Continuing Professional Education Draft Platform Paper for Consultation A. Overview This document sets out the Tax Practitioners Board s (Board) Continuing Professional Education (CPE) policy. The policy is intended provide guidance to tax practitioners in meeting their obligations under the Code of Professional Conduct (Code). Objective All businesses operate in an increasingly globalised setting which is subject to continuous change. The introduction of the Tax Agent Services Act 2009 (TASA) acknowledges this reality which is expressed by the following: The object of the TASA is to ensure that tax agent services 1 are provided to the public in accordance with appropriate standards of professional and ethical conduct. 2 The completion of relevant CPE will assist tax practitioners to ensure that their knowledge and skills are maintained for the benefit of their clients and the broader community; Section 30-10(8) of the TASA, forming part of the Code, requires that all registered agents maintain knowledge and skills relevant to the *tax agent services that you provide ; 3 Section 30-10(10) of the TASA, forming part of the Code, requires that all registered agents take reasonable care to ensure that *taxation laws are applied correctly to the circumstances in relation to which you are providing advice to a client. A tax practitioner is better equipped to exercise reasonable care in applying the taxation laws where they have maintained the knowledge and skills relevant to the tax agent services they provide. Section 30-10(12) of the TASA, forming part of the Code, requires that all registered agents advise your client of the client s rights and obligations under the *taxation laws that are materially related to the *tax agent services you provide. A tax practitioner is better equipped to properly advise a client about the taxation laws relevant to their circumstances when they have maintained the knowledge and skills relevant to the tax agent services they provide. 1 See key terms below. The definition of tax agent services includes BAS agent services. 2 Section 2-5 of the Tax Agent Services Act 2009. 3 Use of a * in the Tax Agent Services Act 2009 indicates that the term is defined in Division 90 of the Act. 1 of 10
One of the pillars of the new legislative regime is a consumer protection imperative. The TASA requires the Board to ensure that tax practitioners are competent and comply with the Code. In this regard the Board has a public protection role; and These provisions reinforce the view that it is essential for tax practitioners to maintain their knowledge and skills. The principles contained in this policy will therefore assist tax practitioners to meet their obligations under the legislative provisions described above. Legislative background The TASA envisages that the Board may develop a CPE policy to provide guidance for the purpose of satisfying the principles of the Code. All tax practitioners are required to comply with section 30-10, of the TASA. Section 30-10 of the TASA relevantly requires that: (8) You must maintain knowledge and skills relevant to the *tax agent services that you provide. (10) You must take reasonable care to ensure that *taxation laws are applied correctly to the circumstances in relation to which you are providing advice to a client. (12) You must advise your client of the client s rights and obligations under the *taxation laws that are materially related to the *tax agent services you provide. The Explanatory Memorandum to the Tax Agent Services Bill 2008, anticipates that to fulfil this obligation, tax practitioners will be required to complete CPE. Keeping up-to-date with developments in the relevant taxation laws and tax administration may require agents to undergo a certain minimum number of hours of tax related continuing professional education per year as determined by the Board. 3.46 The Board may issue a guideline listing the training that is available in the market (including face-to-face training courses, distance learning and online courses) as being sufficient for continuing professional education purposes for this principle of the Code. For this purpose, any person or organisation can make a recommendation to the Board to have their training courses listed. The courses are not restricted only to those offered by recognised professional associations, recognised BAS agent associations, tax agents or BAS agents. 4 [Emphasis added] 4 Paragraphs 3.45 and 3.46 of the Explanatory Memorandum to the Tax Agent Services Bill 2008. 2 of 10
B. CPE Principles The legislative principles and provisions described above recognise that tax practitioners should undertake continuous relevant CPE to maintain their knowledge and skills and to competently provide tax agent services to the Australian community. CPE refreshes and updates the core body of knowledge essential to the services provided by each tax practitioner. CPE builds upon and maintains the relevance of a tax practitioner s educational background. The following principles underpin the Board s CPE policy: 1. CPE contributes to the maintenance of contemporary and relevant knowledge and skills required of tax practitioners to comply with the Code. 5 2. Tax practitioners provide a broad spectrum of tax agent services. The following categories of tax practitioners generally reflect the different scope of services provided by agents registered under the TASA: Tax Agents; BAS Agents; Conditional or Specialist registrants. 6 3. The Courts have previously indicated in a number of cases that continued registration requires that tax practitioners be competent. The maintenance of competence by a tax agent or BAS agent requires continuing awareness, understanding and up-to-date knowledge of relevant technical, legal and business developments. A tax practitioner who has maintained their knowledge and skills is better equipped to advise their clients and apply the taxation laws to individual circumstances. 7 In Stasos v Tax Agents Board [1990] FCA 379 Hill J stated at 49 once registered, however, the tax agent must keep up to date with the massive changes to the income tax law, no easy task in the present time, so that he can properly advise and represent 5 Section 30-5 of the Tax Agent Services Act 2009, provides that the Code applies to all registered tax and BAS agents. If, following an investigation under Subdivision 60-E, the Board is satisfied that an agent has failed to comply with the Code, it may impose one or more administrative sanctions under section 30-15. Sanctions the Board can impose include a written caution, a period of suspension or termination of the agent s registration. The severity of a sanction will depend on the Board s consideration of the nature and extent of the breach and the circumstances of each case. The Board has issued an Explanatory Paper in relation to the Code of Professional Conduct. For further information please visit the Board s website at www.tpb.gov.au. 6 See key terms below. 7 As required by sections 30-10(8), 30-10(10) and 30-10(12) of the Tax Agent Services Act 2009. 3 of 10
his clients That is a responsibility which comes with the privileged position in which he is placed.. 8 4. The Board acknowledges the CPE currently required to be undertaken by members of most recognised tax and BAS agent associations. The Board also notes that the Tax Agent Services Regulations 2009 (TASR) specifies the following requirements: Item 103(a) of Part 1 of Schedule 1 of the TASR requires that a recognised BAS agent association has professional and ethical standards including terms to the effect that: o voting members of a recognised BAS agent association undertake at least 15 hours of continuing professional education each year Item 203(a) of Part 2 of Schedule 1 of the TASR requires that a recognised tax agent association has professional and ethical standards including terms to the effect that: o voting members must undertake an appropriate number of hours of continuing professional education each year, having regard to the circumstances and requirements of the members 5. The Board acknowledges that the current market for CPE relevant and designed to meet the needs of BAS agents is not yet mature and comprehensive. Further, the Board recognises that it may take some time for a comprehensive suite of CPE activities relevant to meet the needs of BAS agents, to develop. To ensure a smooth transition for the adoption of CPE by BAS agents, the Board proposes in the first instance to maintain that the minimum level of relevant CPE that should be undertaken by BAS agents to be 45 hours over a triennium 9 ; 6. Recognising the wide scope of services provided by tax agents and the maturity of the CPE activities available to this category of tax practitioner, the Board proposes to require that tax agents undertake a minimum of 60 90 hours of relevant CPE over a triennium. 7. Under the TASA an agent may be registered as a Conditional registrant and/or Specialist registrant. The Board recognises that these categories of tax practitioner may not provide tax agent services on a full time basis or may not provide a broad range of tax agent services. The Board s preliminary view, subject to consultation, is to require that these categories of tax practitioner complete a minimum of 45 hours of relevant CPE over a triennium. What does this mean for tax and BAS agents? The development of this CPE policy will provide guidance of what the Board considers to be best practice in relation to CPE. Tax practitioners unfamiliar with professional regulation will benefit most from this guidance. The Board also anticipates that this policy will instigate and drive the future Comment [ML1]: The Board CPE for BAS agents. Comment [ML2]: The Board CPE for tax agents. Comment [ML3]: The Board CPE for Conditional and Specialist Registrants, particularly relating to Quantity Surveyors and Research & Development practitioners. 8 See further Comino v Tax Agents Board of NSW [2009] AATA 766 at 34 and Re Su and Tax Agents Board of South Australia 82 ATC 4284. 9 See key terms below. 4 of 10
development of CPE activities by various associations and organisations for the tax practitioner profession. What does this mean for consumers? The development of this CPE policy will assist in raising standards within the tax practitioner profession and promote consumer protection. When engaging the services of a tax or BAS agent, the Board encourages the public to ask whether the agent is registered with the Board and how they maintain their knowledge and skills. C. Policy and Examples CPE for Tax Agents Registered tax agents should complete a minimum of 60 90 hours of relevant CPE over a triennium The Board recognises that for various reasons the amount of CPE completed by a tax agent in a given year may vary. To allow flexibility for these situations tax agents are able to complete their CPE over a triennium. This means that a tax agent must ensure that at the end of their CPE triennium a minimum of 60-90 hours of CPE has been completed. The Board considers that not less than 6-10 hours of relevant CPE should be completed in any given year of the triennium. An agent s CPE triennium will begin on the date the tax agent is registered and ends on the date on which they are required to renew their registration. If a tax agent is already registered they should complete CPE pro-rata from 1 March 2013 to the date on which they are required to renew their registration. Comment [ML4]: The Board CPE for tax agents. The Board s initial research indicates that 60-90 hours over a triennium may be appropriate. Comment [ML5]: The Board CPE that tax agents, should complete in a given year. In 2010, John only completes 10 hours of CPE due to parenting leave in the first half of the year. To account for his deficiency in CPE hours, John completes 40 hours of CPE in 2011 and 30 hours of CPE in 2012. As John has completed 80 hours of CPE over his CPE triennium, the Board considers that he has completed the minimum level of CPE. CPE for BAS Agents Registered BAS agents should complete a minimum of 45 hours of relevant CPE over a triennium. The Board recognises that for various reasons the amount of CPE completed by a BAS agent in a given year may vary. To allow flexibility for these situations BAS agents are able to complete their CPE over a triennium. This means that a BAS agent must ensure that at the end of their CPE triennium a minimum of 45 hours of CPE has been completed. The Board considers that not less than 5 hours of relevant CPE should be completed in any given year of a triennium. Comment [ML6]: The Board CPE for BAS agents. Comment [ML7]: The Board CPE that BAS agents, should complete in a given year. 5 of 10
An agent s CPE triennium will begin on the date the BAS agent is registered and ends on the date on which they are required to renew their registration. If a BAS agent is already registered they should complete CPE pro-rata from 1 March 2013 to the date on which they are required to renew their registration CPE for Conditional or Specialist Registrants A conditional or specialist registrant 10 should complete a minimum of 45 hours of relevant CPE over a triennium. The Board recognises that for various reasons the amount of CPE completed by a conditional or specialist registrant in a given year may vary. To allow flexibility for these situations conditional or specialist registrants are able to complete their CPE over a triennium. This means that a conditional or specialist registrant must ensure that at the end of their CPE triennium a minimum of 45 hours of CPE has been completed. The Board considers that not less than 5 hours of relevant CPE should be completed in any given year of a triennium. An agent s CPE triennium will begin on the date the conditional or specialist registrant is registered and ends on the date on which they are required to renew their registration. If a conditional or specialist registrant is already registered they should complete CPE pro-rata from 1 March 2013 to the date on which they are required to renew their registration Comment [ML8]: As per paragraph 7 above. The Board CPE for Conditional and Specialist Registrants. Comment [ML9]: The Board CPE that conditional / specialist registrants, should complete in a given year. The type of CPE required of conditional or specialist registrants must be relevant to the tax agent services provided by that agent. John is a quantity surveyor who registers under the TASA as a conditional registrant. John may only provide tax agent services that relate to Part 2-10 of the Income Tax Assessment Act 1997 concerning capital allowances and the rules about deductibility of capital expenditure. John should complete 45 hours of CPE over his CPE triennium relevant to the type of tax agent services he provides. John is not required to complete CPE in relation to other types of tax agent services which he does not provide. What is relevant CPE? The Board considers relevant CPE to be the maintenance of contemporary and relevant knowledge and skills. CPE undertaken by tax practitioners should be relevant to the tax agent services they provide and the development of their personal knowledge and skills. CPE activities should be provided by persons or organisations with suitable qualifications and/or practical experience in the subject area covered. Tax practitioners should exercise their professional judgment in selecting suitable CPE activities to be undertaken each year. CPE Activities Examples of CPE activities include: 10 See key terms below. 6 of 10
seminars, workshops, courses and lectures; conferences and discussion groups (including by telephone or video conference); tertiary courses provided by educational institutions (including distance learning); other educational activities, provided by an appropriate organisation; research and writing by the tax practitioner of technical publications; computer/internet-assisted courses, audiotape or videotape packages; attendance at in-house training on tax related subjects run by education providers; and attendance at appropriate Australian Taxation Office seminars and presentations. The Board expects that not more than 10 percent of CPE should be undertaken through technical or professional reading. The provision of a tax agent service will not, of itself constitute CPE activity. Recognition of other CPE The Board acknowledges the CPE requirements imposed on voting members of recognised tax and BAS agent associations. 11 Where a tax practitioner is a voting member of a recognised tax or BAS agent association, the Board will accept the practitioner s compliance with their association s CPE requirements, subject to the following: Comment [ML10]: The Board seeks feedback on whether this is an appropriate limit to place on technical or professional reading and whether the Board should further restrict unstructured CPE activities. the CPE activities undertaken must be relevant to the tax agent services provided; the CPE activities undertaken must be provided by persons or organisations with suitable qualifications and/or practical experience in the subject area; and the CPE undertaken meets the minimum level of CPE as specified in principles 5, 6 and 7 above. John is a member of Tax World a recognised tax agent association. As a voting member of Tax World, John is required to complete 120 hours of CPE over a triennium. John s practice primarily deals with individual and simple partnership and company income tax matters. In 2010, John attends a CPE seminar provided by Tax World in relation to its potential merger with an international accounting association. As this seminar is not relevant to the tax agent services provided by John, the seminar would not be considered to be relevant CPE by the Board. The Board recognises that voting members of a recognised tax and BAS agent association may have a different CPE period as compared to the triennium period for the purposes of this document. At the end of their CPE triennium, these tax practitioners should be able to demonstrate that they compiled with their previous CPE obligations with the recognised association and are in the process of complying with their current CPE obligations. Recording CPE Activities 11 See key terms below. 7 of 10
The Board considers that an important aspect of maintaining knowledge and skills involves recording and reflecting on CPE completed. Effective record keeping allows a tax practitioner to ensure that an appropriate amount and type of CPE is undertaken in relation to the areas in which a tax or BAS agent practices. Tax practitioners should maintain a record and evidence of their engagement in CPE activities. To assist tax practitioners, the Board will develop and make available an appropriate CPE log. The Board does not expect that a tax practitioner who maintains a CPE log to satisfy the voting membership requirements of a recognised tax or BAS agent association to keep an additional record. Ideally records should be kept for a period of three years from the date the agent s CPE triennium ends. The Board expects that from time to time it may request evidence of CPE completed by tax practitioners within a relevant period. 12 John attends a seminar provided by BAS World, a recognised BAS agent association in relation to changes to fuel tax credits. John records the particulars of the course (name, date and time) and course provider on his electronic CPE log. As John receives a brochure of the seminar and email confirmation of his enrolment, he keeps these records as evidence of CPE completed. The Board considers that John has taken the appropriate steps to record his CPE. Concessions The Board acknowledges that there may be extenuating circumstances where a tax practitioner is unable to complete the minimum level of CPE. Tax practitioners should exercise their professional judgment in this regard. Examples of situations where it might not be possible for a tax practitioner to complete the minimum level of CPE include: illness and / or disability; and financial or other hardship. John is a BAS agent running a sole practice in the Brisbane suburbs. In early 2009, John is involved in a car accident and sustains serious injury. John is unable to work for six months. The Board does not expect John to complete the minimum level of CPE that year. The Board notes that while the minimum amount of CPE may not, in certain circumstances be met, tax practitioners should be mindful that their obligation under the Code to maintain knowledge and skills 12 The Board acknowledges that a tax practitioner may be audited by a tax or BAS agent association of which they are a member. The Board notes that it may consider the outcome of such an audit as evidence of CPE completed. 8 of 10
relevant to the tax agent services provided can not be abrogated. Tax practitioners should be mindful of the prescribed experience requirements for renewal of registration. John is a tax agent residing in Coober Pedy, South Australia. He provides tax agent services predominantly to individuals who work in opal mines. John rarely has time to travel to Adelaide to attend face-to-face training and only makes a modest income. John is however careful to maintain his knowledge and skills by undertaking online learning packages and participating in online discussion groups as well a monitoring updates on the Australian Taxation Office website and undertaking technical reading. Compliance with the Code of Professional Conduct Completion of at least the minimum level of relevant CPE outlined above, will be considered by the Board as one of the factors which would evidence compliance with section 30-10 of the TASA, that is the Code of Professional Conduct. For further information in relation to compliance with the Code, please visit the Board s website at www.tpb.gov.au. D. Key Terms BAS service This term has the meaning given to it in section 90-10 of the Tax Agent Services Act 2009. A BAS service is a tax agent service, see below. Comment [ML11]: The Board seeks feedback on whether there are any other terms used throughout the paper which require some explanation or definition. Code of Professional Conduct (Code) Conditional registrant The Code is contained in section 30-10 of the Tax Agent Services Act 2009. It sets out standards of professional and ethical conduct with which tax practitioners must comply. This term refers to a registered tax agent or BAS agent who has a condition imposed on their registration under section 20-25(5) of the Tax Agent Services Act 2009. The condition will relate to the subject area in which the agent provides tax agent services. See also Specialist registrant. CPE Continuing Professional Education Recognised BAS agent Association A recognised BAS agent association is an organisation that applies to the Board for recognition and the Board decides to recognise the association in accordance with Division 1 of Part 1A of the Tax Agent Services Regulations 2009. 9 of 10
Recognised Tax agent Association A recognised tax agent association is an organisation that applies to the Board for recognition and the Board decides to recognise the association in accordance with Division 2 of Part 1A of the Tax Agent Services Regulations 2009. Specialist registrant This term refers to a tax agent registered under the Tax Agent Services Act 2009 who meets the requirements in item 202 of Part 2 of Schedule 2 to the Tax Agent Services Regulations 2009. See also Conditional registrant. Tax agent service This term has the meaning given to it in section 90-5 of the Tax Agent Services Act 2009. The definition of tax agent service includes BAS agent services. Tax practitioner This term refers to both tax agents and BAS agents registered under the Tax Agent Services Act 2009. Triennium A triennium for the purposes of this document is generally three years. For new tax practitioners your CPE triennium will commence according to your registration date. The end of your CPE triennium will be the date on which you are required to renew your registration. 10 of 10