EXPLANATORY STATEMENT
STATUTORY RULES 1988 NO.262
ISSUED BY THE AUTHORITY OF THE TREASURER
The Taxation Laws Amendment Act (No.2) 1988 (the amending Act) which was assented to on 24 June 1988, amended a number of provisions of the Income Tax Assessment Act (the Act). By subsection 2(2) of the amending Act, the amendments of Part VIIA of the Act - the tax agent provisions - will come into operation on a date to be proclaimed. These regulations amending the Income Tax Regulations (the Principal Regulations) will make a number of amendments consequential upon amendments to be made of Part VIIA of the Act by the amending Act.
Introductory Note
The amending regulations will prescribe the academic and experience qualifications necessary for a person to satisfy the qualifications criteria to be applied by a Tax Agents Board (a Board) to determine whether an applicant for registration or re-registration as a tax agent is a fit and proper person to prepare income tax returns and transact business on behalf of taxpayers in income tax matters.
The amending regulations will also repeal regulations containing procedures for the completion of applications for registration as a tax agent or additional or substituted nominees, the cancellation of a tax agent’s registration and appeals in connexion with such cancellation. These matters are to be included in Part VIIA of the Act by the amendments to be made of that Part by the amending Act.
The requirement that the Commissioner publish the names and addresses of registered tax agents in the Gazette each year is to be replaced with the requirement that each State Board maintains a register of relevant particulars in respect of each registered tax agent having a place of business in the State for which the Board is constituted.
In order to protect the interests of taxpayers, the existing requirement that the cancellation of a tax agent’s registration be notified in the Gazette is to be extended so that notification of an agent’s cancellation or suspension will also be published in the newspapers.
A number of technical amendments of the Principal Regulations are necessary as a consequence of the amendments to be made of Part VIIA of the Act. Other minor amendments of Part VIIA of the Principal Regulations are to be made to generally modernise and improve the Part which has remained relatively unchanged since it was first introduced.
Details of proposed Regulations
A detailed explanation of each of the proposed regulations follows.
Regulation 1 facilitates references to the Income Tax Regulations which are referred to as the “Principal Regulations”.
Regulation 2 will insert new regulation 58CA which will prescribe the academic and experience qualifications necessary for a person to be registered or re-registered as a tax agent or as a nominee of a registered tax agent for the purposes of Part VIIA of the Act.
The required academic and experience qualifications have been split into four groupings with a various combinations of academic and experience required for each group. The academic requirements are based on the different levels of tertiary and further education available in Australia.
In addition to the formal qualifications, two of the groups require the successful completion of a course of study in basic accounting principles of the standard provided by a college of technical and further education while all four groups require the successful completion of a course in basic Australian tax law. The course in basic accounting principles is the minimum requirement and may, of course, be of a higher standard. The course in Australian tax law is to be acceptable to the Board. Both the course in basic accounting principles and Australian tax law may have been completed during the completion of the degree, diploma, certificate, etc which forms the basis of the academic requirements.
The Board will have the discretion to determine whether other qualifications are of an equivalent standard to qualifications gained from an Australian university, college or other tertiary institution. For example, qualifications from an overseas institution may be considered to be equivalent to Australian qualifications. Completion of all academic requirements must be successful.
Certain experience is to be required in addition to the academic requirements. Experience is to be based on relevant employment in a full-time or part-time basis or a combination of both, or other employment on a full-time basis of a type considered by the Board to be equivalent to relevant experience.
Regulation 3 repeals regulations 58D, 58E and 58FA of the Principal Regulations. Regulations 58D and 58E provide that an application for registration as a tax agent or additional or substituted nominee contains the prescribed information and such further information as the Board may require. Regulation 58FA requires a declaration to be made by the applicant stating that the information contained in an application is true and correct. The functions performed by regulations 58D, 58E and
58FA in relation to prescribed and further information have been embodied in section 251J of the Act by the amending Act.
Regulation 58F of the Principal Regulations prescribes the information to be furnished by an applicant for exemption from the operation of section 251L of the Act. Under that section an unregistered tax agent is not permitted to demand a fee for transacting any business on behalf of a taxpayer in income tax matters. Regulation 58FA, to be repealed by regulation 3, requires, inter alia, an applicant to state that the information contained in an application for exemption from the operation of section 251L of the Act is true and correct in every particular.
Regulation 4 amends regulation 58F of the Principal Regulations by including new subregulation 58F(2) which requires such a declaration to be made in an application for exemption from the operation of section 251L of the Act.
Regulation 58G of the Principal Regulations prescribes the place of lodgment of applications for registration as a tax agent, additional or substituted nominee and exemption from section 251L of the Act. Regulation 5 repeals existing regulation 58G and replaces it with new regulation 58G that reflects the new registration provisions contained in Part VIIA of the amending Act.
Under regulation 58H a Board must issue a certificate of registration when an applicant is registered as a tax agent under section 251J of the Act. Under the amendments to be made to Part VIIA of the Act by the amending Act, an applicant may be registered under new sections 251JA or 251JF. Regulation 6 will therefore omit the reference in regulation 58H to section 251J and replace it with a reference to new sections 251JA or 251JF.
Regulation 7 omits the reference to “additional nominee and substitued nominee” as these terms are no longer used in Part VIIA of the Act.
Regulation 58K of the Principal Regulations requires the Commissioner to publish every year in the Gazette the full names and addresses of all registered tax agents. This is a costly exercise and very few copies of the Gazette are sold each year. Regulation 8 repeals the present regulation 58K and replaces it with new regulation 58K.
New subregulation 58K(1) requires each Board to maintain a register of the relevant particulars of each registered tax agent in each State. The relevant particulars are prescribed in new subregulation 58K(2) as -
• the name of the person or partnership (paragraph (a)), and, where the person practices under a different name - the name under which the person practices (paragraph(b));
• the address or addresses where the tax agent practices (paragraph (c));
• the name of any nominees of the tax agent (paragraph (d)); and
• particulars of any suspension of the tax agent (paragraph (e)).
Where those particulars change the tax agent is required to notify the Board of the change (new subregulation (3)) and the Board will be required to alter the register (new subregulation (4)). Under new subregulation (5), where the registration of the tax agent or nominee is terminated, surrendered or cancelled the Board will be required to alter the register. Any person may inspect, make copies of or take extracts from the register (new subregulation (6)).
Regulation 58M of the Principal Regulations requires every registered tax agent to give notice in writing to the Board of any change of address of the tax agent or any nominee or substituted nominee. Regulation 9 omits the present subregulation 58M(1) and replaces it with new subregulation 58M(1). The new subregulation updates the change of address notification requirements by providing that a registered tax agent notify the secretary of the Board forthwith of any change in the address for the service of the tax agent (paragragh (a)) or of any nominee of the tax agent (paragragh (b)).
Regulations 58P and 58PA of the Principal Regulations deal with the cancellation of the registration of tax agents and appeals in connexion with such cancellations. Regulation 10 repeals both of these regulations to inserts a new regulation 58P. Under new subregulation 58P(1) a Board is required, subject to new subregulation (4), to notify a national newspaper (paragragh (a)) and any relevant local newspaper or newspapers (paragragh (b)) of the cancellation or suspension of the registration of a tax agent. Under new subregulation (2) a Board will be required to notify the Commissioner of any cancellation or suspension (paragragh (c)) as well as surrender (paragragh (b)) or termination (paragragh (a)) of the registration of a tax agent. New subregulation (3) requires the Commissioner to notify any cancellation of a tax agent’s registration in the Gazette upon receipt of advice of the cancellation. Under new subregulation (4), new subregulations (1) and (3) will not apply where the cancellation or suspension of a tax agent’s registration is under review by the AAT or a court (paragragh (b)), or the period under which an application for review of a decision of a Board under section 251QA of the Act has not elapsed (paragragh (a)).
Regulation 58Q of the Principal Regulations requires the Board to notify the Commissioner when a person ceases to be a nominee, additional nominee or substituted nominee of a partnership or company which is a registered tax agent. Regulation 11 repeals regulation 58Q and replaces it with new regulation 58Q which requires the Board to notify the Commissioner where a person ceases to be a nominee of a tax agent.
Regulation 12 amends regulation 58R of the Principal Regulations by substituting the word “Chairperson” for the existing “Chairman” wherever it occurs.