The Benefits & the Downsides of an SMSF Setup25 April 2022
Fuel Tax Credit Changes9 May 2022
As of 5 April 2022, new Directors will need to have applied for their Director Identification Number (DIN) prior to their appointment to the position.
Existing directors were required to obtain a DIN prior to the end of the transitional period (30 November 2022), whereas directors of Indigenous Corporation have until 30 November 2023. Failure to do so could result in penalties for non-compliance.
What Is A Director Identification Number?
Previously a company or business was registered through ASIC, where a Tax File Number and an Australian Business Number would be required. These are obtained through the Australian Taxation Office (ATO) and are a critical part of setting up a business or company.
Introduced in November 2021, there will be an additional step introduced in the registering of a company, involving a Director Identification Number (DIN). This director identification number is a unique identifier that a director will apply for once and keep forever.
They were brought in as a part of a broader regulatory strategy to address the issue of phoenixing – this is where controllers of a company deliberately avoid paying liabilities by shutting down indebted companies and transferring assets to another company.
DINs are recorded in a database to be administered and operated by the Australian Tax Office and are made available to the public.
The ATO has the power to provide, record, cancel and re-issue a person’s DIN. A DIN will be automatically cancelled if the individual does not become a Director within 12 months of receiving the DIN.
Who Does A DIN Apply To?
Director ID only applies to companies and corporate bodies registered under the Corporations Act and CATSI Act.
Director ID does not apply to sole traders, partnerships or trusts unless the trust has a corporate trustee.
Deadlines For Applying For A DIN
When the announcement of DINs was made in April 2021, there were set deadlines in place for those involved in profit and not-for-profit entities, as well as for Indigenous Directors. As of 5 April 2022, those deadlines have changed.
For profit entities, the deadline for applying for a DIN under the Corporations Act must be done before your appointment as a director.
For non-profit entities (including those entities registered under the ACNC Act as either private or public companies), you also need to have applied for your DIN before you are appointed as a director.
For new directors of Indigenous Corporations, the same requirements for applying are advised (prior to appointment).
How To Apply For A DIN
All directors must apply for their own DIN. This cannot be done by a third part, unless it can be proven to the Registrar that the director is unable to make the application on their own behalf (such as suffering some sort of incapacity, etc).
There are three ways to apply for a DIN:
- Online application via the myGovID app. This is different to myGov and is the quickest way to obtain a DIN.
- Phone application.
- Paper application (which is the slowest process).
These methods require proof of identity documentation, however, you may be able to use certified copies (witnessed by a Justice of the Peace) if you are using the paper application.