A Director Identification Number (DIN) regime is due to be implemented for company directors in Australia. The objective of the new system is to promote good corporate conduct, and its existence comes into effect following legislation receiving Royal assent.
The Commissioner of Taxation has been appointed as the Commonwealth Registrar and they have announced the DIN registration system will commence in November 2021.
Under the legislation the system is required to be operational within 2 years of receiving Royal assent, 22 June 2022.
Transitional rules/current directors
In September 2021, a Commonwealth government instrument was finalised that announced that existing directors of Australian companies will have until 30 November 2022 to register for a DIN.
For individuals who are directors under the Corporations (Aboriginal and Torres Strait Islander) Act, the transitional period to register is extended to 30 November 2023.
From the transitional period start date of 1 November 2021, any new directors will have 28 days to register after an appointment. This transitional period for new directors is in effect until 4 April 2022. After this date, new directors will require a DIN before appointment, or when instructed to apply by the registrar.
The table below provides further details on the transitional period.
Date of appointment of directorship
Due date for application of DIN
On or before 31 October 2021
By 30 November 2022
Between 1 November 2021 and 4 April 2022
Within 28 days of appointment
From 5 April 2022
Before appointment
Requirements
An individual who is a director or an acting alternate director is required to obtain a DIN. At the initial stage of this regime, no other officeholders will be required to register. However, this may change with the abilities of the registrar to keep additional registers in the future.
Four obligations will exist for individuals who are appointed as a director, being:
requiring them to apply for a DIN before being appointed as a director
requiring them to apply for a DIN within 28 days of being directed by the registrar to apply for a DIN
prohibiting a person from knowingly applying for multiple DINs, and
prohibiting a person from misrepresenting a DIN to a government body or registered body.
A transitional rule will apply for the first 12 months of operation of the new legislation. A new director will have 28 days after an appointment to register for a DIN.
A person may apply for a DIN if they are not a director but intend to become a director within the ensuing 12 months. It is not compulsory for a person to do this, but nevertheless they are allowed to. However, the DIN allocated to a prospective director will be cancelled if the person does not become a director within 12 months of issue.
Identification of directors
A key component of the DIN register is to be able to separately identify different directors by giving them a unique identifier.
In order to do this, the ATO (as the new registrar) will be required to collect information to identify individual directors. The draft instrument has listed the following pieces of information:
the individual’s names and former names
the individual’s addresses and former addresses
the individual’s contact details, and
the individual’s date and place of birth.
Additions to ITAA 1936 s 202 will allow the ATO (as the new registrar) to request the tax file number (TFN) of an individual in order to verify their identity. It should be noted that, like other applications, it is not mandatory for an individual to quote their TFN, if they have one. However, not quoting the TFN may delay the application process.
Further, the instrument states that the ATO (as the new registrar) may request and collect identity documents or information evidencing the individual’s identity.
The Commissioner of Taxation has been appointed the Commonwealth Registrar in charge of the DIN process. The new online service for DIN registrations is due to be available in November 2021. All of ASIC’s business registers and the ABR will be integrated over time into one system at the ATO.
Therefore, it should be acknowledged that any forms that are lodged on behalf of directors relating or applying to DINs would need to have the same standards applied to them as what already exist for an ABN or ACN application.
