The Federal government’s long touted Director Identification Numbers (DIN) are finally taking form.
The DIN scheme is part of a suite of reforms being implemented as part of the 2020 Budget Digital Business Plan known as the Modernising Business Registers (MBR) program.
The MBR program will establish the new Australian Business Registry Services (ABRS) which is intended to streamline the registration, viewing and maintenance of business information with the Federal government. This will include the consolidation of more than 30 ASIC registers and the Australian Business Register (which is the register of ABNs) and introduce the DIN initiative. The MBR program is being implemented by the ATO.
The DIN scheme is one of the ways in which the Federal government is seeking to identify and prosecute (and thereby, reduce) unlawful phoenix activity.
What is a DIN?
A DIN is a unique identifier that an individual will apply for once and keep forever.
The purpose of the DIN is for individuals to identify themselves with the Federal government. Accordingly, directors must apply for their DIN themselves – no one can apply on their behalf.
Who needs a DIN?
Any individual who is a director of:
- a company;
- a registered foreign company;
- a registered Australian body (that is, a state body corporate that is registered with ASIC to trade throughout Australia); or
- an Aboriginal and Torres Strait Islander corporation;
will need to have a DIN.
- directors of the above entities that are also registered charities; and
- directors of corporate trustees, such as directors of SMSF trustees.
However, you do not need to have a DIN if you are:
- a management committee member of an incorporated association; or
- a director of an entity that is a body corporate pursuant to the Religious, Educational and Charitable Institutions Act of 1861;
unless that entity is a registered Australian body with ASIC.
I am a current director – what do I need to do and by when?
Individuals who are currently directors and were appointed before 01 November 2021, have until 30 November 2022 to obtain a DIN.
I am not yet a director but will be appointed soon – what do I need to do and by when?
For the first 5 months of the scheme, i.e. until 04 April 2022, newly appointed directors who do not yet have a DIN will have an grace period of 28 days after their appointment to obtain a DIN.
After that though, a person must have a DIN before they are appointed as a director.
It is possible in limited circumstances to seek an extension of time, if necessary.
How to get a DIN
The application process is as follows:
Step 1: Get the MyGovID app
You will need to apply for a DIN online utilising the MyGovID app.
The app is a means of identifying yourself with the Federal government and, if you haven’t set it up already, will require you to upload certain identification documents.
Step 2: Gather your documents and complete registration process via the ABRS website
You will need to collect the following in order to apply for the DIN:
- you tax file number;
- your residential address held by the ATO; and
- information from two documents to verify your identity, such as:
- bank account details;
- ATO notice of assessment;
- Super account details;
- a dividend statement;
- a Centrelink payment summary; or
- PAYG payment summary.
Step 3: Complete and lodge Director ID application form
From 1 November 2021, you can then login via the ABRS website and apply for your DIN.
What happens if I don’t get one?
Large penalties will apply if you fail to obtain a DIN when required. For example:
- a director of a company, a registered foreign company or a registered Australian body may face penalties of up to:
- 5,000 penalty units – which is currently $1,050,000; or
- the higher of 3 times the benefit derived or detriment avoided because of the failure;
- a director of an Aboriginal and Torres Strait Islander corporation may face penalties up to $200,000.
So, what now?
We recommend that in readiness for the scheme, if you don’t already have the myGovID app, that you download the app on either iOS (for Apple devices) or Google Play (for Android devices) and go through the motions to identify yourself with the Federal government.
You can also keep an eye on the ABRS website to check for any updates and stay up to date with our usual news.
If you have any questions regarding the scheme, or require any assistance, please let us know.