On 20 June 2013 the Assistant Treasurer introduced the Tax Laws Amendment (2013 Measures No 3) Bill 2013, which will amend the Tax Agent Services Act 2009 (Cth) (TASA) to bring entities that give tax advice in the course of giving advice that is usually provided by financial services licensees within the regulatory regime administered by the Tax Practitioners Board. This is intended to ensure the consistent regulation of all forms of tax advice, irrespective of whether it is provided by a tax agent, a BAS agent or an entity in the financial services industry. The Bill also makes other amendments to the TASA to correct a range of technical issues.
In addition, the Bill will update the list of specifically listed deductible gift recipients (DGRs).
Tax (financial) advice services
The Bill creates the new regulatory regime within the TASA for entities in the financial services industry that give tax advice. It does this by creating a new type of regulated service in the TASA, that of a “tax (financial) advice service”.
A tax (financial) advice service consists of two elements: that of providing a tax agent service, and providing that service in the course of giving advice that is of a kind usually given by a financial services licensee or a representative. The Bill incorporates such services, as appropriate, into the existing registration framework and Code of Professional Conduct that applies to registered tax agents and registered BAS agents.
Subject to transitional arrangements, the Bill also establishes a civil penalty regime that applies to unregistered entities that provide tax (financial) advice services in much the same way as the existing civil penalty regime applies to unregistered entities that provide tax agent services or BAS services.
The Bill also allows the TPB to disclose official information to ASIC for the purpose of ASIC performing any of its functions or exercising its powers.
The Bill makes several consequential amendments to the ITAA 1997 arising from the creation of this new type of service. It also extends, for 12 months, the current carve-out in the Tax Agent Services Regulations 2009 (TASR) for financial services licensees or authorised representatives that provide financial product advice.
There are transitional provisions for entities providing tax (financial) advice services from 1 July 2014 through to 30 June 2017. This consists of an initial 18 month notification period followed by an 18 month transitional period.
During the notification period, entities in the financial services industry need not immediately register with the TPB. Unregistered financial services licensees and their representatives may provide these services provided they accompany them by a disclaimer similar to that contained in reg 13(2) of the TASR.
In addition, financial services licensees and authorised representatives that provide tax (financial) advice services may prospectively register with the TPB without having to meet any ongoing registration requirements (such as those relating to qualification and experience) during the notification period.
During the transitional period, any other unregistered financial services licensees or representatives may apply to the TPB to be registered. During this time, the ongoing registration requirements will be eased.
The Bill also makes technical amendments to the TASA. These include:
- making it a registration requirement, rather than a separately imposed TPB requirement, for registered entities to maintain professional indemnity insurance (PI insurance) that meets the TPB’s requirements and, for individuals renewing their registration, making it a registration requirement to meet the TPB’s continuing professional education (CPE) requirements
- allowing the TPB not to accept a registered entity’s surrendered registration if that entity is subject to an investigation
- allowing the TPB to broaden the scope of what services constitute a BAS service, by issuing legislative guidelines
- allowing the TPB to provide information about a registered entity, if that entity is a member of an accredited professional association, to that professional association, and
- allowing the TPB to disclose information to the Commissioner for the purposes of administering a taxation law.
Deductible gift recipients
The Bill will add the Australian Council of Social Service Incorporated and Make a Mark Australia Incorporated to the list of specifically listed DGRs.