ATO Director ID fine: One million Aussies facing $13,000 fine if they don’t complete application for identification number

As many as one million Australians could face a hefty fine due to a taxation system overhaul.

The Australian Taxation Office is making director IDs mandatory for every person covered by the Corporations Act.

That encompasses 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 sign up before the November 30 deadline will face a possible fine of up to $13,200 each.

“You will only ever need one director ID, you don’t have to apply for another one 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, failure to hold a director ID when required to do so comes with a maximum fine of $13,200 in a criminal case and $1000 for a civil case.

They have been introduced to crack down on bodies that collapse without paying creditors and then re-emerge as another entity.

Who needs to apply for a director ID?

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

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

The ABC reported earlier this month that half of the roughly 2.5 million directors had not been issued with a director ID.

ATO beefed up in budget

The ATO received significant funding in the October federal budget.

Some $86.2 million was put aside over four years for the ATO and ASIC to work on the director ID scheme and to maintain ASIC’s registry system.

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

Both the extension and increased funding is intended to allow the taskforce to “support the ATO to pursue new priority areas of observed business tax risks, complementing the ongoing focus on multinational enterprises and large public and private businesses”, according to budget papers.

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