Walsh and Tax Practitioners Board

[2016] AATA 525

Walsh and Tax Practitioners Board [2016] AATA 525 (25 July 2016)

Division	TAXATION & COMMERCIAL DIVISION
File Number	2016/0304
Re	Mervyn Walsh
APPLICANT
And	Tax Practitioners Board
RESPONDENT

DECISION

Tribunal	Senior Member Walsh
Date	25 July 2016
Place	Perth

The Tribunal affirms the decision under review.

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Senior Member Walsh

CATCHWORDS

TAX AGENT SERVICES – whether Applicant eligible for registration as a BAS agent – whether the Applicant has successfully completed a course in basic GST/BAS taxation principles that is approved by the Respondent – decision under review affirmed

LEGISLATION

Tax Agent Services Act 2009 – s 20-5(1) – s 20-25

SECONDARY MATERIALS

Tax Agent Services Regulations 2009 – reg 7 and Sch 2, Pt 1

TPB Information Sheet TPB(I) 04/2011 BAS agent educational qualification requirements (last updated 23 June 2015)

REASONS FOR DECISION

Senior Member Walsh

25 July 2016

INTRODUCTION

1. The primary issue to be determined in this application is whether Mr Walsh is eligible for registration as a BAS agent under s 20-5(1) of the Tax Agent Services Act 2009 (Act).

2. Central to the determination of this issue is whether Mr Walsh meets the requirement prescribed by the Tax Agent Services Regulations 2009 (Regulations) by successful completion of a course in basic GST/BAS taxation principles that is approved by the Tax Practitioners Board (Board).

   FACTUAL & PROCEDURAL BACKROUND

3. On 4 December 2015, Mr Walsh lodged an online application for registration as a BAS agent (Application). In the Application, in response to the question “Have you completed a Board approved basic GST/BAS taxation principles course which cover knowledge of the Tax Agent Services Act 2009, including the Code of Professional Conduct?”, Mr Walsh answered “Yes” and he described that course as follows:

   CPA Seminar on GST/BAS National Tax Agents & Accountants FBT Seminar National Tax Agents & Accountants Income Tax Basics Days 1 & 2

4. By letter dated 16 December 2015, the Board requested that Mr Walsh inter alia provide evidence of his completion of a course in basic GST/BAS taxation principles approved by the Board.

5. On 28 December 2015, Mr Walsh advised the Board of the following:

   … I have attended various seminars run by the Certified Practicing Accountants (CPA) and the National Tax Accountants & Agents Association (NTAA) since the introduction of GST in 2000.

   I was previously employed by WESPINE Industries Pty Ltd as Finance and Administration manager from the 10^th of May 1993 up to the 23^rd of December 2015, note I retired from WESPINE on the 23^rd of December 2015.

   During that period, I was the person responsible for all the Accounting and Administration of WESPINE, refer to the letter from WESPINE dated the 6^th of November 2015, copy attached.

   When GST was introduced, I was responsible for the implementation of GST into WESPINE and responsible for all of the BAS/GST calculations and returns up to my retirement.

   Since the introduction of GST, there has been no need for any further training because all of the reporting and filing requirements were performed by myself.  Note since the introduction of GST, WESPINE was subject to annual audits by external Auditors and Tax advisers as part of the preparation of the statutory accounts.

6. By email dated 11 February 2016, Mr Walsh informed the Board of the following:

   I would like the current application presented to the committee as I will not be submitting any further information.  I have provided what I believe sufficient information that would allow me to be registered as a BAS agent.

7. On 3 March 2016, a Committee of the Board (Committee), acting under delegated authority of the Board, met and considered the Application (including the additional documents/information provided by Mr Walsh).

8. On 9 March 2016, the Committee decided to reject the Application (Decision).  The Decision states:

   Findings

   14.The Board considered all of your qualifications and experience, including your circumstances as detailed above, and made the following findings in relation to your application:

   ·     The seminars that have been completed by you (being the CPA Seminar on GST/BAS, National Agents & Accountants FBT Seminar, National Agents & Accountants Income Tax Basics Days 1 & 2) were not accepted as being equivalent to a Board approved course in basic GST/BAS taxation principles as these were only CPE events

   ·     Therefore, you did not demonstrate that you have successfully completed a course in basic GST/BAS taxation principles that is approved by the Board as required under Item 102 in Schedule 2 to the TASR

   ·     You did not provide a completed statement of relevant experience (SRE) or other evidence to confirm the hours spent on providing BAS agent service

   ·     Therefore, further information is required to demonstrate that you have met the relevant experience requirement under Item 102 in Schedule 2 to the TASR.

   Conclusions

   15.Therefore, in considering your application in accordance with Item 102 in Schedule 2 to the TASR, given the above findings, the Board was not satisfied that you have successfully completed a course in basic GST/BAS taxation principles that is approved by the Board or obtained the necessary relevant experience.

   16.Accordingly, the Board has rejected your application for registration as a BAS agent under subsection 20-25(1) of the TASA, as it was not satisfied that you met the eligibility requirements for registration as a BAS agent under subsection 20-5(1) of the TASA, in particular under paragraph 20-5(1)(b) of the TASA.

9. Mr Walsh subsequently applied to the Tribunal for a review of the Decision.

10. Mr Walsh provided the Tribunal with a document setting out the reasons for his review application[1].  That document states:

    [1] Exhibit 4.

    1.        Education/training Undertaken – MR Walsh

    (a)The Tax Practitioners Board (TPB) has failed to recognise over 15.5 years practical experience fulfilling the duties required to complete the BAS returns for WESPINE Industries Pty Ltd

    (b)The TPB has failed to recognise the BAS training undertaken with CPA Australia and the National Tax Accountants and Agents Association.  Both organisations are nationally recognised bodies that conduct ongoing training requirements necessary to retail (sic.) the qualifications awarded by CPA Australia.

    In my case as a FCPA, I was required to undertake a minimum of thirty hours per annum of “continuing professional development”.  Up until I retired from fulltime work, I had been a member of CPA Australia for some thirty-four years.

    (c)       Training and Ongoing Development.

    ·     Attendance at CPA Australia Tax Seminars

    ·     Attendance at NTAA Seminars

    ·     Since 2006 to 2013 receiving and reviewing DVD’s from NTAA (11 per annum) called ‘Tax on the Couch’.  These DVDs covered all matters including updates on GST.

    ·     Monthly Taxation emails/correspondence from the company’s tax auditors (KPMG) and more recently AMD Chartered Accountants in Bunbury.  These emails and correspondence covered all tax matters including GST.

    2.        Experience – MR Walsh

    The Tax Practitioners Board (TPB) has failed to recognise over 15.5 years practical experience if (sic.) fulfilling the duties required to complete the BAS returns for WESPINE Industries Pty Ltd.

    (a)As I have previously confirmed that during my employment as the Finance and Administration Manager of WESPINE Industries Pty Ltd, I was responsible for all taxation matters for the company.

    This included the preparation, compilation and lodgement of all the tax returns for the company.  As set out in Appendix A of the Statutory Declaration, the duties did not just cover “oversight or supervision” of another staff members work, the duties included all the requirements to prepare and lodge the returns, please refer to the appendix.

    (b)The TPB has failed to consider that since the introduction of the GST (1 July 2000) it was accepted by the Australian Taxation Office for me the “Public Officer” of the company to be held responsible for the lodgement of all of the tax returns.

    (c)The letter dated the 6^th of November 2015 signed by the Managing Director of WESPINE Industries Pty Ltd clearly supports the duties undertaken.

    (d)The attached letter from Mr Tim Partridge of AMD Chartered Accountants who are the current auditors of WESPINE Industries Pty Ltd.  In the letter Mr Partridge also confirms that I was responsible for all matters required for the company to meet its monthly GST reporting requirements.

    CONSIDERATION

11. Part 2 of the Act deals with the registration of tax agents and BAS agents. Subdivision 20-A of Part 2 of the Act deals with eligibility for registration.

12. Section 20-25(1) of the Act, titled “Registration”, provides:

    (1)If you have applied to the Board for a type of registration, the Board must grant your application if you are eligible for registration of that type.  Otherwise, the Board must reject your application.

13. Section 20-5(1) of the Act, titled “Eligibility for registration as registered tax agent, BAS agent or tax (financial) advisor”, provides:

    (1)An individual, aged 18 years or more, is eligible for registration as a registered tax agent, BAS agent or tax (financial) adviser if the Board is satisfied that:

    (a)       the individual is a fit and proper person; and

    (b)the individual meets the requirements prescribed by the regulations (including, but not limited to, requirements relating to qualifications and experience) in respect of registration as a registered tax agent, BAS agent or tax (financial adviser; and

    (c)the individual maintains, or will be able to maintain, professional indemnity insurance that meets the Board’s requirements; and

    (d)in the case of a renewal of registration – the individual has completed continuing professional education that meets the Board’s requirements. [Emphasis added]

14. It is not in dispute that Mr Walsh satisfies s 20-5(1)(a), (c) and (d) of the Act, as set out above.  What is at issue is whether Mr Walsh satisfies s 20-5(1)(b) of the Act, as set out above.

15. Regulation 7 of the Regulations provides:

    7.        Eligibility for registration as BAS Agent – prescribed requirements

    For paragraph 20-5(1)(b) of the Act, in respect of registration as a registered BAS agent, an individual must meet at least one of the requirements set out in Division 1 of Part 1 of Schedule 2. [Emphasis added]

16. Division 1 of Part 1 of Schedule 2 of the Act contains the following two “Requirements” (in items 101 and 102):

    Accounting qualifications

    101     A requirement is that:

    (a)the individual has been awarded at least a Certificate IV Bookkeeping or a Certificate IV Accounting from

    (i)        a registered training organisation; or

    (ii)       an equivalent institution; and

    (b)has successfully completed a course in basic GST/BAS taxation principles that is approved by the Board; and

    (c)The individual has undertaken at least 1,400 hours of relevant experience in the past 4 years.

    Note:The Board may approve a course by an approval process, an accreditation scheme, or by other means.

    Membership of professional association

    102     A requirement is that:

    (a)the individual has been awarded at least a Certificate IV Financial Services (Bookkeeping), or a Certificate IV Financial Services (Accounting), from:

    (i)        a registered training organisation; or

    (ii)       an equivalent institution; and

    (b)has successfully completed a course in basic GST/BAS taxation principles that is approved by the Board; and

    (c)       the individual is a voting member of:

    (i)        a recognised BAS agent association; or

    (ii)       a recognised tax agent association; and

    (d)the individual has undertaken at least 1,000 hours of relevant experience in the past 4 years.

    Note 1:The Board may approve a course by an approved process, an accreditation scheme, or by other means.

    Note 2:A recognised BAS agent association is explained in regulation 4.  A recognised tax agent association is explained in regulation 5. [Emphasis added]

17. It is not in dispute that Mr Walsh satisfies item 101(a) and (c) and item 102 (a), (c) and (d).  What is in dispute is whether Mr Walsh satisfies item 101(b) or item 102(b) of Division 1 of Part 1 of Schedule 2 of the Regulations (i.e. whether Mr Walsh has “successfully completed a course in basic GST/BAS taxation principles that is approved by the Board”) for the purposes of reg 7 of the Regulations such that he is eligible for registration as a BAS agent under s 20-5(1) of the Act.

18. The Board’s TPB Information Sheet TPB(I) 04/2011, titled “BAS agent education qualification requirements”, last updated 23 June 2015 (TPB (I))[2], describes the educational qualification requirements for individuals seeking registration as a BAS agent under the Act and the Regulations.  The purpose of TPB (I) is to:

    … assist relevant institutions, professional associations, potential registrants, renewing BAS agents and the wider community to understand the qualification requirements for registration as a BAS agent.

    [2] Exhibit 3.

19. Paragraph 11 of TPB (I) provides that a Board approved course should cover at least all of the following 11 topics:

    ·collection and recovery of tax provisions in Part VII of the Fringe Benefits Tax Assessment Act 1986

    ·the indirect tax law (which means the goods and services tax (GST) law, the wine tax law, the luxury car tax law and the fuel tax law, as defined in section 995-1 of the Income Tax Assessment Act 1997 (ITAA 1997))

    ·parts 2-5 and 2-10 of Schedule 1 to the Taxation Administration Act 1953 (TAA) (the pay as you go system)

    ·relevant Australian Taxation Office (ATO) and TPB requirements, including TPB registration requirements, the Code of Professional Conduct (Code) and the operation of the civil penalty provisions

    ·relevant privacy principles as contained in the Privacy Act 1988

    ·GST terminology and appropriate application to financial transactions

    ·taxation requirements for business purposes and taxation parameters related to a range of business types

    ·relevant accounting terminology when maintaining accounting records for a variety of business types for taxation purposes

    ·all sections of both business activity statements and instalment activity statements for multiple entity types, including lodging statements within the allocated timeframe

    ·how to calculate and input data into payroll systems (payroll is included in the definition of a BAS provision), includes PAYG (withholding and instalments), fringe benefits tax (FBT) relating to collection and recovery and preparation of payment summaries

    ·how to comply with organisational guidelines relating to security and confidentiality of information (in order to be able to, or know how to, meet the Code obligations of confidentiality).

20. Paragraph 18 of TPB (I) provides that, from 1 March 2012, a course in basic GST/BAS taxation principles that is approved by the Respondent will comprise the equivalent of two units from a Certificate IV Financial Services qualification. 

21. Further, paragraphs 23 to 28 of TPB (I) provide that a course in basic GST/BAS taxation principles that is approved by the Respondent will involve at least 40% of the assessment for the course being undertaken under some form of independent supervision.  More specifically, TPB (I) provides:

    Assessment.

    23.The TPB is of the view that some means of objective assessment is a key aspect of the approval of courses for registration of applicants as BAS agents. The TPB takes the view that it must be satisfied that applicants have demonstrated their knowledge and skills in the relevant course or components by some means of an independent and objective assessment. Such assessment should be rigorous and have integrity.

    24. Independent and objective assessment refers to assessment practices being conducted under the supervision of a course supervisor, lecturer or other such people. The assessment practice needs to be capable of description as honest and true and should not be administered by a family member, friend or someone that has a close personal or professional relationship with the applicant.

    25.Various forms of assessment may be employed. Ideally because of different learning styles and what is appropriate for different aspects of a course, each course or component should employ a mix of assessment practices including:

    ·     tests

    ·     examinations (oral and written)

    ·     problem based assignments

    ·     essays and reports

    ·     computer based assessment tasks.

    26.Not every one of these need be present in an approved course, so long as one or more of them exists.

    27.The TPB will not accept assessments that either lack rigour or are too narrow in their focus. Such assessments may be seen to be recognised as being one element which is a contributor to overall determination of a student’s performance in a course, rather than being treated as the sole measure of their skills and knowledge in the subject area.

    28.The TPB is of the view that assessment should, to a significant degree (at least 40%), be done under some form of independent supervision (see paragraph 24 for further information on ’independent supervision’). [Emphasis added]

22. The Board has recognised the following 7 “courses” as meeting requirement in item 101(b) and item 102(b) of Division 1 of Part 1 of Schedule 2 to the Regulations:

Course provider	Course code	Course name
1	Applied Education (Education IT Solutions Pty Ltd)	AEB01 and AEBA02	GST law and activity statements Payroll administration and practice
2	Open colleges	EO122/E1099	BAS agent registration skill set
3	Registered training organisation	FNSBKG404 and FNSBKG405	Carry out business activity and instalment activity statement tasks Establish and maintain a payroll system
4	Registered training organisation	FNSBKG404A and FNSBKG405A	Carry out business activity and instalment activity statement tasks Establish and maintain a payroll system
5	TAFE SA	TPB 7	GST/BAS taxation principles
6	University of New South Wales	ATAX0423	Principles of GST law
7	University of Technology Sydney	77900	Goods and services tax

1. Further, the Board has recognised the following 17 “units” that meet part of the requirement in item 101(b) and item 102(b) of Schedule 2 to the Regulations:

Course provider	Unit code	Unit name
1	Applied Education (Education IT Solutions Pty Ltd)	AEBA01	GST law and activity statements
2	Applied Education (Education IT Solutions Pty Ltd)	AEBA02	Payroll administration and practice
3	Curtin University	306536 (pre 2013)*	Taxation 532
4	Curtin University	306536 (post 2013)	Taxation 532
5	Northern Melbourne Institute of TAFE	AM923*	Office tax procedures This is accepted as the equivalent to FNSBKG404A Carry out business activity and instalment activity statement tasks.
6	Queensland University of Technology	AYB122.1 (2003)*	Goods and services tax This is accepted as the equivalent to FNSBKG404A Carry out business activity and instalment activity statement tasks.
7	Registered training organisation	FNBACC2A*	Process business tax requirements This is accepted as the equivalent to FNSBKG404A Carry out business activity and instalment activity statement tasks.
8	Registered training organisation	FNSACCT401A*	Process business tax requirements This is accepted as the equivalent to FNSBKG404A Carry out business activity and instalment activity statement tasks.
9	Registered training organisation	FNSACCT401B*	Process business tax requirements This is accepted as the equivalent to FNSBKG404A Carry out business activity and instalment activity statement tasks.
10	Registered training organisation	FNSBKG404	Carry out business activity and instalment activity statement tasks
11	Registered training organisation	FNSBKG404A	Carry out business activity and instalment activity statement tasks
12	Registered training organisation	FNSBKG405	Establish and maintain a payroll system
13	Registered training organisation	FNSBKG405A	Establish and maintain a payroll system
14	Registered training organisation	FNSBKPG404A*	Carry out business activity and instalment activity statements tasks This is accepted as the equivalent to FNSBKG404A Carry out business activity and instalment activity statement tasks.
15	Registered training organisation	10048NAT*	Diploma of payroll management This is accepted as the equivalent to FNSBKG405A Establish and maintain a payroll system
16	University of Southern Queensland	LAW8220*	Goods and services tax This is accepted as the equivalent to FNSBKG404A Carry out business activity and instalment activity statement tasks.
17	University of Sydney	LAWS6214*	Goods and services tax principles A This is accepted as the equivalent to FNSBKG404A Carry out business activity and instalment activity statement tasks.

*These units do not include knowledge of the Tax Agent Services Act 2009 (TASA), including the Code of Professional Conduct (Code)

1. The Tribunal acknowledges that Mr Walsh has significant (more than 30 years) experience in the accounting profession and that he has participated in extensive CPD (continuing professional development) activities throughout his career and is sympathetic to his position.  However, the evidence is clear that the seminars undertaken by Mr Walsh do not meet the legislative requirements for an approved course in basic GST/BAS taxation principles, as set out above:  refer to paragraphs 19-23.  On his own evidence, the courses attended by Mr Walsh required only that he sit and listen to presentations without any independent assessment being conducted of Mr Walsh on the content of what was presented.  These courses do not meet the mandatory legislative requirements for a Board approved course in basic GST/BAS taxation principles, as set out above:  refer to paragraphs 19-23.

2. Consequently, Mr Walsh does not meet the prescribed requirement under item 101(b) or 102(b) in Division 1 of Part 1 of Schedule 2 to the Regulations of having “successfully completed a course in basic GST/BAS taxation principles that is approved by the Board” and, therefore, he is not eligible for registration under s 20-5(1) of the Act.  As such, Mr Walsh’s application for registration as a BAS agent must be rejected in accordance with s 20-25(1) of the Act.

   DECISION

3. For the above reasons, the Tribunal affirms the Decision.  

I certify that the preceding 26 (twenty -six) paragraphs are a true copy of the reasons for the decision herein of Senior Member Walsh

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Administrative Assistant

Dated 25 July 2016

Date of hearing	19 July 2016
Applicant	In person
Representative for the Respondent	Mr J Matheson