• Safe harbour

    The safe harbour provisions aim to ensure that services provided to the public by you are of an appropriate ethical and professional standard.

    Under the safe harbour provisions, a client will not be liable to certain administrative penalties if they provide all the relevant tax information to you, and you:

    • do not take reasonable care and make a false or misleading statement that results in a shortfall amount
    • take reasonable care or lack reasonable care and fail to lodge a document by the due date.

    The safe harbour provisions can only apply to a:

    • false or misleading statement penalty, when the statement is made on or after 1 March 2010
    • failure to lodge on time (FTL) penalty, when the document has a due date for lodgment of 1 March 2010 or later.

    Safe harbour does not apply where the penalty arises from recklessness or intentional disregard of the tax law by you, nor does it apply to other administrative penalties, including when tax avoidance schemes are involved.

    When safe harbour is granted, we may refer the matter to the Tax Practitioners Board to consider whether there has been a breach of the Code of Professional Conduct under the Tax Agent Services Act 2009.

    See also:

    Eligibility for safe harbour from FTL penalty

    If you lodge a client's return, notice, statement or other document late, they are not liable for an administrative penalty for the late lodgment if both of the following apply:

    • They can show they provided you with all relevant tax information to enable you to lodge their return, notice, statement or other document by the due date.
    • Failing to lodge the return, notice, statement or other document with us did not result from your intentional disregard or recklessness as to the operation of a tax law.

    'All relevant tax information' means all the relevant information to enable you to prepare and lodge the document on time in the approved form. This also means your clients must meet deadlines you specify as their registered agent to provide all the relevant tax information. Relevant tax information also includes a signed document where applicable.

    The taxpayer carries the burden of proof to establish that they provided all relevant information as required.

    See also:

    Making a request

    If your client requests safe harbour

    If we apply a FTL penalty, your client can ask for an exemption from the penalty under the safe harbour provisions.

    They will have to prove to us that they provided all relevant tax information to you so you could lodge the return, notice, statement or other document with us by the due date. When we assess a safe harbour exemption request, we will contact you for your comment on the claim that the document was lodged late due to your actions.

    If you request safe harbour on behalf of your client

    As a registered agent, you may request safe harbour on behalf of a client.

    If you admit your client provided all their information to you in enough time for you to lodge the document by the due date, we will accept your admission as proof that your client did so. You will also have to explain why you lodged the document late, so we can decide whether or not the safe harbour request will be allowed.

    If your client is refused safe harbour

    Neither you nor your clients can object to our decision about whether or not to apply safe harbour.

    If you are dissatisfied with our decision not to apply the safe harbour, you can seek a review of our decision under the Administrative Decisions (Judicial Review) Act 1977.

    However, your clients can still seek a remission of penalty regardless of the safe harbour provisions - we will consider if a FTL penalty remission is appropriate in the circumstances.

    Disputes between you and your client over FTL penalty safe harbour

    Your client must prove they provided you with all the relevant tax information in enough time for you to lodge their document by the due date. If you dispute your client's claims and they cannot provide enough proof, we will not apply the safe harbour.

    If one of your former or current clients requests an exemption from FTL penalty, we will notify you and give you the opportunity to comment on their claims.

    Lodging your request

    To help you lodge your safe harbour requests quickly and easily:

    • use the Tax Agent Portal (tax agents only) – select Mail and the topic Cancellation of FTL penalty (Safe harbour)
    • phone us on 13 72 86 Fast Key Code 1 2 2 between 8.00am and 6.00pm, Monday to Friday
    • post your request to

      Operations – Debt and Lodgment Correspondence
      PO Box 327
      ALBURY  NSW  2640

    See also:

    Last modified: 30 Jun 2017QC 34570