ASIC said the additional guidance sets out some basic principles that tax and BAS agents can apply to understand whether their advice falls within the licensing exemption, and provides examples to illustrate how the exemption works. You can access the updated guidance here.
The guidance explains the relationship between the exemption in section 766B(5)(c) of the Corporations Act and the exemption for providing tax advice on financial products, which is regulation 7.1.29(4) of the Corporations Regulations.
Speaking to SMSF Adviser, Licensing for Accountants chief executive Kath Bowler said in earlier versions of information sheet 216, ASIC was completely silent on the tax agent’s exemption, which created a lot of confusion under what advice they could provide under the tax agent’s exemption.
“So you had this bizarre situation where different people within the accounting practice had to rely on tax advice differently,” Ms Bowler explained.
The guidance makes it clear that licensed accountants and authorised accountants can provide tax advice under the tax agent’s exemption, she said.
“It’s now consistent. So for an accountant who is a tax agent, which is almost all of them if they’re in public practice, it’s the same treatment whether they’re licensed or unlicensed as to what they can give under that tax agent’s exemption,” she said.
[b]“So you had this bizarre situation where different people within the accounting practice had to rely on tax advice differently,” Ms Bowler explained.[/b]
Kath, don’t we still have this problem? The section headed ‘Tax advice on SMSFs and other financial products’ in INFO 216 still says the tax advice exemption only applies to financial products NOT covered by our license. It then goes on to say “If you hold an AFS license the exemption to provide tax advice on financial products does not extend to advice that is covered by your license.
So it still seems like unlicensed accountants are allowed to do more under the exemption than us, and we still have to put our tax advice into an SOA if our license includes those products.
Is that right or is ASIC’s wording, as usual, clear as mud?