30 November 2022
Further to our recent FAQ on applying for a Director identification number (Director ID), the Australian Tax Office has announced important changes for resigned company directors.
Previously, if you were a director or an alternate director on or before 31 October 2022, you needed to apply for a Director ID even if you had resigned from your position.
However, the Commissioner of Taxation has released draft legislative instrument ABRS 2022/D1, which states that individuals who were directors of companies before 31 October 2021 but resigned before 30 November 2022 will not be required to apply for a Director ID. The draft legislative instrument will take effect on 1 December 2022. The consultation period for the draft legislative instrument is open until 9 December 2022. We will provide an update once it has been published by the ATO.
Therefore, all existing directors who continue as a director after 30 November 2022, must have applied for a Director ID before 30 November 2022.
All individuals planning to become directors on or after 1 December 2022 will be required to apply for a Director ID.
Directors who have not applied for a Director ID within this timeframe will face substantial fines ($1.1 million in civil penalties – and criminal penalties, which are outlined in our FAQ).
For most people residing in Australia, obtaining a Director ID is reasonably quick and simple.
However, for Australian residents without a MyGovID or foreign residents (in particular from non-English speaking countries), the process may take several days or months, as additional steps are required (such as providing certified copies and certified translations into English of the required documents).
All directors who:
We can advise you on how to resign, or remove directors or alternate directors from companies before 30 November 2022.
Carl Hinze (a fluent Mandarin speaker) and Jeanne Vallade (a native French speaker) frequently assist clients with their investments and advise on incorporation and governance requirements and processes for Australian and foreign boards of directors, including Director ID applications.
The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future.