The Tax Laws Amendment (2013 Measures No 2) Bill 2013 was on Thursday 6.6.2013, passed by the House of Reps with amendments.
The main amendment was 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 proposed changes deleted from the Bill have been referred to the Parliamentary Joint Committee for Corporations and Financial Services for inquiry and report by 17 June 2013.
Shadow Assistant Treasurer Senator Mathias Cormann said the amendments would have applied to practitioners in the financial services industry that give tax-related advice. Senator Cormann said the Bill as it stood would have created a new licensing regime with less than 4 weeks to go before implementation, “in the face of fierce opposition from the financial services industry”. There were concerns among planners that there were too many uncertainties and outstanding issues surrounding the amendments eg re ongoing training, competency requirements, PI insurance, etc.
The Assistant Treasurer said the Government would “allow further time for the Parliament to consider the legislation” but it is not not known if the 30 June carve-out deadline will now be extended or the TASA amendments will be passed before Parliament rises on 27 June 2013.
The other amendments made to the Bill add Social Traders Ltd to the list of specifically listed deductible gift recipients. This applies to gifts made after 30 June 2013.
The Bill, minus the financial planner amendments, now moves to the Senate.
Unamended provisions in the Bill
The amendments contained in the Bill to go to the Senate include:
- new requirements for all large entities in the PAYG instalment system to make their instalments monthly, instead of quarterly;
- forcing large corporate taxpayers to reveal tax information and for the Commissioner to publish it;
- removal of the 50% CGT discount for foreign resident and temporary resident individuals on taxable Australian property, such as real estate and mining assets;
- tax incentives for nationally significant infrastructure projects;
- GST-free treatment for NDIS funded supports;
- exemption from income tax payments made to individuals under the Defence Abuse Reparation Scheme;
- the specific listing of 5 new organisations as DGRs.
[LTN 108, 6/6/13]
Treasury’s proposed educational requirements ‘tax (financial) advisers’ to register under TASA
On 6 June 2013, the Leader of the House of Reps referred the creation of a regulatory framework for tax (financial) advice services based on Schedules 3 and 4 to the Tax Laws Amendment (2013 Measures No 2) Bill 2013 to the Parliamentary Joint Committee on Corporations and Financial Services [those Schedules had been deleted from the Bill by amendments in the House]. The Committee is due to report by 17 June 2013.
Treasury on Fri 14.6.2013, released a paper that outlines the proposed educational and experience requirements for tax (financial) advisers an individual would need to meet to be registered as a tax (financial) adviser as envisaged in the amendments contained in Sch 3 to the Tax (No 2) Bill.
COMMENTS are due by 11 July 2013.
[FJM Note: see ‘Tax Practitioners Board’ heading for transcript of the Parliamentary Joint Committee – as the thrust of the submissions at the hearing was that ‘tax (financial) advisers’ be regulated under the Tax Agents Services Act or TASA.]
[LTN 113, 14/6/13]
PJC recommends transitional framework for financial planners:
The report of the Parliamentary Joint Committee on Corporations and Financial Services Regulatory framework for tax (financial) advice services (previously Tax Laws Amendment (2013 Measures No 2) Bill 2013, Schedules 3 and 4), was tabled in the House of Reps on 17.6.2013. The Committee inquired into the now removed Schedules 3 and 4 of the Bill, which proposed a regulatory framework to make financial planners who give tax advice subject to the tax agent services regime.
The Committee recommended that ASIC, in consultation with stakeholders including the Taxation Practitioners Board, consider the case for amending Regulatory Guide RG 175 along the lines proposed by the Financial Services Council and the Financial Planning Association. The Committee suggested that as part of this process, the TPB should discuss with relevant stakeholders the current requirement in the Tax Agent Services Act 2009 for a “sufficient number” of individuals to be registered as tax agents before a company is eligible for registration.
The Committee also recommended that the transitional arrangements be amended to stipulate that, from 1 July 2013 until 31 December 2013, unregistered financial services licensees and representatives may provide tax (financial) advice services on condition that they accompany such a service with a disclaimer.
Subject to the above recommendations, the Committee recommended that the proposed amendments contained in Schedules 3 and 4 be reintroduced and passed.
The Coalition members of the Committee issued a dissenting report which said they considered that the government proposals “should not be proceeded with at this point”. They recommended that Parliament insist that the Government defer the proposed changes to bring financial planners and advisers into the TASA regime by 12 months to 30 June 2014.
[LTN 114, 17/6/13]
Senate Committee recommends passing Schedule 5 requiring large companies to publish their tax paid (dissenting opposition report)
The report of the Senate Economics Legislation Committee into the Tax Laws Amendment (2013 Measures No 2) Bill 2013 was tabled in the Senate on Mon 17.6.2013. The Committee recommended the Senate pass the Bill. The Coalition members of the Committee considered that the proposed amendments in Sch 5 of the Bill not be proceeded with. Those amendments would, if enacted, amend the TAA to allow the publication of particular information about the tax affairs of large corporations and to enable greater information sharing between the ATO and Treasury for the purposes of decision making under the Foreign Acquisitions and Takeovers Act 1975 or Australia’s Foreign Investment Policy.
The Bill had been 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 for entities (individuals, partnerships and companies) in the financial services industry that give tax advice.
[LTN 115, 18/6/13]