In summary, there are certain events which ((if they occurred in the past 5 years) will make an entity a disqualified entity, except if that entity is currently a registered tax practitioner or a qualified tax relevant provider. Refer 'Events that will disqualify an entity' for details.

We have issued guidance on what we consider to be reasonable steps and enquiries for a tax practitioner to make, to ensure they do not employ or use a disqualified entity to provide tax agent services on their behalf without our approval. For further details, please refer to Tables 2 and 3 in our Information sheet.

Administrative services include services that are only peripheral to tax agent services and are generally provided to assist a registered tax practitioner. For example, administrative support staff who are only responsible for the administrative management of client files and data. However, you should also consider whether the relevant person (or entity) is providing a service on your behalf that is required to be under your supervision and control - Code item 15 applies if the person/entity is providing a tax agent service on behalf of the tax practitioner. For guidance on whether a tax agent service is provided on your behalf, refer to our Information sheet at Steps 1 to 3 under the heading, 'When is an entity employed or used to provide tax agent services on your behalf'.  

An entity (including an individual) will be a disqualified entity if a disqualifying event has occurred within the last 5 years, except if that entity is currently a registered tax practitioner or a qualified tax relevant provider. Refer to 'Events that will disqualify an entity' for details on what are disqualifying events.

For current employees (or any other entities) you use to provide tax agent services on your behalf, we consider reasonable steps and enquiries include having a written contract in place (i.e. an employment agreement) that requires the person/entity to notify you as soon as practicable if a disqualifying event occurs, and requires that the person/entity not provide tax agent services on your behalf if they are a disqualified entity, without TPB approval.

If considering your rights and obligations under contract and employment law, we strongly recommend you seek independent legal advice.

Code item 15 requires tax practitioners to obtain our approval before a disqualified entity can provide tax agent services on their behalf, regardless of the level of supervision in place. The level of supervision would be a factor for us to consider in deciding whether to approve the engagement and this supervision should be detailed in the application for approval.

Login to My Profile to access our approved form and provide relevant information to support your application, including:

• the reasons why the entity is a disqualified entity
• the circumstances that led to the disqualified entity event
• the role the entity would perform in your practice
• the reasons why the entity will be able to perform the role to an appropriate standard of professional and ethical conduct; and 
• any other relevant considerations.

You must also obtain written consent to apply from the disqualified entity, before applying to us for approval, and provide this with your application. Written consent can be obtained by the disqualified entity completing the Disqualifying events declaration and consent form.

Tax practitioners can seek our approval to employ or use a disqualified entity to provide tax agent services on their behalf. We will consider the appropriateness of the engagement, including the reasons why the entity is a disqualified entity, the role they would be performing, and level of supervision and control in place, when considering an application we receive.

Code item 15 requires tax practitioners to obtain our approval before a disqualified entity provides tax agent services on their behalf. A disqualified entity could be an employee, associate, contractor, or any other entity that you use to provide tax agent services on your behalf. We consider that an entity providing a tax agent service on your behalf is any entity required to be under your supervision and control to comply with Code item 7 of the Code of Professional Conduct (Code).

Code item 16 only applies to particular types of arrangements. For further information on what type of arrangements are covered by Code item 16, please refer to our Information sheet under the heading 'Tax agent services provided in connection with an arrangement'.

Code item 15 applies to any entity and/or individual who provides tax agent services on the tax practitioner's behalf. In short, we consider that this includes any entities or individuals who are required to be under the tax practitioner's supervision and control. For steps on how to determine who is required to be under your supervision and control, refer to Steps 1 to 3 in our Information sheet under, 'When is an entity employed or used to provide tax agent services on your behalf'.

Code item 16 only applies to particular types of arrangements which are detailed in our Information sheet, under the heading 'Tax agent services provided in connection with an arrangement'. In particular, Code item 16 is intended to prevent arrangements where the disqualified entity is operating ‘through’ the tax practitioner, such as where a disqualified entity provides tax agent services (while unregistered) using the tax practitioner’s credentials.

Code item 15 only applies where the disqualified entity is providing tax agent services on your behalf. A scenario where a disqualified entity is providing you advice or information, for the purpose of taking over services of new clients, would not be a scenario where the entity is providing a tax agent service on your behalf. However, in considering the advice or information you receive, you must also consider your other obligations under the Code to ensure that tax agent services you provide are provided competently.

You must take reasonable steps and make reasonable enquiries to determine if an entity is a disqualified entity. The first step is to check whether the entity is registered on our public Register as a registered tax agent or BAS agent, or registered on the Financial Advisers Register as a qualified tax relevant provider. If they are, that entity is not a disqualified entity at that time. If they are not registered, we consider that, at a minimum, reasonable steps and enquiries will include each of the following requirements outlined in Table 2 of our guidance.

Code item 15 requires a tax practitioner to obtain our approval for a disqualified entity to provide tax agent services on their behalf. A tax agent employed by an undischarged bankrupt, or an entity under administration, would generally not be using that entity to provide a tax agent service on their behalf, so TPB approval would not be required before commencing the engagement. Code item 16 is only intended to apply to particular types of arrangements which are detailed in our Information sheet, under the heading 'Tax agent services provided in connection with an arrangement'.

Our guidance (in Tables 2 and 3) sets out the minimum reasonable steps and enquiries we expect you to make in determining whether an entity is a disqualified entity. This includes requiring tax practitioners to conduct a search of our Register to see if any TPB-related disqualifying events (i.e. sanctions and terminations) have occurred in the past 5 years. However, our minimum requirements do not require tax practitioners to conduct searches of other registers, such as the Australian Financial Services Authority (AFSA) Bankruptcy Register, to identify if someone was previously bankrupt. Tax practitioners may choose to take steps and make enquiries in addition to our minimum requirements.