Having been delayed over the summer recess, legislation empowering the ATO to estimate GST Liabilities and make director’s personally liable for GST has been passed by parliament and received royal assent.
We discussed two of the new laws in our earlier newsletter on the matter. To recap these two key provisions:
- GST Estimates: The ATO can estimate a GST liability even before the relevant BAS is due, similar to estimate powers available for Income Tax assessments. The ATO has asserted that it will only use these powers under ‘reasonable grounds of phoenix behaviour’.
- Directors Personal Liability: Alongside powers already with the ATO to hold directors personally liable for PAYG Withholding and Superannuation payments, directors will now also be liable for taxes under the GST regime. This includes GST itself, along with Wine Equalisation tax and Luxury Car tax.
These new provisions will come into effect on the first day of the next quarter – an effective start date of 1 April 2020.
In addition to the above, the same legislation also introduced:
- Additional powers to void property transactions where those transactions were in an effort to defeat creditors. This continues the governments attack against Phoenixing activity.
- Apply significant limitations to the resignation of directors, aimed at increasing the accountability of resigning directors. A resignation must be lodged with ASIC within 28 days, or else the resignation is effective on the date ASIC is notified (I.E. Resignation can no longer be backdated). In addition, a resignation is invalid if it would leave a company without a director.
These changes have come into effect immediately.
If you have any concerns regarding these changes of law, please feel free to contact our office to discuss the above.
Date of Issue: 24 February 2020 Author: Noé Vicca & Hayden Gaffel
Disclaimer: The contents herein are intended for general information only and should not be construed as legal or accounting advice. Vicca Chartered Accountants Brisbane bears no responsibility for any loss that might occur from reliance on information contained in this publication. Please do not reproduce, transmit or distribute the contents herein in any form without prior permission from Vicca Chartered Accountants, Taxation Accountants Brisbane Australia.