Tax agents are regulated by the Tax Agent Service Act 2009 (Cth) (TASA) which includes a code of professional conduct (Code of Conduct) and establishes the Tax Practitioners Board (TPB) as the peak regulatory body for tax agents.
Tax agents are required to comply with the Code of Conduct which is included at section 30-10 of the TASA and aims to establish ethical and professional standards. The TPB administers the Code of Conduct in its capacity as the regulator. Requirements of tax agents are broken into five core categories under the code, being:
Acting honestly and with integrity applies to tax agents in both a professional and personal capacity, as demonstrated by the requirement for tax agents to conduct their own affairs in compliance with tax laws.
Tax agents should not mislead or deceive a regulator or the client, and not assist clients in engaging in unlawful activities. The TPB takes guidance from a range of case decisions to understand the threshold principles for ‘honesty and integrity’ of a tax agent, which include:
The requirement for tax agents to be independent is largely focused around acting in the best interests of the client and ensuring that conflicts of interests are managed.
Acting in the best interest of a client involves protecting the client’s interest to the best of the tax agent’s ability, and ahead of their own personal interests if there is any actual or potential conflict. This duty can be characterised as a fiduciary duty, and some core obligations include:
The requirement to act in the client’s best interest is limited by the requirement to act ‘lawfully’. This means that a tax agent cannot justify non-compliance with the law by saying that they are ‘acting in the client’s best interest.’
Tax agents must not disclose any information relating to a client’s affairs to a third party without authorisation from the client, unless there is a legal duty to do so. Legal duties which may override this obligation include a statutory requirement to provide information to bodies such as the TPB or ASIC.
Tax agents should review client consent processes to ensure that permission is sought to pass on information to third parties as required.
Tax practitioners are obliged to ensure that tax advice or services which they provide, or are provided on their behalf, are done so competently. Providing competent advice involves ensuring that the advice is technically sound. Tax agents should ensure they are up to date with the relevant laws and accounting standards, and maintain knowledge necessary to provide a professional standard of tax advice.
Additionally, tax practitioners should ensure that the terms of client engagement are clear and that they act in accordance with these terms, meeting relevant timelines and completing all work required.
Critically, as part of providing competent advice, tax agents must take reasonable care to ensure that the tax laws are applied correctly to the circumstances about which advice is being provided.
In addition to the four core categories, other responsibilities of tax agents include:
Tax agents must not knowingly obstruct the proper administration of the tax laws.
Tax agents must advise their clients of their rights and obligations related to the tax agent services being provided. This is typically linked to the scope of the engagement.
Tax agents must maintain professional indemnity insurance required by the TPB.
Tax agents must respond to requests and directions from the TPB in a timely, responsible, and reasonable manner.
The TPB may impose various sanctions for noncompliance with the Code of Conduct, including:
Conduct that constitutes a breach of the Code of Conduct may also lead to a determination of whether a tax agent is a fit and proper person, or whether civil penalties will apply.
Disputes typically arise when the TPB makes a finding against a tax agent and decides to limit, terminate or suspend their registration.
Reasons for the TPB to make a decision affecting a tax agent’s registration include:
Grounds for termination of registration vary for individuals, partnerships or companies.
If the TPB decides to terminate a registration, they must:
The termination will be recorded on the TPB register (unless the registration was surrendered), and will remain on the record for 12 months. The maximum period of prohibition of re-applying for registration is five years (except for bankruptcy or administration). An unregistered tax agent must not provide any tax agent or Business Activity Statement services for a fee, or hold themselves out to be a registered tax agent.
Decisions by the TPB relating to a tax agents registration can in most cases be reviewed in the Administrative Appeals Tribunal. Our team can assist if you are under review by the TPB or if you wish to object to or challenge a decision of the TPB.
Our tax disputes team leverages our tax technical and dispute resolution knowledge to assist tax agents in engagements with the TPB, and with any disputes that may follow, including decisions by the TPB to terminate a tax agents’ registration.
We can provide: