Company Directors can become personally liable for outstanding superannuation guarantee charges and PAYG withholding tax

Company Directors should be aware of a law called the Personal Liability for Corporate Fault Reform Bill 2012. Basically Company Directors become personally liable for outstanding superannuation guarantee charges and PAYG withholding tax if the company fails to make these payments within the stipulated time. Further it places the burden of proof on Company Directors to prove that they are innocent.

The Commissioner of Taxation must issue a Notice and wait until the end of twenty one days after issuing that Notice before commencing Proceedings. A Director can achieve remission of their personal liability by causing one of three things to happen before the Notice is issued or within twenty one days after the issue of the Notice:

a) The company pays the liability;

b) An administrator for the company is appointed; or

c) The company begins to be wound up.

This is only a brief summary of the law and full advice should always be obtained if the company is in difficulty in meeting its taxation liabilities.

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