Tax Laws Amendment (2012 Measures No. 2) Act 2012 (99 of 2012)

Schedule 1   Companies' non-compliance with PAYG withholding and superannuation guarantee obligations

Part 1   Recovery of penalties

Division 1   Amendments applying to future and undischarged penalties

Taxation Administration Act 1953

2   Subsections 269-35(1) to (4) in Schedule 1

Repeal the subsections, substitute:

Illness

(1) You are not liable to a penalty under this Division if, because of illness or for some other good reason, it would have been unreasonable to expect you to take part, and you did not take part, in the management of the company at any time when:

(a) you were a director of the company; and

(b) the directors were under the relevant obligations under subsection 269-15(1).

All reasonable steps

(2) You are not liable to a penalty under this Division if:

(a) you took all reasonable steps to ensure that one of the following happened:

(i) the directors caused the company to comply with its obligation;

(ii) the directors caused an administrator of the company to be appointed under section 436A, 436B or 436C of the Corporations Act 2001;

(iii) the directors caused the company to begin to be wound up (within the meaning of that Act); or

(b) there were no reasonable steps you could have taken to ensure that any of those things happened.

(3) In determining what are reasonable steps for the purposes of subsection (2), have regard to:

(a) when, and for how long, you were a director and took part in the management of the company; and

(b) all other relevant circumstances.

When you can rely on this section

(4) For the purposes of:

(a) proceedings in a court to recover from you a penalty payable under this Division; or

(b) proceedings in a court against you in relation to a right referred to in paragraph 269-45(2)(b) (directors jointly and severally liable as guarantors);

subsection (1) or (2) of this section does not apply unless you prove the matters mentioned in that subsection.

(4A) For the purpose of the Commissioner recovering from you a penalty payable under this Division (other than as mentioned in subsection (4)), subsection (1) or (2) does not apply unless:

(a) you provide information to the Commissioner during the period of 60 days starting on the day the Commissioner:

(i) in the case of the Commissioner recovering the penalty under section 260-5 (Commissioner may collect amounts from third party) - gives you a notice under subsection 260-5(6) in relation to the penalty; or

(ii) otherwise - notifies you in writing that he or she has recovered any of the penalty; and

(b) the Commissioner is satisfied of the matters mentioned in subsection (1) or (2) of this section on the basis of that information.