Submission on the Tax Laws Amendment (2012 Measures No. 2) Bill

• Date:02 May 2012
• Type:Policy Submission

This submission to the Business Tax Division of the Treasury is regarding the Tax Laws Amendment (2012 Measures No. 2) Bill 2012.

The Australian Institute of Company Directors has significant reservations about the Bill. The Bill proposes to extend the personal liability of directors to the corporation’s unpaid employee superannuation guarantee entitlements. Company Directors is particularly concerned about the application of the extended penalty regime to new directors.

In summary, despite recent amendments to the proposed measures, the Australian Institute of Company Directors is of the view that:

• the Bill still applies to all directors of Australian companies (registered under the Corporations Act 2001), not just to directors of companies suspected of phoenix activity;

• the Bill makes directors personally liable for the company’s unpaid superannuation guarantee amounts regardless of the directors’ culpability;

• the Bill makes new directors personally liable for the actions of the company even when the person was not a director at the time of the company’s breach;

• the Bill is an over-extension of regulation which is more likely to create issues for directors intent on complying with the law than those who deliberately avoid paying workers entitlements and engage in fraudulent phoenix activity; and

• the Bill is contrary to the spirit of, and the Government’s commitment to, the COAG reforms which are designed to reduce the burden of director liability in Australia to ensure we have a governance system that focuses more on performance than conformance.

Download our Submission on the Tax Laws Amendment (2012 Measures No. 2) Bill 2012 (PDF 4MB)