GST Director Penalty Notices

Director Penalty Notices GST

In July 2019, the Federal Government introduced the Treasury Laws Amendment (Combating Illegal Phoenixing) Bill 2019 to seek to introduce GST Director Penalty Notices.  The legislation was passed by both houses of Parliament on 5 February 2020.

The legislation amends director penalty provisions so that Director Penalty Notices can be issued for GST, as well as Luxury Car Tax and Wine Equalisation Tax. As most businesses are liable for GST, this article focuses on the amendments as they relate to GST. 

Provisions relating to GST Director Penalty Notices will commence the Quarter after the legislation receives Royal Assent, meaning they will likely apply from 1 April 2020. The provisions are not retrospective, meaning that directors can only be liable for unpaid GST incurred from 1 April 2020 onwards.

Director Penalty Notices for GST will apply in the same way as they do for PAYG Tax, that is there will be:

21 Day GST Director Penalty Notices

21 Day GST Director Penalty Notices will apply if a company fails to pay GST but it lodges activity statements within three months of the due dates. If this applies then the ATO can issue a Director Penalty Notice, but the directors can avoid liability by:

  • Causing the GST to be paid;
  • Placing the company in liquidation; or
  • Placing the company in voluntary administration.

Lockdown GST Director Penalty Notices

Lockdown GST Director Penalty Notices will apply if a company fails to pay GST and also fails to lodge activity statements within three months of being due. In these circumstances the ATO can estimate a company’s GST liability (if necessary) and issue a Director Penalty Notice making the director(s) automatically liable for the company’s unpaid GST.

Contact us for advice and assistance 

If your company has a tax debt or unpaid GST, even if it is not a debt you can be personally liable for under the current Director Penalty provisions, you should still seek professional advice. You can contact us on 1300 023 782 or email team@cdrta.com.au for an initial, obligation free consultation.

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Craig is the principal consultant of C&D Restructure and Taxation Advisory and has been working in the industry since 1999. Having established C&D Commercial Partners in 2015 the precursor to the current business.

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Post Author: Craig Dangar

Craig is the principal consultant of C&D Restructure and Taxation Advisory and has been working in the industry since 1999. Having established C&D Commercial Partners in 2015 the precursor to the current business.

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