ATO Director ID fine: One million Aussies face $13,000 fine if they don’t complete ID application

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A whole million Australians can get a big fine because of a taxation system inspection.

The Australian Taxation Office makes director IDs mandatory for all persons subject to the Companies Act.

It includes many small businesses and some charities and not-for-profit organisations, including sports and community groups.

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Anyone who is required to but fails to register by the Nov. 30 deadline faces a possible fine of up to $13,200 each.

“You only need one director ID, you do not need to apply for another if you become a director of other companies or corporations,” the ATO warns.

“You must apply for your own Director ID to verify your identity. No one can apply on your behalf.”

According to the ATO website, there is a maximum fine of $13,200 in a criminal case and $1000 in a civil case if you do not have a director ID when required.

They have been introduced to crack down on bodies that collapse without paying creditors and then resurrect as a different entity.

Who should apply for a director ID?

The ATO says people who need a director ID are directors of a:

  • company registered with the Australian Securities and Investments Commission (ASIC) or the Office of the Registrar of Indigenous Corporations (ORIC);
  • corporate trustee, for example of a self-managed super fund (SMF);
  • registered Australian body, for example an incorporated association registered with ASIC, such as sports clubs trading outside their state or territory;
  • charity or not-for-profit organization that is a company or Aboriginal and Torres Strait Islander Corporation.

That ABC reported earlier this month that half of the roughly 2.5 million directors had not obtained a director ID.

ATO tightened up the budget

The ATO received significant funding in October’s federal budget.

About $86.2 million was allocated over four years to the ATO and ASIC to work on the director ID scheme and to maintain ASIC’s register system.

The agency also received about $200 million over four years to strengthen its Tax Avoidance Taskforce.

Both the expansion and increased funding are intended to allow the task force to “support the ATO to pursue new priority areas of observed business tax risks which complement the ongoing focus on multinationals and large public and private companies”, according to budget papers.

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