Amendments to the Tax Agent Services Act (TASA) will require financial planners to register as tax agents with the Tax Practitioners Board.
In its submission to the parliamentary joint committee – which is currently undertaking an inquiry into the TASA amendments – the FSC said TASA is due to commence on 1 July 2013.
“[This is] the same time as FOFA and months shy of MySuper’s commencement,” the submission stated. “It is inconceivable that on the cusp of the commencement of significant reforms (FOFA and Mysuper) that the industry needs to again amend business models and practices to comply.”
The FSC called on the government to amend the relevant schedules “to enable the pragmatic implementation of this regime to [Australian Financial Services Licensees] from 1 July 2013”.
In addition, the FSC recommended that the Australian Securities and Investments Commissions (ASIC) amend Regulatory Guide 175 on the Best Interests Duty to enable advice providers to comply with the Best Interest Duty ‘safe harbour’.
If the amended TASA legislation is not passed by 28 June 2013, the government should continue to exempt the financial services industry from TASA for a further six to 12 months from 30 June 2013, the submission said.
“This delay in implementation of the regime may also assist the Tax Board to be better prepared to process the approximately 59,564 applications over the next three years,” the FSC said.
The submission also noted that tax advice from financial advisers tends to be general in nature – for example, advice about the difference in the tax treatment of investing inside and outside super.
Such advice is “generally much simpler in nature than tax advice provided by a tax agent”, said the FSC.
“We recommend that the provision of tax information (generally available information) is not a tax agent service and should be expressly exempted in TASA,” the submission stated.
