July 15, 2022

DIN Compliance Reminder

As a part of a broader regulatory strategy to address the issue whereby controllers of a company deliberately avoid paying liabilities by shutting down indebted companies and transferring assets to another company, the Australian Taxation Office (ATO) introduced Director Identification Numbers (DIN). This new is a unique identifier that a Director will apply for once and keep forever. With the transitional period flying by, this is your compliance reminder.

As of 5 April 2022, new Directors need to have applied for their Director Identification Number (DIN) prior to their appointment to the position, and existing Directors are required to obtain a DIN prior to the end of the transitional period (ends on 30 November 2022) or 30 November 2023 if the Director is of an Indigenous Corporation. Failure to do so could result in penalties from the ATO, up to the value of $13,320 for non-compliance.

What Is A Director Identification Number?

Previously a company or business was to be registered through ASIC, where a Tax File Number (TFN) and an Australian Business Number (ABN) would be required. Obtained separately through the ATO, TFNs and ABNs are a critical part of setting up a business or company.

An additional step was introduced to this process in November 2021, which announced the inclusion of a Director Identification Number (DIN). This Director Identification Number is a unique identifier that a Director will apply for once and keep forever.

DINs are recorded in a database to be administered and operated by the ATO and are made available to the public to help existing companies and businesses protect themselves against the  issue of phoenixing. Phoenixing is where controllers of a company deliberately avoid paying liabilities by shutting down indebted companies and transferring assets to another company. 

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.

Do I need a DIN? 

DIN registration only applies to companies and corporate bodies registered under the Corporations Act and CATSI Act. If you are a sole trader, partnership, or trust, you do not require a DIN, unless the trust has a corporate trustee. 

Registration Deadlines

When DINs were first announced in April 2021, deadlines were communicated 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 entity application deadline is prior to your appointment as Director. 
  • Non-profit entity (including those entities registered under the ACNC Act as either private or public companies) application deadline is also prior to your appointment as Director. 
  • New Directors of Indigenous Corporations are also advised to apply prior to appointment.

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How To Apply For A DIN

Directors must apply for their own DIN – it cannot be done by a third party, 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, all of which require proof of identity documentation:

  • Online – via the myGovID app (this is the quickest way to obtain a DIN)
  • Phone – if you’re in Australia, call 13 62 50 and if you’re calling from overseas, call +61 2 6216 3440
  • Paper – complete the DIN application form and provide certified copies of your identity verification documents witnessed by a Justice of the Peace (which is the slowest process).

Whilst only you can apply for your DIN, if you’re a Director looking to understand your company finances, contact us today. Our team of experts will partner with you for the long term to provide customised, strategic advice that helps you make better, more informed decisions.

Filed Under: Business Advisory, Compliance, Structure

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