We are sure you are aware there has been a lot of press recently about the ATO stepping up its activity in respect to the ongoing collection of tax on a timely and efficient basis. Significantly this is not solely focused on large multinationals but also on private family businesses.
The ATO is flexing its muscles and is now less hesitant in using the full extent of the law available to it. In that respect for potential directors, a due diligence process should be undertaken before taking up a directorship, providing the individual with comfort that all matters are being appropriately dealt with. Directors should not only be aware of the taxation obligations of the company but also of its compliance history and status.
Having an effective management plan in place addressing commercial aspects of the business as well as tax and other compliance aspects provides comfort to the directors. It can also provide a strategic plan for the business and provide protocols to deal with governance matters.
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