How To Become A Tax Agent In Australia: A Complete Guide

Students want to know how they can become registered tax agents in Australia.

 

Are you a finance and business-savvy person looking forward to becoming a registered tax agent? If yes, then this article is for you.

 

A Registered Tax Agent is a specialised professional with an in-depth knowledge of tax. He is a qualified, skilled, and responsible professional who follows a stringent code of conduct.

 

In Australia, a tax agent must register with the Tax Practitioners Board to offer paid tax services to its clients. You need to complete courses that equip you with the necessary skills to fulfil the educational qualifications to be a Registered Tax Agent.

 

The following article provides all the necessary information on becoming a tax agent in Australia.

 

 

1. Who Is A Tax Agent?

 

A tax agent is one of the critical mediators in the entire tax system. 

 

He fully understands professional and ethical standards and uses the right tools to provide reliable tax advice to their clients.

 

 

2. What Does A Tax Agent Do?

 

A good tax agent looks after all the client's tax affairs and ensures that his clients pay the correct tax amount at the right time. He also makes their clients aware of their grants and reliefs.

 

A tax agent reassures its customers that their tax affairs are fully compliant. Due to these benefits, many people in Australia prefer to take the services of a tax agent. They prepare the tax either for individuals or companies.

 

 

3. How Does A Tax Agent Differ From A Tax Accountant?

 

A tax agent is licensed and registered with the Tax Practitioners Board, lodging tax returns for individuals and companies. When working with companies, they will analyse the income and expenses, arriving at the correct tax amount payable to the government.

 

A tax accountant is a registered tax professional helping clients form better financial decisions. He suggests the correct business structure, such as a sole trader or incorporation and the right strategy for growth.

 

In addition to tax planning, a tax accountant also works as a business adviser to help clients plan their business requirements efficiently. He makes his clients aware of the consequences of any decision they make in their business.

 

 

4. Skills To Become A Tax Agent

 

There is a specific skill set that employers look for in a tax agent. Let us understand what they are:

 

 

Filing Tax Returns

 

Tax agents are professionals who have specialised tax knowledge. The tax agent must be well-versed in preparing tax returns for their clients and submit them to IRS for finalisation.

 

He should have experience preparing tax returns for individuals, firms, businesses, partnerships, and CPAs with the help of financial statements and client documentation.

 

 

Customer Service

 

A tax agent should assist existing and potential customers by resolving their tax-related issues and offering trusted advice. Good customer service will help strengthen relationships with clients and bring more business in the future.

 

 

Ensure Compliance

 

Another necessary tax agent skill is ensuring that all services comply with state decrees and internal protocols.

 

Personal skills include:

 

  • Clear written and verbal communication

  • Comfortable with numbers

  • Good time management skills

  • Commercial awareness

  • Good problem-solving skills

  • Attention to detail

 

TafeSA offers a tax agent course that meets the Australian Tax Practitioners Board requirements.

 

This online course helps tax agents improve their skills to advance in their careers.

 

 

5. What Are The Regulations For Tax Agents?

 

According to The Tax Agent Services Act 2009, a tax agent can only provide a 'tax agent service' when registered. This service relates to determining or directing an entity regarding its accountabilities, duties, or privileges under a taxation law.

 

A legal practitioner can not formulate or file tax returns except in cases wherein he is the legal personal representative or a trustee of a deceased estate. A legal practitioner must register as a tax agent to provide tax compliance services.

 

Severe civil penalties are applicable when an unregistered entity offers a tax agent service to any client. The maximum penalty for such a violation is $262,500 for a company and $52,500 for individuals.

 

 

6. What Are The Advantages Of Becoming A Registered Tax Agent?

 

When a tax agent registers with the Tax Practitioners Board, he gains the following benefits:

 

  • He gains the qualifications and experience to offer tax agent services

  • He fulfils the 'fit and proper criteria as laid down by the TPB

  • He has adequate professional indemnity insurance coverage for safeguarding his consumers

  • He may not be accountable for a few administrative penalties levied in specific cases

 

 

7. What Is A Tax Agent Services Regime?

 

The tax agent services administration controls the registration of separate categories of tax practitioners. These include tax agents, tax advisers, and BAS agents.

A registered tax agent is a legal entity that provides a tax agent service. 

 

This service comprises advisory and compliance services concerning a taxation law managed by the Commissioner of Taxation.

 

Most registered tax agents offer a combination of advisory, representative, and compliance services to their clients. The Tax Agent Services Act 2009 (TASA) is the legislation that governs tax practitioners in Australia.

 

The act also prescribes the practical work experience, academic qualifications, and requirements for an individual to become a registered tax agent, tax adviser, and BAS agent.

 

 

8. Important Features Of The Tax Agent Services Regime

 

A tax agent services regime comprises the following elements:

 

  • A national Tax Practitioners Board controls the registration of tax agents, tax advisers, and BAS agents.

  • A constituted Code of Professional Conduct administers the personal and professional conduct of tax agents, tax advisers, and BAS agents. If these entities violate the code of conduct, they may be subjected to a broad range of disciplinary sanctions.

  • Unregistered entities are subject to various civil penalties when offering fee-based or reward-based services.

  • A safe harbour is in place to protect taxpayers from administrative penalties on tax shortfall due to the acts of a registered agent.

 

Visit the TPB website to learn more details regarding the functioning of the tax agent services regime.

 

 

9. Who Can Become A Registered Tax Agent?

 

  • Under the TASA, if you are a sole practitioner, a company, or a partnership, you can register to become a tax agent. 

  • Any individual or a company operating as a trustee can register as a tax agent 

  • Association of trustees of public trusts can also register themselves as a tax agent under the regime.

 

 

10. What Are The Eligibility Requirements To Become A Registered Tax Agent?

 

Let us look at the registration requirements of each entity one by one.

 

 

Sole Practitioners

 

  • An individual should be a minimum of 18 years to register with the TPB. 

  • He should have exhibited a good code of conduct, fame, character, and integrity.

  • He is not an undischarged bankrupt.

  • He should not have been charged with a grave taxation offence or dishonesty.

  • He should not have been reprimanded for promoting a tax exploitation scheme

  • He should meet the prescribed academic eligibility requirements and tax agent work experience.

  • He must maintain professional indemnity insurance of between $250000 to 1 million worth.

 

The Tax Agent Program enables an entity to satisfy the above-listed requirements to register as a tax agent. Based on your qualifications, you may require completing a TPB-approved course in Commercial Law or Australian Tax Law.

 

Click here to register as an individual tax agent on the TPB website.

 

 

Partnership

 

A partnership can register as a tax agent if it meets the following conditions:

 

  • Each partner is at least 18 years.

  • Each partner is a fit and proper person as per TPB guidelines.

  • Each company in this partnership must not be convicted of a grave taxation offence or involved in fraud or dishonesty in the past five years. 

  • The partnership comprises an adequate number of registered tax agents who offer reliable services and perform supervisory arrangements.

  • The partnership maintains the required professional indemnity insurance.

 

 

Company

 

A company can apply for registration as a tax agent by following the below conditions:

 

  • The director of the company must be at least 18 years of age.

  • He should be a fit and proper individual.

  • The company must not have been imprisoned or convicted in a case of fraud in the last five years.

  • The company has an adequate number of registered tax agents who can offer industry-standard services and perform supervisory arrangements.

  • The company maintains professional indemnity insurance as per the requirements of TPB.

 

 

Trust

 

A corporate or an individual trustee can register as a tax agent, but the trust can not apply for registration. The eligibility criteria applicable for individual trustees and corporate functioning in the capacity of a trustee are like that of registration requirements of a sole practitioner and companies.

 

 

Partnership Of Open/Unrestricted Trusts

 

The TASA allows open trust partnerships to register as tax agents regardless of whether the trustees are individuals, firms, or a combination of both. Only when an enterprise meets the criteria for registering as a tax agent.

 

Refer to Tax Agent Services Regulations 2009 to know more about the details of the specific requirements regarding the academic credentials and work experience of an applicant. 

 

 

11. Potential Pathways To Become A Registered Tax Agent

 

The Tax Agent Services Regulations 2009 comprises the rules related to the required qualifications and work experience to become a registered tax agent in Australia.

 

In 2021, an entity needed a mix of primary qualifications, TPB-approved courses, and relevant experience.

 

The type of board-approved course and work experience needed depends on your primary qualification.

 

Here is a tax agent pathway review for an individual applicant, partnership, company, trust, and partnership of discretionary trusts.

 

 

With Tertiary Qualifications In Accountancy (201)

 

  • Have an undergraduate accounting degree or a postgraduate award from a tertiary institution in Australia

  • Have completed TPB-approved tax agent courses such as a TPB-approved commercial law course and a TPB-approved taxation law course 

  • Should have a year of full-time pertinent experience in the previous five years

 

 

With A Tertiary Qualifications In Another Discipline (202)

 

  • Have a degree or postgraduate award from a tertiary institution in Australia.

  • It May require completing a TPB-approved course in fundamental accountancy principles, a TPB-approved taxation law course, and a TPB-approved commercial law course.

  • Gained one year of full-time pertinent work experience in the previous five years

 

 

With A Diploma or Higher Award In Accountancy (203)

 

  • Have a diploma in accountancy or a higher award from an accredited training organisation

  • Completed a TPB official taxation law course and a TPB-approved commercial law course

  • Gained two years of pertinent full-time experience in the previous five years

 

 

With A Tertiary Qualification In Law (204)

 

  • Have academic qualifications to be a legal practitioner in Australia 

  • They should have completed an Australian taxation law course and a fundamental accountancy principles course

  • Have gained one year of pertinent full-time experience in the previous five years

 

 

With Work Experience (205)

 

In this category, there is no primary qualification required. However, an applicant must complete TPB-approved courses such as:

 

  • An Australian taxation law course 

  • A fundamental accountancy principles course, and

  • A TPB-approved commercial law course

 

Also, he should have gained eight years of relevant full-time experience in the past ten years.

 

 

With A Membership in A Professional Association (206)

 

  • Be a voting member of a recognised tax agent association 

  • There is no requirement for any of the TPB-approved courses

  • Should have gained eight years of pertinent full-time experience in the previous ten years

 

 

12. How To Apply For Tax Agent Registration?

 

Entities can apply for registration online. You must have documents handy before performing this process.

 

  • Soft copies of qualifications, course outlines, and transcripts.

  • Statement of relevant experience from a current or past employer.

  • The tax agent membership details.

  • Identity documents issued by the Australian government, such as driving license, passport, and Medicare card, to verify your identity.

 

 

13. Frequently Asked Questions (FAQs)

 

 

What Is The Exception For Tax Agents Registered Before 1988?

 

Suppose you registered as a tax agent before 1 November 1988 and 1 March 2010. In that case, you need not fulfil the experience and qualifications requirements for registering as a tax agent.

 

 

What Are The "Conditions of Registration" Concerning Tax Agents?

 

When not meeting all the criteria for registration, a condition is applied. In this case, the tax agent can provide limited services. In other words, his tax services may apply to a specific area of taxation law where he lacks relevant experience and qualifications.

 

Click here to learn more about imposing conditions on a registration.

 

 

How To Confirm That A Tax Agent Is Registered?

 

If you want to check whether a tax agent is registered, you need to click on the below links:

 

 

 

What Does It Mean by 'Relevant Experience'?

 

Relevant experience means hands-on work experience in a business that offers tax agent services. Once you mention the work experience in your application, the supervisor will verify it via a Statement of relevant experience (SRE) form.

 

 

How Much Time Does It Take to Process The Registration Request?

 

Ideally, it takes around thirty days for the application to get processed. The maximum approval period for registration is three years.

 

A candidate should fill out and send an application form for re-registration thirty days after the expiration of the registration period.

 

To prevent the rejection of the application, an applicant should fulfil the registration requirements/ eligibility criteria for registration or re-registration each time.

 

 

How Much Does A Tax Agent Earn In Australia?

 

The average base tax agent salary is $73,691 per year in Australia.

 

 

Why Is It Important For A Tax Agent To Register With The TPB?

 

 

Suppose a tax agent offers paid tax agent services without being registered with the Tax Practitioners Board. In that case, he can incur severe penalties from the Australian Taxation Office.

 

An unregistered tax agent cannot offer anyone a fee or reward-based services. He is also not permitted to represent himself as a registered tax agent and advertises tax agent services.

 

 

14. Conclusion

 

Tax agents play a vital role in offering a good experience for taxpayers. This field is varied and challenging and suits graduates from all disciplines. 

 

If you possess the skills and qualifications making you fit for this role, take a step forward and enrol for registration today.

 

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