Treasury has released drafts of the Tax Laws Amendment (2012 Measures 3 No. 2) Bill 2012: Companies’ non-compliance with PAYG withholding and superannuation guarantee obligations and Pay As You Go Withholding Non-compliance Tax Bill 2012 for consultation.
Currently under the director penalty regime company directors are personally liable for amounts withheld by their company that have not been remitted to the Australian Taxation Office (ATO). The Tax Laws Amendment (2012 Measures No. 2) Bill 2012: Companies’ non-compliance with PAYG withholding and superannuation guarantee obligations will extend the regime to cover Superannuation Guarantee amounts.
A new director will not be liable to a director penalty for company debts that existed when they became a director until 30 days after they became a director.
Currently a director has a defence in relation to a director penalty if the director had an illness that prevented him or her participating in the management of the company, or if the director took all reasonable steps to ensure compliance.
In addition to these defences, a director that becomes liable to a director penalty for not causing its company to comply with its superannuation obligations will not be liable to a director penalty if the company treated the SGA Act 1992 as applying to a matter in a way that was reasonably arguable and the company took reasonable care in applying the SGA Act 1992 to the matter.
The Bills will ensure that directors cannot have their director penalties remitted by placing their company into administration or liquidation when unpaid Pay As You Go (PAYG) withholding or superannuation guarantee amounts remain unpaid three months after the due date. New directors are not subject to these restricted remission options until 3 months after they become a director of a company, rather than 3 months after a debt arose.
There will be restricted access to PAYG withholding credits for company directors and their associates where the company has failed to pay withheld amounts to the Commissioner of Taxation.
Submissions close on 2 May 2012 to allow for the introduction and passage of the legislation in the Winter 2012 sittings of Parliament.
