Termination of Tax (financial) Adviser registrations - August 2020

Overview

The Tax Agent Services Act 2009 (TASA) was enacted to address issues and gaps in the regulation of tax agents and financial advisers in Australia. This Act provides a framework for the registration, conduct, and professional standards of tax practitioners, ensuring that they meet certain competency and ethical requirements to protect the public. The Act was passed by the Parliament of Australia and its primary policy objective is to safeguard the interests of taxpayers by ensuring that tax practitioners provide competent and ethical services. The Tax Practitioners Board, established under this Act, is responsible for overseeing the registration and conduct of tax agents and financial advisers, including the ability to terminate registrations when necessary.

Scope and Application

The Tax Agent Services Act 2009 (TASA) applies to individuals and entities that provide tax (financial) advisory services in Australia. This includes registered tax (financial) advisers, BAS agents, tax (financial) adviser businesses, and tax practitioners who provide tax services. The Act applies nationally across Australia, ensuring a consistent regulatory framework for tax practitioners throughout the Commonwealth. The scope of the Act encompasses various aspects of the conduct and transactions of tax practitioners, focusing on maintaining professional standards, ensuring competence, and protecting the interests of clients. The Act provides for the registration, education, and conduct requirements for tax practitioners, with specific provisions for the termination of registration under subdivisions 40-A and 30-B, as evidenced by the recent terminations of several tax agents. The Act does not specify explicit exclusions but rather focuses on setting standards and requirements that practitioners must meet. The application and enforcement of the Act may be extended or refined through subordinate instruments, such as regulations or guidelines issued by the Tax Practitioners Board.

Key Provisions

The Gazette C2020G00961, under the Tax Agent Services Act 2009 (TASA), outlines the termination of tax agent registrations by the Tax Practitioners Board (TPB). Under the Act, the TPB has terminated the registration of numerous tax agents, primarily due to reasons such as the cessation of business operations, voluntary surrender of registration, or failure to meet ongoing registration requirements (sections 40-45, 40-50, 40-55). These terminations are effective from 11/08/2020, except for one case effective from 25/08/2020. The primary grounds for termination include voluntary surrender by the agents, cessation of the entity’s existence, or non-compliance with registration standards. Tax agents and entities governed by the Act are required to maintain their registrations by fulfilling specific criteria, such as meeting continuing professional development requirements, adhering to ethical standards, and complying with legislative obligations (sections 40-25, 40-30, 40-35). Failure to meet these criteria can result in the termination of their registration, which prohibits them from providing tax agent services unless they reapply and meet all necessary requirements. This obligation underscores the necessity for tax agents to stay informed about their regulatory responsibilities and maintain compliance. Breach of the provisions under the Tax Agent Services Act 2009 (TASA) can lead to severe consequences. For instance, unauthorised practice after the termination of registration can result in both civil and criminal penalties. Civil penalties may include fines up to $21,000 for individuals and $105,000 for bodies corporate, with additional fines for each day the contravention continues (section 155). Criminal penalties may involve imprisonment for up to two years for individuals and higher fines for corporate bodies, reflecting the seriousness of non-compliance with registration requirements (section 156). These penalties serve as deterrents to ensure adherence to regulatory standards and protect the integrity of the tax system.