In media release No 2010/072, issued 23 April 2010, the Assistant Treasurer, Senator Nick Sherry, announced further details of the coverage of the new national tax agent services regime.
First, the Assistant Treasurer announced that the exemption provided in March 2010 to those providing advice "in-house" within a tax consolidated group will be extended to cover services provided between other related entities
Secondly, the Assistant Treasurer announced that custodians will not be captured by the tax agent regime.
Thirdly, the Assistant Treasurer announced that he had determined to provide a one-year deferral to financial planners from the application of the tax agents' regime.
An amendment will be made to the Tax Agent Services Regulations 2009 to confirm this deferral arrangement. During the period of deferral a comprehensive industry consultation will take place to assess which of 2 permanent options should be applied to Australian Financial Services licence (AFSL) holders.
The Assistant Treasurer indicated these options were:
- to investigate and implement what changes, if any, might be made to the AFSL regime or its enforcement to ensure that it provides a comparable level of regulatory supervision in relation to tax services provided by financial planners in comparison to the level of supervision imposed on the providers of tax services regulated by the TPB; or
- to bring financial planners permanently within the tax agent services regime and therefore be regulated by the TPB, but to do so in a way that minimised any additional compliance burden.
In a media release issued on 23 April 2010, the Taxation Institute of Australia said that exempting financial planners from the New Tax Agent Services Regime for 12 months is a "disappointing step backwards".
The Institute said the Federal Government's decision was at odds with the legislation’s intention that anyone giving tax advice should follow consistent requirements in education, service levels and ethics to maximise consumer protection in this often difficult area.
"While we’re disappointed we also intend to make the most of what amounts to 12 months of consultation on this issue," said Tax Institute president David Williams. "We have to ask where this leaves a consumer going to a financial planner for the next 12 months in terms of protection?"
"Any blanket exemption of financial planners - who are clearly providing advice about the impact of the tax laws to a particular situation - can only damage the good work the law was intended to deliver," Mr Williams said.