As we begin the potentially long COVID-19 recovery, the Federal Government is making some crucial changes to minimise fraud and protect the privacy and security of Australian directors.
Part of this process has been the introduction of Director Identification Numbers (DIN) – a unique identifier that a director will keep indefinitely. This initiative has been designed to help stamp out illegal phoenixing and other fraudulent activity, enabling the government to verify and track individual directors’ corporate history accurately.
It is critical to understand your new obligations as a director, as failure to apply for a DIN within the required time frame will leave you open to criminal and civil penalties.
So, if you are a director or support your organisation’s directors, you must get across the requirements and prepare yourself for what’s to come.
Applications have opened, so time to get cracking!
When do you need to apply?
When you need to apply depends on the date you were appointed as a director
- Existing directors (appointed on or before 31 October 2021) will have until 30 November 2022 to apply and be able to apply from 1 November 2021. So, we suggest that you sign up for your MyGovID now in preparation for the changes.
- New directors appointed between 1 November 2021 and 4 April 2022 will need to apply for their DIN within 28 days of their appointment. So from now on ALL new directors will need to apply for their MyGovID before their appointment.
Step 1: Apply for your MyGovID
If you haven’t already done so – it’s time to now apply for a MyGovID number (this is not to be confused with the MyGov platform).
This will ensure you are ready to use the Director ID platform when it’s launched. To understand how to get started, visit the Australian Business Registry Services (ABRS) website.
Who is entitled to an extension?
At this stage, the ATO has confirmed that there will be a process to apply for extensions of time for specific organisations and situations.
- New directors facing a rapidly approaching 28-day deadline may experience administrative hurdles in applying.
- Foreign directors of corporations operating in Australia are likely to encounter registration challenges as these directors won’t have access to the MyGovID platform. These non-Australian citizens will need to apply via a paper-based application process.
- Charities and not-for-profits may require extra support during the transition to DIN due to resource restraints; they may be entitled to apply for an extension if needed.
What are the penalties for non-compliance?
Civil and criminal penalties will apply where individuals:
- fail to apply for a DIN within the prescribed time frames or if directed by the Regulator to do so;
- intentionally apply for more than one DIN;
- provide a false DIN; or
- are actively involved in the infringement of any of the above offences.
Can Morrows assist with the registration?
Unfortunately, our advisers at Morrows cannot obtain the Director ID on behalf of our clients; as a director, you will need to action this yourself before the 30 November 2022 deadline.
If you have any questions or are unsure of what to do, please reach out to your Morrows Tax and Business Advisor.