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Elements and Performance Criteria

1. 1. Assess legal entity's tax obligations
   • 1.1 Quantify history and trends of legal entity's tax obligations arising from its historical taxable transactions, using standard accounting techniques
   • Analyse data from current transactions to resolve discrepancies and ambiguities and confirm suitability of legal entity
   • 1.3 Conduct research to identify updates or additions to compliance requirements relevant to maximising client's benefit and establish recording and reporting requirements
   • 1.4 Identify legal entity's tax obligations by analysing data on taxable transactions
   • Schedule payments of tax obligations by applying methods of determinations and tax bases
2. Develop tax plans
   • 2.1 Assess implications of schedule on tax entity's operations and structure
   • Develop financial management strategies to ensure alignment of cash flow with incidence and schedules of tax obligations
   • Develop management process and record-keeping systems to implement financial management strategies and ensure maintenance of audit trail
   • Document management processes that include application of compliance requirements
   • Estimate future taxation obligations from income and expenditure forecasts using standard accounting techniques
3. Assess legal entity's tax obligations
   • Quantify history and trends of legal entity's tax obligations arising from its historical taxable transactions, using standard accounting techniques
   • Analyse data from current transactions to resolve discrepancies and ambiguities and confirm suitability of legal entity
   • Conduct research to identify updates or additions to compliance requirements relevant to maximising client's benefit and establish recording and reporting requirements
   • Identify legal entity's tax obligations by analysing data on taxable transactions
   • Schedule payments of tax obligations by applying methods of determinations and tax bases
   • Assess implications of schedule on tax entity's operations and structure
   • Develop financial management strategies to ensure alignment of cash flow with incidence and schedules of tax obligations
   • Develop management process and record-keeping systems to implement financial management strategies and ensure maintenance of audit trail
   • Document management processes that include application of compliance requirements
   • Estimate future taxation obligations from income and expenditure forecasts using standard accounting techniques
4. Evaluate and advise on tax plan
   • Prepare budgets in accordance with income and expenditure forecasts, and periodically review to ensure accuracy of tax obligation estimates
   • Analyse variances between actual tax obligations and tax plan to identify errors or adjustment required to financial management strategies or management process
   • Monitor and evaluate performance of tax plans and advise accordingly
   • Monitor and review tax documentation to ensure it complies with legislative and professional requirements
   • Analyse evidence of non-compliance to diagnose origin and develop resolution

Performance Evidence

Evidence of the ability to:

research and critically evaluate new or changed legislative requirements and apply where relevant to the preparation of the client's tax documentation

identify legal entity's tax data required to calculate taxable income

provide taxation advice to clients in line with individual requirements

prepare tax documentation and tax plans for legal entities that comply with:

Australian taxation law and Australian Taxation Office (ATO) rulings and lodgement schedules

accounting principles and practices

tax entity's organisational policy and procedures

evaluate tax plan for compliance with legislative requirements.

Note: If a specific volume or frequency is not stated, then evidence must be provided at least once.

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Knowledge Evidence

To complete the unit requirements safely and effectively, the individual must:

identify and explain ethical considerations and legislative requirements relevant to the preparation of tax documentation for legal entities, including:

conflict of interest

responsibilities of tax agents including Code of Professional Conduct obligations under the Tax Agent Services Act (TASA) and Tax Agent Services Regulations (TASR)

government tax policy documents issued by Reviews, Treasury and Board of Taxation

explanatory materials in relation to legislation

statutes

court and Administrative Appeals Tribunal decisions

Commissioner of Taxation's interpretive guidance in Rulings and Determinations

explain critical and key elements of Australian taxation law as it relates to tax documentation for legal entities such as companies, trusts, partnerships and sole traders including:

the rules and principles of Australian tax law, with an understanding of the legal environment in which these principles operate, basics of the legal system, constitutional considerations and separation of powers

the key aspects of income tax law covering concepts of residence and source, related elements of international tax, assessable income, deductions, tax rebates and offsets, and tax accounting

the key aspects of taxes that extend the ordinary income tax base, including relevant principles and application of the capital gains tax (CGT) and fringe benefits tax (FBT) rules

goods and services tax (GST)

taxation aspects of superannuation law

administrative aspects of the taxes identified above including documentation, tax collection and withholding mechanisms, assessments, obligations, rulings, penalties and audits

specific and general anti-avoidance tax rules

describe the key sources of information and taxable transactions data required to calculate taxable income, including:

allowable deductions

capital gains

financial adjustments such as write-offs and revaluations

income

payments

purchases

superannuation payments

describe the key features of organisational policy and procedures relating to the preparation of tax documentation for legal entities

outline the key accounting principles and practices relevant to preparation of tax documentation for the different types of legal entities

discuss ethical considerations for the preparation of returns, including the Code of Professional Conduct's disclosure and confidentiality requirements

outline financial management strategies used to optimise tax position.

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