Phoenix companies
The Chief Commissioner can under certain conditions recover the unpaid tax of corporations from the directors, or former directors of a business.
The provisions apply if a corporation fails to pay an assessment amount in accordance with a notice of assessment issued by the Chief Commissioner. The Chief Commissioner may then serve a notice (called a compliance notice) on any person who:
a) is a director of the corporation, or
b) was a director of the corporation at the time when the corporation first became liable to pay the payroll tax included in the assessment amount, or at any time afterwards (a former director).
A compliance notice advises the director or former director that failure to pay makes them and the corporation jointly and severally liable for the amount. A failure to pay an assessment can be rectified if:
a) the assessment is paid, or
b) the Chief Commissioner makes a special arrangement with the corporation, or
c) the Board of Review waives or defers the liability, or
d) an administrator is appointed under Part 5.3A of the Corporations Law, or
e) the corporation begins to be wound up within the meaning of the Corporations Law.
If a special arrangement or deferred amount is not paid as required, the Chief Commissioner may issue a further compliance notice. A director or former director who pays the debt is indemnified by the corporation and may recover the debt from any other director or former director.
It is a defence to the recovery of an assessment amount from a director, or former director if the director, or former director, establishes that he or she:
a) took all reasonable steps to ensure that the corporation rectified the failure to pay the assessment amount, or
b) was unable, because of illness, or for some other similar good reason, to take steps to ensure the corporation rectified that failure.
