As part of the Australian Government’s initiative to harmonise personal criminal liability for corporate fault across Australian jurisdictions, the third tranche of the Government’s director liability reform proposes to repeal various provisions of Commonwealth tax legislation.

On 14 August 2012, the Treasury released the third and final tranche of the Personal Liability for Corporate Fault Reform Bill 2012 (the Bill) for public comment, as part of the Australian Government’s initiative to implement the agreed Council of Australian Governments (COAG) principles on director liability reform.  This follows the release of the first tranche of reforms on 27 January 2012 and the second tranche of reforms on 1 June 2012, with the first two tranches focusing on non-tax legislation.

The third tranche of the Bill contains amendments to Commonwealth tax legislation identified in an audit conducted of all Commonwealth legislation against the COAG principles.  Personal criminal liability for directors is proposed to be removed by repealing: the following provisions which impose absolute liability on directors for taxation offences committed by their companies:

  • sections 444-15 of Schedule 1 to the Taxation Administration Act 1953 (Cth);
  • section 252(1)(j) of the Income Tax Assessment Act 1936 (Cth); and
  • subsection 57(7) of the Superannuation Guarantee (Administration) Act 1992 (Cth).

Due to the unique function of the public officer of a company, the liability of public officers is proposed to be retained.

The Australian Government intends to introduce the final Bill, incorporating amendments from all three tranches, to Parliament by the end of the year.

Submissions closed on 3 September 2012.

See the Treasury’s media release, dated 14 August 2012.