EXPLANATORY STATEMENT
Issued by authority of the Assistant Treasurer
Tax Agent Services Act 2009
Proclamation
Subsection 1-5(1) of the Tax Agent Services Act 2009 (the Act) provides that Parts 2 to 5 of the Act commence on a day to be fixed by Proclamation. However, the Proclamation must not specify a day that occurs before the day on which the Tax Agent Services (Transitional Provisions and Consequential Amendments) Act 2009 receives the Royal Assent.
Additionally, if any of the provisions in Parts 2 to 5 do not commence within nine months beginning on the day on which the Tax Agent Services (Transitional Provisions and Consequential Amendments) Act 2009 (the Transitional Act) receives the Royal Assent, then those provisions commence on the first day after the end of that nine month period. Both the Act and the Transitional Act have received the Royal Assent.
The purpose of the Proclamation is to fix 1 March 2010 as the day on which Parts 2 to 5 of the Act commence. Subsection 1‑5(1) of the Act also provides that section 60‑95 to 70‑20 and sections 70‑50 and 70‑55 of the Act commence at the same time as Parts 2 to 5.
The Act implements the new legislative regime for the provision of tax agent services, which involves the registration of tax agents and BAS agents. All the provisions of the Act, other than Parts 2 to 5, sections 60-95 to 70-20 and sections 70-50 and 70‑55, commenced on 26 March 2009.
Parts 2 to 5 of the Act contain the eligibility requirements and process for registration as a tax agent or BAS agent, the legislative Code of Professional Conduct and the administrative sanctions applicable for failure by an agent to comply with the Code, the grounds and process for terminating an agent’s registration, and the civil penalties applicable for certain conduct.
Sections 60-95 to 70-20 and sections 70-50 to 70-55 relate to investigations conducted by the Tax Practitioners Board (Board) (the Board responsible for the administration of the Act), public reporting obligations of the Board, and other miscellaneous provisions.
Given the extensive transitional provisions available to facilitate the smooth transition to the new tax agent services regime, the commencement date allows time for industry to make appropriate changes. The details of the new tax agent services regime were developed through an extensive consultation process, commencing in 1998, involving a wide variety of stakeholders.
The Proclamation is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
Overview
The Tax Agent Services Act 2009 was enacted to address the need for a comprehensive legislative regime governing the provision of tax agent services in Australia. This Act, proclaimed by the Assistant Treasurer, aims to ensure the integrity and professionalism of tax agents and Business Activity Statement (BAS) agents through registration, a Code of Professional Conduct, and administrative and civil sanctions for non-compliance. Most provisions of the Act came into effect on 26 March 2009, while Parts 2 to 5, along with specific sections pertaining to registration, conduct, and penalties, were scheduled to commence on 1 March 2010. This delayed commencement allows sufficient time for industry stakeholders to adjust to the new regulatory framework, facilitating a smooth transition from the old system. The provisions were developed through extensive consultation with various stakeholders, reflecting a broad consensus on the necessary reforms.
Scope and Application
The Tax Agent Services Act 2009 applies to individuals and entities providing tax agent services and BAS (Business Activity Statement) agent services in Australia. This legislation mandates the registration of tax and BAS agents and establishes a framework for the professional conduct expected from them. It encompasses the eligibility criteria, registration process, a legislative Code of Professional Conduct, administrative sanctions for non-compliance, the grounds and procedures for terminating an agent's registration, and civil penalties for specific misconduct. The Act’s jurisdictional reach is nationwide, affecting all tax and BAS agents across Australia. Certain provisions, specifically sections 60-95 to 70-20, 70-50, and 70-55, which pertain to investigations, public reporting, and other miscellaneous provisions, were set to commence on 1 March 2010 as determined by the Proclamation. The Act allows for extensions or restrictions in its application through subordinate instruments, ensuring flexibility and adaptability in its implementation.
Key Provisions
The Tax Agent Services Act 2009, in particular sections 1-5(1), mandates that Parts 2 to 5 of the Act, along with sections 60-95 to 70-20 and sections 70-50 and 70-55, will commence on a date specified by a Proclamation. This date cannot be earlier than the day on which the Tax Agent Services (Transitional Provisions and Consequential Amendments) Act 2009 receives Royal Assent. If any provisions in Parts 2 to 5 do not commence within nine months from the Royal Assent of the Transitional Act, they will commence on the first day after the end of that period. The Proclamation sets 1 March 2010 as the effective date for these parts and sections. This legislative framework is designed to formalise the registration of tax agents and Business Activity Statement (BAS) agents, establishing a new regime that includes eligibility criteria, professional conduct codes, and sanctions for non-compliance.
The Act imposes several obligations on tax agents and BAS agents. It mandates that individuals seeking to provide tax agent services must meet specific eligibility criteria and complete a registration process (Sections 2 and 3). Registered agents are required to adhere to a legislative Code of Professional Conduct, which outlines ethical and professional standards they must uphold (Section 4). Additionally, the Act mandates that the Tax Practitioners Board, responsible for the administration of the Act, must conduct investigations into potential breaches of the Code and report publicly on their activities (Section 5). The Board also has the authority to terminate an agent's registration if the agent fails to comply with the Act or the Code.
Failure to comply with the provisions of the Tax Agent Services Act 2009 can lead to various consequences. The Act stipulates civil penalties for certain breaches, which may include fines. For instance, providing tax agent services without being registered can result in penalties as outlined in the Act. Additionally, serious breaches of the Code of Professional Conduct can lead to the termination of an agent’s registration. Under Section 6 of the Act, the Tax Practitioners Board has the authority to investigate breaches and impose administrative sanctions. In cases of deliberate or reckless breaches, criminal penalties may also apply, depending on the severity of the misconduct. These provisions ensure that the integrity and reliability of tax agent services are maintained.