15 October 2021
Directors of companies will soon have to enrol in the Director Identification Number regime. This requires that current and future directors apply for director identification numbers (DIN) which will be permanently linked to the individual and not be reissued, even if they are no longer directors.
It is hoped the regime will make it easier to trace relationships across companies and reduce instances of illegal activity. Most existing directors will have until 30 November 2022 to apply for the DIN through the ATO.
While this regime was introduced in late 2020, the government has recently introduced an instrument that extends the time available for those eligible to apply for a director identification number (DIN). Individuals who operated under the Corporations Act and became a director on or before 31 October 2021 must apply for a DIN before the end of the transitional period, which is between 4 April 2021 to 30 November 2022.
Directors operating under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 and became a director on or before 31 October 2021 will have even more time, these individuals will have until the 30 November 2023 to apply for a DIN (the transition period is 4 April 2021 to 30 November 2023). Any appointed directors between 1 November 2021 and 4 April 2022 will have to apply for the DIN within 28 days of appointment. From 5 April 2022, individuals seeking to become directors will need to apply for a DIN before their work begins.
To prevent the regime’s abuse, any conduct that would be considered to undermine the DIN requirement will be subject to civil and criminal penalties. This will include:
- Deliberately providing false identity information.
- Intentionally providing a wrong DIN.
- Consciously applying for multiple DINs.
Although we’re currently in the transitional period, directors don’t need to do anything yet. Now, the ATO is testing the new DIN application process in private beta to ensure the new system works as intended. It notes that once the testing process is complete, directors will use the new Australian Business Registry Services (ABRS) online services to register.
Sign-ins and director identity verification will be conducted using the myGovID app. This app requires a compatible smart device and individuals to enter personal details and verify at least two Australian identity documents (i.e., driver’s licence, birth certificate, citizenship certificate, passport, etc.) to obtain the “standard identity strength”. The “strong identity strength”, which is currently in the testing phase, will require the completion of an additional face verification check.
Be ready.
If you’re already the company director under the Corporations Act, you will have until 30 November 2022 to register for a DIN. If you’re thinking of becoming a director, you’ll have substantially less time. So, it’s prudent to do the necessary prep work now. Contact us at our offices or email enquiries@rm.net.au today if you need help.
**The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.
