The Tax Laws Amendment (2013 Measures No 2) Bill 2013 was recently amended by the House of Reps to remove from the Bill the provisions that proposed to create a new regulatory regime within the Tax Agent Services Act 2009 (TASA) for entities (individuals, partnerships and companies) in the financial services industry that give tax advice. The amendments were to have applied from 1 July 2013 (subject to a 3-year transitional period before the new regime is due to commence in full on 1 July 2016).
Currently, the Government has carved out tax agent services provided by financial services licensees and their authorised representatives from the TASA regulatory regime where the entity providing the service: (i) accompanies it with a statement that they are not a registered tax agent; and (ii) advises the recipient that they should seek the services of a registered tax agent if they wish to rely on the advice. This carve-out is due to automatically expire on 30 June 2013.
The Financial Services Council (FSC) has now called on the Government to amend the TASA by 28 June or give the financial services industry a further 6 to 12 month extension to comply with that Act.
FSC CEO John Brogden told a Parliamentary Joint Committee hearing on Wed 12.6.2013, that if the Tax Amendment (No 2) Bill is not implemented in an amended form, financial advisers could not continue to provide services to Australians from 1 July 2013. “We have 18 days to go before we find ourselves in the Future of Financial Advice (FoFA) regime and are currently in the last month of the third of three one year exemptions for TASA. The industry needs confirmation that there will be no conflict between TASA and FOFA.”
The FSC’s key recommendations to the Committee were:
- amend the Schedules amending TASA so the regime can be implemented for Australian Financial Services Licensees (AFSLs) from 1 July 2013;
- ASIC should amend RG175 on Best Interest Duty to enable an advice provider to comply with the Best Interest Duty safe harbour requirement in TASA; and
- pass the amended Bill before 28 June 2013.
The Financial Services Council estimated it would cost the advice industry id=”mce_marker”bn to meet the requirements of TASA.
Source: FSC media release, 12 June 2013
[LTN 112, 13/6/13]