On its SMSF FAQ website page, the ATO said it recognised that COVID-19 impacts such as social distancing or isolation requirements or your tax agent or accountant working from a home office may prevent trustees from signing their SMSF’s financial statements in person this year.
Under current superannuation laws, trustees are required to sign their SMSF’s financial statements before finalising their fund’s audit each income year.
However, the ATO said there are options available for trustees unable to sign financial statements in person.
It said alternative options consist of returning a signed scanned copy to your tax agent or accountant by email or using an electronic signature such as a digital signature.
The ATO said digital signatures should be provided:
- using a secure system, typically through an established third-party provider
- in a way that clearly identifies the trustee signing and indicates the approval you are providing
“A secure system would include a system that requires a personal identification number, access code or password to use,” the ATO said.
“If you can’t use these alternative options to sign your financial statements, your agent or accountant should post the financial statements to you and you will need to sign them and arrange to return them to your agent by post.
“You will not meet the signature requirement if you only acknowledge the financial statements by email or over the phone.”
ASF Audits executive general manager of technical services Shelley Banton previously noted that COVID-19 will lead to the inevitable “fast-tracking” of e-signatures as an industry standard.
Speaking to SMSF Adviser, she added that there will be significant delays in trustees being able to sign financial statements given the impact of COVID-19.
“The ATO is trying to let SMSF professionals know that there are options available that will help SMSF trustees meet their obligations. The blanket extension to 30 June lodgement deadline has also helped with this issue,” Ms Banton said.
Under section 35b of the SIS Act, financial statements have to be signed according to one of the following cases:
- where there are individual trustees, at least two individual trustees
- where there is a single corporate trustee, at least two directors of the corporate trustee
- where there is a single corporate trustee and there is a sole director, the director of the corporate trustee
If there is a contravention of this section, a penalty of 100 penalty units can be applied.
“system that requires a personal identification number, access code or password to use”, this is a tick in the right direction and a sensible response considering the current COVID pandemic. Now most of the email platforms provide multi-factor authentication and even though you will not need an identification such as driving licence when initial signing. May be even trust worthy than a hard signed document. However need to make sure that smart phone need to be kept safe, preventing any unauthorised access.