The treasury has released a draft legislation that may make a company director personally liable for Goods and Services Tax (GST).
The Commissioner of Taxation may receive powers of making directors liable for GST.
This is to halt the practice of of phoenixing. Phoenixing refers to the deregistering of a company to avoid the payment of taxes. If the authorities enact the new command as law, the Australian Taxation Office (ATO) will have the ability to speed up all GST payments. Please note that in certain circumstances, this may affect the progress of your company.
While the director is highly accountable for GST, there are still some provisions that exempt the director from being personally liable for the company’s Goods and Services Tax. Moreover, in cases where the organisation cannot make the GST payment, they can enter into a payment arrangement after lodgement. It’s good to note when there is a payment arrangement in place, the director is safe from having a penalty.
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