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Director liability law changes

July 13 2012

On 29 June 2012, the Tax Laws Amendment (2012 Measures No. 2) Act 2012 received royal assent with retrospective effect.

Generally, the Act:

  • Extends the director penalty regime to make directors personally liable for their company’s unpaid superannuation guarantee amounts. This also leads to other new changes allowing for similar provisions to arise in respect of the superannuation guarantee charge as for Pay As You Go (PAYG) liabilities. These provisions are non-retrospective.
  • Ensures directors and associates cannot discharge their director penalties by placing their company into administration or liquidation when PAYG withholding or superannuation guarantee remains unpaid and unreported three months after the due date.
  • In some instances, makes directors and their associates liable to PAYG withholding non-compliance tax (effectively reducing credit entitlements) where the company has failed to pay amounts withheld to the Australian Taxation Office’s (the ATO).

To find out how this may affect you, please don’t hesitate to contact us.