Plans To Regulate Tax Advice In Australia

by Mary Swire, Tax-News.com, Hong Kong

10 February 2011

Australian Assistant Treasurer and Minister for Financial Services and Superannuation, Bill Shorten, has met with representatives from the financial planning, tax and accounting bodies, Treasury, the Tax Practitioners Board and Australian Securities and Investments Commission (ASIC) to discuss how financial planners who provide tax agent services as part of financial planning advice should be regulated.

Licensed financial planners are currently regulated by ASIC, while tax agent services are regulated by the Tax Practitioners Board.

This meeting was the second such meeting that has been held and is part of ongoing consultation that started in November 2010 with the release of an options paper by the Assistant Treasurer on the most appropriate means of regulating financial planners who also provide tax advice. The meeting followed consideration of submissions received during the consultation.

Meeting participants agreed that the following principles should underpin the development of new regulatory arrangements:

• Consumer protection is a key consideration;
• Competency of financial planners to provide tax services is a means of ensuring that quality advice is provided and that consumers of these services are protected;
• ASIC would, as far as practicable, be the key agency for interacting with financial planners and consumers in relation to tax services provided as part of financial planning services. This would minimise duplication and red tape;
• ASIC would be supported by a strong and collaborative arrangement with the Tax Practitioners Board to utilise expertise (tax and finance), and ensure that streamlined approaches can be implemented as far as possible.

These principles, according to Shorten, will provide "a solid basis for further consultation in relation to competencies and the scope of tax agent services that financial planners could provide under a new model."

Shorten stated that the government will continue to consult with industry throughout the development of this model and in the lead up to the release of Exposure Draft legislation for public consultation.

There will be another meeting between the Minister and industry representatives within the next two months.

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