By Kim Reynolds
On 15 April 2021, the Commissioner of Taxation issued a legislative instrument “Corporations Director Identification Number Data Standard 2021”, that brings the implementation of Director Identification Numbers one step closer. This legislative instrument is part of the Modernising Business Registers (MBR) program that was announced in the 2020 Federal Budget.
The purpose of the Director Identification Numbers (DIN) program is primarily to deter and penalise illegal phoenixing of companies. However, the DIN program will have a much wider impact as it will require all directors to confirm their identity and be issued with a DIN. As such, it is important that current directors, and those contemplating holding director positions, understand these new obligations as there are both criminal and civil penalties for non-compliance.
Who has to apply?
The DIN requirements apply to appointed directors and acting directors of Australian companies and registered foreign companies under the Corporations Act 2001.
An individual can only have one DIN, however, once issued, the DIN will apply to the individual permanently (even if they cease to be a director).
What information will be required?
To obtain or update an individual’s DIN, the following information will be required:
- Name and former names
- Address and former addresses
- Contact details (phone, mobile etc)
- Date and place of birth
- Tax File Number (can be requested but not required to be provided)
- Identity documents*
*Currently this information includes drivers’ licence, passport, birth certificate, Australian visa, and Medicare card, however, additional documents may be accepted in the future.
How will the DIN be applied for and the information be collected?
Generally, the information will be collected electronically, however, there may be circumstances where paper applications may be accepted. For example, foreign directors or directors that are unable to obtain a digital identity credentials may need to provide paper-based documents which may include certified copies of identity documents.
The individual will need to complete the DIN application on their own behalf. However, where the individual is unable to make an application, for example, due to disability, an agent or third party may be permitted assist (it appears this will be addressed on a case-by-case basis).
When do directors need to provide information regarding their DIN?
Individuals will have 28 days from the date they are appointed director to apply for a DIN. Where individuals are already appointed at the time the law commences, a transitional application period will apply.
An individual can also apply for a DIN where they anticipate they will become a director within the next 12 months.
Criminal and civil penalties can apply where an individual doesn’t comply with the DIN requirements, for example, by:
- Failing to apply for a DIN with the required timeframes (or if the Regulator directs);
- Intentionally apply for more than one DIN;
- Provide a false DIN; or
- Are actively involved in the contravention of any of the above.
The DIN system is now undergoing testing but once complete, it expected that current directors will have until 30 November 2022 to obtain a DIN.
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