Directors’ personal liability for company’s unpaid GST

by | May 31, 2021

CFOs NEED TO ACT! The tax law now imposes personal liability on company directors for company GST arrears. As CFO you need to give your directors certainty; it’s imperative the company is paying the right amount of GST. Is your company 100% GST compliant?
Test your compliance against the ATO’s 36 tests to make sure. Our GST guide on how you can now confidently reassure your directors is available here.


The Treasury Laws Amendment (Combating Illegal Phoenixing) Act 2020, strengthened preventions against the notorious practice of creditor-defeating disposals of companies (so-called phoenixing). However, it also expanded the number of tax obligations of any company, for which its directors are now personally liable, to include unpaid:

  • GST
  • Luxury Car Tax (LCT)
  • Wine Equalisation Tax (WET)

Both LCT and WET are administered under the GST system.

Directors’ personal liability for these unpaid amounts is in the form of a penalty under the Directors Penalty Regime (DPR).

The risk of personal liability for unpaid company GST (including LCT and WET) adds to directors’ existing risks under the DPR for PAYG amounts and Super Guarantee Charges unpaid by the company.

Directors’ liability for unpaid taxes under the DPR may be remitted if the directors have promptly put the company into voluntary administration of liquidation.

For many businesses, achieving 100% assurance of GST compliance is virtually impossible without sophisticated data analysis informed by expert experience and applied by modern technologies. ICGTAX’s expertise and RAMPARTTM tool assists our clients to achieve the required assurance. Our GST guide on this aassurance is available here.


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