Finance News
Legislation passed with big impact on directors
11 Feb 2020

The Treasury Laws Amendment (Combating Illegal Phoenixing) Bill 2019 has been passed and directors of companies need to be aware of the new risks and potential liabilities this new legislation exposes them to.

The new regulations allow the ATO to collect outstanding company GST, luxury car tax and wine equalisation tax from directors and their personal assets. As such, the strong corporate veil protection offered by companies is slowly being broken down with these taxes being added to unpaid employee entitlements (PAYG withholding and superannuation) which were previously also imposed on directors.

A guideline released by the ATO suggests that these regulations also allow the ATO to impose estimates of anticipated GST liabilities to directors personally where outstanding lodgements exist and the taxpayer has refused to cooperate with the ATO.

With the legislation also preventing the inappropriate backdating of director resignations, it will increase the importance of taxpayers receiving the appropriate advice on the obligations and responsibilities of holding a directorship.

If you need advice on structuring your business or would like to know more, please do not hesitate to contact us.

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