity and the circumstances relating to those reasons; and
(b) the proposed role that the entity would perform in providing the *tax agent services on your behalf; and
(c) the extent to which the reasons why the entity is a disqualified entity are relevant to the entity's ability to perform the proposed role to an appropriate standard of professional and ethical conduct; and
(d) any other matters that the Board considers relevant.
Notification of decision
(7) The Board must, within a reasonable period after its decision to give you approval or to reject your application for approval, notify you in writing of:
(a) the decision; and
(b) if the Board rejects your application - the reasons for the decision.
However, failure to comply with this subsection does not affect the validity of the Board's decision.
45-10 Obligation to give notice if you are a disqualified entity
(1) If:
(a) you are a *disqualified entity; and
(b) you are seeking to provide *tax agent services on behalf of a *registered tax agent or BAS agent;
you must notify the registered tax agent or BAS agent, in writing, that you are a disqualified entity before the registered tax agent or BAS agent:
(c) enters into a contract to employ you, or use your services, to provide tax agent services on the registered tax agent or BAS agent's behalf; or
(d) renews such a contract; or
(e) agrees to extend such a contract.
(2) If:
(a) you are a *disqualified entity; and
(b) you are seeking to enter into an *arrangement with a *registered tax agent or BAS agent in connection with the provision of tax agent services by the registered tax agent or BAS agent;
you must notify the registered tax agent or BAS agent, in writing, that you are a disqualified entity before the registered tax agent or BAS agent:
(c) enters into an arrangement with you in connection with the provision of tax agent services by the registered tax agent or BAS agent; or
(d) renews such an arrangement; or
(e) agrees to extend such an arrangement.
Civil penalty
(3) You contravene this subsection if you fail to give a notice in accordance with subsection (1) or (2).
Civil penalty:
(a) for an individual - 250 penalty units; and
(b) for a body corporate - 1,250 penalty units.
Note: Subdivision 50-C of this Act and Subdivision 298-B in Schedule 1 to the Taxation Administration Act 1953 determine the procedure for obtaining a civil penalty order against you.
45-15 Obligation to give notice if you become a disqualified entity
(1) If you become a *disqualified entity and:
(a) you are providing *tax agent services on behalf of a *registered tax agent or BAS agent; or
(b) there is an *arrangement in force between you and a *registered tax agent or BAS agent in connection with the provision of tax agent services by the registered tax agent or BAS agent;
you must notify the registered tax agent or BAS agent, in writing, that you are a disqualified entity.
(2) You must notify the registered tax agent or BAS agent within 30 days of the day on which you become, or ought to have become, aware, that you are a disqualified entity.
Civil penalty
(3) You contravene this subsection if you fail to give a notice in accordance with this section.
Civil penalty:
(a) for an individual - 250 penalty units; and
(b) for a body corporate - 1,250 penalty units.
Note: Subdivision 50-C of this Act and Subdivision 298-B in Schedule 1 to the Taxation Administration Act 1953 determine the procedure for obtaining a civil penalty order against you.
45-20 Transitional obligation to give notice if you are a disqualified entity at the commencement of this section
(1) If:
(a) immediately before the day this section commences a *registered tax agent or BAS agent employs you, or uses your services, to provide *tax agent services on the registered tax agent or BAS agent's behalf; and
(b) at the start of the day this section commences you are a *disqualified entity; and
(c) immediately before the day that is 12 months after the day this section commences the registered tax agent or BAS agent employs you, or uses your services, to provide tax agent services on the registered tax agent or BAS agent's behalf; and
(d) you have not already notified the registered tax agent or BAS agent under section 45-10 or 45-15 that you are a disqualified entity;
you must notify the registered tax agent or BAS agent, in writing, that you are a disqualified entity. You must give the notice within 30 days of the day that is 12 months after the day this section commences.
(2) If:
(a) immediately before the day this section commences there is an *arrangement in force between you and a *registered tax agent or BAS agent in connection with the provision of *tax agent services by the registered tax agent or BAS agent; and
(b) at the start of the day this section commences you are a *disqualified entity; and
(c) immediately before the day that is 12 months after the day this section commences there is an arrangement in force between you and the registered tax agent or BAS agent in connection with the provision of tax agent services by the registered tax agent or BAS agent; and
(d) you have not already notified the registered tax agent or BAS agent under section 45-10 or 45-15 that you are a disqualified entity;
you must notify the registered tax agent or BAS agent, in writing, that you are a disqualified entity. You must give the notice within 30 days of the day that is 12 months after the day this section commences.
Civil penalty
(3) You contravene this subsection if you fail to give a notice in accordance with subsection (1) or (2).
Civil penalty:
(a) for an individual - 250 penalty units; and
(b) for a body corporate - 1,250 penalty units.
Note: Subdivision 50-C of this Act and Subdivision 298-B in Schedule 1 to the Taxation Administration Act 1953 determine the procedure for obtaining a civil penalty order against you.