New Changes to Company Director Liabilities

Last week, the Federal Government announced its passing of their Treasury Laws Amendment (Combating Illegal Phoenixing) Bill 2019.

The passing of the Bill now holds Directors' personally liable for their company's GST Liabilities, alongside Luxury Car Tax, and Wine Equalisation Tax Liabilities.

The Bill will authorise the Commissioner of Taxation to collect estimates of anticipated GST liabilities, where there are reasonable grounds to believe that the taxpayer (or related entities) are involved in phoenix behaviour, or have dissipated assets with the intention to defeat creditors.

The introduction of these amendments, alongside others, look to combat illegal phoenix activity and its effects on the Australian economy - estimated to cost Australian businesses and the Government between $2.85b - $5.13b in previous years.

Other introduced changes under the Bill also include:

• New Phoenix Offences - aimed to:
  • Prohibit creditor-defeating dispositions of company property,
  • Penalise those who engage in or facilitate such dispositions; and
  • Allow liquidators and ASIC to review such property

• Ensure that Directors are held accountable for misconduct by:
  • Preventing Directors from improperly backdating resignations; and
  • Ceasing to be a Director when this would leave the company with no Directors

Additionally, the Bill will enable the Commissioner to retain tax refunds where a taxpayer has failed to lodge a tax return or provide other information that may affect the amount the Commissioner refunds.

For More Information

For more information on ASIC's Director Duties and Obligations, or to discuss the newly introduced amendments in further detail - please contact Ian Walker, Managing Director - on (07) 3002 2699.