30/03/2010

With the introduction of the Tax Agent Services Act 2009 (TASA) on 1 March 2010, registered tax and BAS agents should ensure they understand and comply with the Code of Professional Conduct and the ‘safe harbour’ provisions set out in the new laws.

Why was the TASA introduced?

The purpose of TASA is to:

·         Regulate the conduct of tax service providers by bringing them within a legislative regime; and

·         Provide protection to the taxpayers who engage and rely on tax or BAS agents against the imposition of tax penalties as a result of the agent’s misconduct.

What does the Code of Professional Conduct (CPC) require?

In summary, the code requires that registered agents:

1. carry out their duties with honesty and integrity;
2. comply with the tax laws in respect of their own affairs;
3. act independently and lawfully in the best interest of their clients;
4. not disclose client’s confidential information to third parties;
5. provide their services competently ensuring that:
   1. they take reasonable care in carrying out their duties;
   2. they take reasonable care to apply the correct tax laws having regard to the client’s circumstances; and
   3. maintain relevant knowledge and skills in the field of their services
6. respond to requests and directions from the Tax Practitioners Board in a reasonable and timely manner;
7. advise clients of their rights and obligations under the relevant tax laws. 

What do the ‘safe harbour’ provisions mean to tax agents and clients?

The TASA also introduced the concept of a ‘safe harbour’ for taxpayers.  Essentially, the provision ensures that taxpayers who would have faced administrative penalties due to their tax agent’s failure to lodge a document within the required time or making a false or misleading statement prior to the introduction of TASA are now able to rely on the safe harbour relief and avoid those penalties altogether.  The onus of proof in relation to the safe harbour provisions rests with the taxpayer.

So what should tax agents or BAS agents do?

With the introduction of the TASA, tax agents and BAS agents now have increased obligations and duties to their clients.  It is important to ensure that they review and if necessary change the way in which they deal with their clients.

For a more detailed discussion on the TASA or advice on whether you are at risk of breaching the Code of Professional Conduct, please contact TOWNSENDS BUSINESS AND CORPORATE LAWYERS on (02) 8296 6222.