Beware – the “BAS Service” Trap

The Tax Agent Services Act 2009 (Act) commenced on 1 March 2010.

This Act requires all tax agents must be registered with the Tax Practitioners Board.

Franchisors who provide franchisees with assistance in relation to their Business Activity Statements, known as a “BAS Service“ may be required to register under the Act.

A “BAS Service” is broadly defined to mean a service that:

• relates to ascertaining or advising an entity regarding liability, obligations or entitlements that could arise under a BAS provision;
• constitutes representing an entity in their dealings with the Commissioner of Taxation in relation to a BAS provision; or
• is provided where the entity can reasonably expect to rely on that service to either satisfy any liabilities or obligations that could arise under a BAS provision or to claim an entitlement that could arise under a BAS provision.

The penalties for providing or advertising a BAS service whilst unregistered range from $27,500 for individuals to $137,500 for corporations. Franchisors should review their franchise agreements, manuals and software to see if they are offering a BAS service and if so, seek further advice on registration.