New Zealand markets open in 2 hours 8 minutes
  • NZX 50

    +44.95 (+0.37%)

    -0.0033 (-0.52%)

    -25.90 (-0.33%)
  • OIL

    +0.58 (+0.79%)
  • GOLD

    +3.00 (+0.16%)

Two weeks to avoid $13,000 tax fine

Australian money notes. People walking in Sydney NSW. Fine concept.
Aussies have two weeks left to avoid a hefty fine from the Australian Taxation Office. (Source: Getty)

The Australian Taxation Office (ATO) has brought in new rules for Aussies who are directors of companies, and there are just two weeks left to avoid a $13,000 fine.

It is now mandatory for Aussies who are company directors covered by the Corporations Act to have a director ID. However, the ATO has said it will apply a grace period for people who apply by December 14.

According to the Australian Business Registry Services (ABRS) - the government body rolling out the scheme - more than 1.8 million directors have now applied for their director IDs. But there are still around 700,000 directors yet to apply.

ABRS registrar Chris Jordan said it would apply a “pragmatic compliance approach” to directors who applied by December 14, instead of the previous November 30 cut-off.

“Whilst penalties or offences can apply, the community can expect ABRS to take a reasonable approach to support people to apply,” Jordan said.

The director ID is a unique, 15-digit identifier designed to stop illegal activities.

“By applying for a director ID, you’re helping to protect the community from those doing the wrong thing - for example, illegal phoenix activity, which is estimated to cost the community up to $5 billion a year,” Jordan said.

Who needs to apply?

The rules apply to all Australian directors, including companies, small businesses, trustees of self-managed super funds, charities and not-for-profit organisations. You do not need a director ID if you are running a business as a sole trader or partnership.

You can apply online through the ABRS website, which will issue you with a director ID instantly once you complete your application.

If you’re unsure if you need to apply, you can check the ABRS website or talk to your registered tax agent.

However, the ABRS said you would need to apply for a director ID on your own behalf and verify your identity. Tax agents cannot apply on your behalf.

Follow Yahoo Finance on Facebook, LinkedIn, Instagram and Twitter, and subscribe to the free Fully Briefed daily newsletter.