New measures to combat illegal phoenixing (March 2020 Client Alert)

| Accounting

When a new company is setup to continue the business of an old company and in doing so avoid paying debts of the old company, this is “phoenixing”. New laws target illegal phoenixing in order to help Australian businesses, employees and governments avoid the estimated up to $5billion per year costs of illegal phoenix activities.

 

The new laws attempt to mitigate debt and tax evasion by preventing property transfers to defeat creditors, improving the accountability requirements for resigning company directors, allowing the ATO to collect estimates of anticipated GST liabilities and authorising the ATO to retain tax refunds where lodgements are outstanding.

 

To see other March 2020 Client Alerts, go here.

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