The Government has introduced the Tax Laws Amendment (2012 Measures no. 2) Bill 2012 into the House of Representatives.

The Bill is intended to reduce the scope for companies to engage in fraudulent phoenix activity or escape liabilities and payments of employee entitlements by:

• extending the director penalty regime to make directors personally liable for their company’s unpaid superannuation guarantee amounts;
• ensuring that directors cannot discharge their director penalties by placing their company into administration or liquidation when PAYG withholding or superannuation guarantee remains unpaid and unreported three months after the due date; and
• in some instances, making directors and their associates liable to PAYG withholding non-compliance tax where the company has failed to pay amounts withheld to the Commissioner of Taxation (Commissioner). The tax on directors and their associates is imposed by the Pay As You Go Withholding Non-compliance Tax Bill 2012.

A new director is not liable to a director penalty for company debts
until 30 days after they become a director.

However the Australian Institute of Company Directors was of the view that the draft Bill:

• applies to all directors of Australian companies (registered under the Corporations Act 2001), not just to directors of companies suspected of phoenix activity;

• makes directors personally liable for the company’s unpaid superannuation guarantee amounts regardless of the directors’ culpability;

• makes new directors personally liable for the actions of the company even when the person was not a director at the time of the company’s breach.