Australia: TASA Part II: Transitional arrangements for tax (financial) advisers

In TASA Part I we introduced the FAT LEO test to assist in working out whether Tax Agents Services Act 2009 ("TASA") applies to you.

In TASA Part II we are looking at the transitional arrangements.

If you are a:

Financial Adviser who
Ascertains/advises on
Taxation:

Liabilities;
Entitlements; or
Obligations

Then you will need to abide by TASA. The implementation period can be split into two phases: the notification period, and the transitional period.

The notification period: 1 July 2014 to 31 December 2015

Any licensed financial adviser will need to issue the following statement when providing a 'tax (financial) advice service' when not registered with the Tax Practitioners Board (TPB):

1. the provider of the advice is not a registered tax (financial) adviser under the Tax Agent Services Act 2009; and
2. if the receiver of the advice intends to rely on the advice to satisfy liabilities or obligations or claim entitlements that arise, or could arise, under a taxation law, the receiver should request advice from a registered tax agent or a registered tax (financial) adviser.

This disclaimer is different to the one licensed financial advisers should currently be using to provide tax (financial) advice services. You will need to adopt the new disclaimer on 1 July 2014.

Once the AFSL holder/Authorised Representative (AR) is registered with the TPB no disclaimer is necessary.

Registration:

Any AFSL holder/AR who provides tax (financial) advice services with an appropriate disclaimer can notify the TPB on or after 1 July 2014 that they provide tax (financial) advice services. Technically, this implies that AFSL holders/ARs must have provided this service prior to notification. It will be interesting to see if the TPB will require evidence of this.

When an entity notifies the TPB, its registration is deemed for up to 3.5 years in accordance with the following table:

As you can see, the Act has in built incentives for AFSL holders and Authorised Representatives to notify the TPB sooner rather than later.

Once a licensed financial adviser is registered, they need to comply with the Tax Agent's 'Code of Professional Conduct', professional indemnity requirements, and relevant CPD requirements amongst other things. We will look at these requirements in subsequent blog posts.

The transition period: 1 January 2016 to 30 June 2017

The transition period is for any AFSL holders or representatives who were not eligible to, or did not register in the notification period to apply for registration with the TPB.

Registration in this situation is not automatic as it requires the TPB to be satisfied that you have sufficient experience and competence.

AFSL holders or Authorised Representatives who are not registered with the TPB by the beginning of the transition period (1 January 2016) must cease providing financial (tax) advice services until they become registered.

Confused?

The TASA reform involves two, normally separate areas of legislation and departmental oversight (TASA and the Corporations Act; TPB and ASIC). This can make the reform difficult to understand and complex in its application. If you need further advice on how to comply, don't hesitate to get in contact.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.