The Tax Practitioners Board (TPB) has released draft information as an exposure draft to proposed changes in legislation that would require some software providers and labour hire firms to be registered with the TPB.
Software Providers
A draft information sheet has been prepared by the Tax Practitioners Board (TPB) to assist software providers who provide tax related software systems to understand the operation and impact of the tax agent services regime.
The following are examples of services that may be provided by a software provider, which the TPB considers would most likely be covered by the definition of a tax agent service (including a BAS service) and therefore would require the provider to be registered.
- A client outsources their entire payroll and accounts work to a software provider.
The software provider not only sells the software, but provides an outsourced payroll/accounts processing service using that software. In the provision of this service they interpret and apply a taxation law, which includes a BAS provision, and/or represent the client in their dealings with the Commissioner and it would be reasonable to expect that their client will rely on those services.
- A software provider configures and customises a software system to deliver a specific tax outcome for their client.
The service is provided in circumstances where the client can reasonably be expected to rely on the service for the purposes of satisfying liabilities or obligations or to claim entitlements of the client that arise, or could arise, under a taxation law or BAS provision.
- A software provider offers a help desk which provides customised advice to assist their client to meet a specific tax outcome.
For advice to constitute a tax agent service, the advice would need to relate to the client’s particular circumstances and would require the interpretation of taxation laws or BAS provisions. It must also be reasonable for the client to rely on the advice. If these conditions are met, such advice will be a tax agent service.
- A software provider offers written tax related advice to their client that is specific to the client’s circumstances.
For the written advice to constitute a tax agent service, the advice would need to relate to the client’s particular circumstances and would require the interpretation of taxation laws or a BAS provision. It must also be reasonable to expect the client to rely on the advice.
Labour Hire Firms
For the purpose of the exposure draft, the term ‘labour hire firms’ takes a broad interpretation and includes firms that supply workers to another business or arrange workers to perform work or services directly for clients.
If a labour hire firm is involved in placing a candidate with a client to provide tax agent services, and the labour hire firm is responsible for the remuneration of the candidate and also for ensuring that the client is satisfied with the services provided by the candidate, then the labour hire firm will most likely need to register with the TPB. In this case, the labour hire firm is considered to be providing a tax agent service rather than merely providing a person.
The following table contains examples of circumstances involving labour hire firms where they would need to register with the TPB.
[table style=”2″]
| Particulars | Consideration to labour hire firm | Who is responsible for the employment of the candidate? | Who is responsible for the services provided by the candidate? | Who needs to be registered |
| Client engages labour hire firm to provide a service(temporary placement – labour hire firm engages candidate)Labour hire firm is providing a service not a person | Client pays labour hire firm a fee for providing the candidate. This could include a set fee or hourly charge. | Labour hire firm is responsible for the remuneration of the candidate. | Labour hire firm is responsible for ensuring that the client is satisfied with the services provided by the candidate. | Labour hire firm.However, this will require an examination of the contracts and arrangements between the labour hire firm, candidate and client to determine if any other party is required to be registered. |
| Client engages labour hire firm to provide one of the its employees/contractors for a set period of time (e.g. three months)(contract services)Labour hire firm is providing a service not a person | Client pays labour hire firm a fee for providing the candidate (margin of the cost of employment). | Labour hire firm is fully responsible for employment of the candidate, including remuneration. | Labour hire firm is responsible for ensuring that the client is satisfied with the services provided by the candidate. | Labour hire firm.However, this will require an examination of the contracts and arrangements between the labour hire firm, candidate and client to determine if any other party is required to be registered. |
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Further information regarding these exposure drafts can be found on the TPB website.
Source:
Exposure draft, TPB Information Sheet, TPB(I) D27/2015, Software providers and the Tax Agent Services Act 2009
Exposure draft, TPB Information Sheet, TPB(I) D28/2015