The Treasury Laws Amendment (Combating Illegal Phoenixing) Bill 2019 has been introduced into the House of Representatives. Background.
UPDATE: the Senate has referred the Bill to the Economics Legislation Committee for inquiry and report by 26 March 2019.
The Bill introduces new phoenixing offences into the Corporations Act to prohibit creditor-defeating dispositions of company property, penalise those who engage in or facilitate such dispositions, and allow liquidators and ASIC to recover such property.
“Phoenix activity” is not defined in legislation and can encompass both legitimate business rescue activities and the use of serial deliberate insolvency as a business model to avoid paying company debts.
If passed the Bill:
- ensures directors are held accountable for misconduct by preventing directors from improperly backdating resignations or ceasing to be a director when this would leave the company with no directors;
- allows the Commissioner of Taxation to collect estimates of anticipated GST liabilities and make company directors personally liable for their company’s GST liabilities in certain circumstances; and
- authorises the Commissioner of Taxation to retain tax refunds where a taxpayer has failed to lodge a return or provide other information to the Commissioner that may affect the amount the Commissioner refunds.