Legislation had been before Parliament which the ATO had previously said included reforms designed to combat phoenix companies and rogue directors. The legislation was to operate with retrospective effect from 1 July 2011.
The legislation would have allowed the ATO to start issuing proceedings against directors personally for certain company tax liabilities – without first issuing a DPN (Directors Penalty Notice), once the liability had remained unpaid and unreported for more than 3 months after the due date. The tax liabilities for which a director could become personally liable was to be extended from only unpaid PAYG, as before, to now also include Superannuation Guarantee liabilities.
However, to the surprise of some, the Government announced yesterday that the legislation had been withdrawn. Opposition treasury spokesman Joe Hockey’s rather amusing comment, in response to this development, was this: “The government was using a sledgehammer to crack a nut and thankfully the nutters rebelled.”
There was to be further consultation with industry and stakeholders and possible modification to the DPN laws, to ensure the proposed changes would not affect company directors inappropriately in certain circumstances.
The legislation is expected to be reintroduced some time in 2012.
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