The following is from the ATO:
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Client declarations – frequently asked questions and examples
Answers to frequently asked questions
When my client provides me with a declaration by email do they need to attach a copy of the activity statement or tax return when they provide that declaration?
No, it is not necessary to attach the activity statement or tax return to the email providing the declaration.
Your client can choose to attach the activity statement or tax return as that would provide irrefutable evidence as to the information that the taxpayer has declared as being true and correct. However the law does not require this.
When using email to send the declaration, when possible remove any identifying information from the activity statement or tax return to ensure that any sensitive information is not accidentally disclosed if the e-mail is received by a person not authorised.
End of attentionCan my client provide a bulk declaration to say that I am able to lodge all their activity statements and tax returns on their behalf rather than provide a declaration each time?
No, your client is required by law to provide a declaration each time an activity statement or tax return is lodged.
Can the declaration be retained electronically?
Yes the declaration can be retained electronically. Your client should keep a copy of the declaration for up to five years.
How does my client sign an electronic declaration?
If your client chooses to send their declaration by email, they do not need to include their scanned signature at the end of the email. The action of sending the email and the agent accepting the information and then using that as a basis for lodging the approved form would be sufficient to satisfy the electronic signature provisions set out in section 10 of the Electronic Transactions Act 1999 (ETA).
Your client must state that the information provided is true and correct and that they authorise you to lodge that document for them.
Client declarations – examples
As the following examples show, no matter what the method is used to provide it:
- a declaration must be given each time you lodge an approved form
- the declaration must be written, for example in an email or letter (a phone conversation is not sufficient)
- the declaration must state that the
- information provided by the taxpayer is true and correct
- taxpayer has authorised you to lodge the specified approved form.
Examples cover the following questions:
- How does the use of a cloud-computing package affect the client declaration requirements?
- Does an email allow me to meet the client declaration obligations?
- Can the declaration be sent by separate email?
- What happens if the client uses a paper form?
- Does an email meet client declaration requirements?
- What if a client provides electronic data?
- What if the client gives information in separate emails?
How does the use of a cloud-computing package affect the client declaration requirements?
Example 1
Nick is a tax agent and his client, Jane, uses a cloud-based software accounting package. On 10 August 2014, she provides Nick with authentication details so he can access her business records and lodge her tax return for the 2013–14 income year.
Section 388-65 of Schedule 1 to the Taxation Administration Act 1953 (TAA) has a number of requirements that must be met.
Jane's declaration must:
- be in writing
- state that she has authorised her tax agent, Nick, to give the document to the commissioner
- declare that the information is true and correct.
So, Nick must have a declaration in writing from Jane. Section 9 of ETA allows for information that is to be provided in writing to be provided electronically. So this means that Jane can make this declaration electronically.
The declaration must state that Jane has authorised Nick to give the document to the Commissioner. While there is a reasonable argument to infer that the conduct of Jane providing the authentication details would satisfy this, there is a further requirement that Jane must declare that the information is true and correct.
Section 388-70 requires that Nick's declaration to the Commissioner must state that he has received a declaration from Jane and subsections 388-65(3) and (4) require that Jane retain the declaration for five years and produce a copy of the declaration to the Commissioner if requested to do so within the five years.
If the cloud based software accounting package does not include a field for Jane to provide that declaration then Jane would need to provide a separate declaration to Nick (which could be by fax or email if she chose to do this electronically) stating that the information is true and correct and that Nick is authorised to lodge the document. Jane should ensure that she clearly states which document is being lodged when providing her declaration.
So Jane's declaration would say:
I Jane O'Brien declare that the information I provided by software accounting package on 10 August 2014 to Nick Lee, tax agent, in relation to the approved form for the period 1 July 2013 to 30 June 2014 is true and correct and I have authorised Jamil Mohamed to lodge the approved form.
End of exampleDoes an email allow me to meet the client declaration obligations?
Example 2
Estelle is a tax agent and her client, Ruby, emails her asking her to deal with the ATO on her behalf until otherwise advised.
The statement 'until otherwise advised' is sufficient authorisation for Estelle to act on behalf of Ruby and Estelle does not have to provide this authorisation on each occasion she wanted to contact the ATO on behalf of Ruby.
However, Ruby must provide Estelle with a declaration stating that information is 'true and correct' and that Ruby has authorised Estelle to lodge the approved form on each separate occasion that Estelle lodges an approved form on Ruby's behalf.
Ruby would still need to state on each occasion that Estelle is authorised to lodge the document and the information is true and correct. This could be sent in an email or fax or in writing depending on which option Ruby prefers.
It would not be necessary to include an actual signature at the end of the email. Ruby's action of sending the email and Estelle accepting the information and then using that as a basis for lodging the approved form would be sufficient to satisfy the electronic signature provisions set out in section 10 of the ETA.
End of exampleCan the declaration be sent by separate email?
Example 3
Grace phones Duc, a tax agent, and asks that he deal with the ATO on her behalf until otherwise advised.
Even though Grace has spoken to Duc, she still needs to send the information in writing to him. She sends him an email declaration stating that information is 'true and correct' and that she has authorised Duc to lodge the approved form on her behalf.
While it would be logical for Grace to include the declaration in the email that includes all the information, it is not a legal requirement and if Grace and Duc choose then the declaration could be sent by separate email as long as the relevant approved form was clearly identified.
End of exampleWhat happens if the client uses a paper form?
Example 4
Amanda, a tax agent, has a client, William, who provides her with an activity statement as a printed excel spread sheet. Amanda prepares John's activity statement in paper form and posts this to William to check and approve. Once William checks the paper activity statement he signs and returns it to Amanda for lodgment. He has previously provided written authority for Amanda to act on his behalf.
As William has signed a paper activity statement form and has completed the required fields on page two of the activity statement, which includes a signed declaration that the information is true and correct, William has met his client declaration obligations.
If William had not signed the activity statement then he would have to make a separate declaration confirming both that the information is true and correct as well as stating he has authorised Amanda to lodge the document.
The ETA has no application in terms of the interaction between Amanda and William as this has occurred by paper but it is still open to Amanda to keep a copy of John's declaration electronically if preferred.
If William sent the declaration in an email rather than signing the activity statement, he could have provided Amanda with a separate declaration electronically in which case the ETA would apply to that part of the transaction. Again the declaration should indicate what document William is providing the declaration for.
End of exampleDoes an email meet client declaration requirements?
Example 5
Terry completes his activity statement and then provides information to his tax agent, Anne, by email and states in the email that authorisation to lodge has been provided.
As Terry has signed the declaration at the bottom of page two of the activity statement and the authorisation to lodge has been provided then the requirements of s388-65 of the TAA have been met. Whether the information is faxed or emailed as a Portable Downloadable File (PDF), the electronic signature provisions would be satisfied.
End of exampleWhat if a client provides electronic data?
Example 6
Bing's client, Ivy, provides her with electronic data for her activity statement using a back-up copy of her software package on a USB drive. Bing has Ivy's authority to lodge on her behalf.
Since Ivy has provided her activity statement information electronically she still needs to provide the declaration that the information is true and correct. This requires a separate email or fax with a declaration that the information is true and correct.
If Ivy's software accounting package currently doesn't provide for a client declaration to be made then Ivy will need to send Bing an email or fax that clearly specifies which activity statement or tax return the declaration relates to and a declaration that the information is true and correct and that she has authorised Bing to lodge.
End of exampleWhat if the client gives information in separate emails?
Example 7
Yanni's client, Kate, provides her tax return electronically but doesn’t complete the declaration field and then sends a separate email advising that the tax return she sent previously is true and correct. Kate has met the requirements for 'true and correct' however the declaration has not been sufficiently specified. It would not be enough to state that the tax return sent previously is true and correct. That could refer to any tax return Kate sent previously and it needs to be more specific, by, for example, referring to the year of the tax return or the date of the previous email.
End of example
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