Summary of tax agent framework and self assessment
Under Australian law, anyone who charges a fee for providing taxation advice, or assists with preparation or lodgement of tax returns, must be registered as a tax agent with the Tax Practitioners Board. Deloitte is registered.
As a registered tax agent we are bound by a statutory Code of Professional Conduct (Code of Conduct). The stated purpose of the Code of Conduct is “to establish clearly the professional and ethical standards required of tax agents”.
The ethical and professional standards under the Code of Conduct include duties to:
- Act honestly and with integrity
- Act lawfully in the best interests of clients
- Ensure our services are provided competently
- Comply with taxation laws in the conduct of our personal affairs
- Establish adequate arrangements for managing any conflict of interest that may arise in relation to the services provided
- Disclose client confidential information to a third party only with the client’s permission
- Advise clients of their rights and obligations relevant to the services provided
- Not to obstruct the proper administration of the taxation laws.
As a registered tax agent, we are committed to complying at all times with the principles in the Code of Conduct.
More information about the Code of Conduct can be obtained from the Tax Practitioners Board’s website at www.tpb.gov.au
Australia’s taxation system is largely based on the principle of self assessment. Preparation and lodgement of an income tax return are key parts of the self assessment system.
Tax return preparation requires taxpayers to provide information about their income, deductions and any tax offsets to which they may be entitled, so that the tax laws are properly applied to their affairs.
Responsibility for the accuracy and completeness of information, required to comply with taxation laws, rests with the taxpayer.
Taxpayers are obliged to keep records, generally for five years from the date of the transaction, and to provide information to the ATO when requested. Failure to keep certain records can lead to adverse outcomes, such as denial of deductions for expenses or loss of entitlement to other relief.
While the ATO generally accepts tax returns at face value, under the self assessment system returns are subject to review, including audit and verification checks.
The ATO can amend assessments to correct calculation errors, mistakes of fact or law, within two years or four years following assessment, depending on the complexity of your affairs. In some circumstances the period can be longer. Taxpayers dissatisfied with amended assessments of tax and penalties have the right to object and if dissatisfied with the ATO’s review, to appeal.
To limit the risk and uncertainty associated with self assessment, taxpayers can request a private ruling to obtain formal advice from the ATO about how the taxation law applies to a transaction.
There are statutory safe harbours that may protect taxpayers from administrative penalties for false or misleading tax returns and statements given to the ATO, as well as late lodged tax returns and statements, where the taxpayer has given their tax agent all relevant information but the agent has not exercised reasonable care.