VTAXPER35500 | Issues to consider: agency and disbursements: what is an agent?

We use the term ‘agent’ to describe a person who acts for or represents someone else (the ‘principal’) with the consent of both parties. An agent arranges supplies of goods or services between the principal and a third party by:

• obtaining goods or services for the principal (ie as a buying agent), or

• finding customers for the principal to sell to (ie as a selling agent).

Agents are always involved with two supplies at any one time:

• the supply between their principal and the third party, and

• the supply of their own services (services of agency) to their principal, for which a fee or commission is usually charged.