Tax Tips: Directors Identification Numbers
Written by: Evan Lowenstein
Directors Identification Numbers (Directors ID)Recent legislation has introduced new obligations for company directors requiring them to obtain a personal director identification number (‘Director ID’).
What is a Director ID?
A Director ID is a unique (15-digit) identifier that a director will keep forever (even if they cease being a director). This additional layer of identification verification has been primarily introduced by the Government to prevent the appointment of fictitious directors, and facilitate traceability of an individual director’s profile and their relationships with companies over time.You will need to personally apply for a Director ID if you are an appointed company director (or even an alternative director). Note this also includes where you are a director of a company acting as a trustee (such as the corporate trustee of your SMSF or family trust). Importantly, while our office can help you in understanding your new Director ID obligations, we are not permitted to make the application on your behalf (although we are happy to assist if and when required).
How do I apply for a Director ID?
Each individual director must apply for their own Director ID directly, to verify their identity via the ABRS website (abrs.gov.au), where you will click on the heading Apply for your Director ID.For most directors, the three-step registration process can be done online and reasonably efficiently (i.e., in less than five minutes) provided you have all of the required documentation.
Step 1 – Set-up a myGovID (with a standard or strong identity strength)
A myGovID is different from myGov and is obtained by downloading and applying via the myGovID app to your smart device.
Step 2 – Gather the documents required for identification
To apply for your Director ID, you will need to have access to additional information the ATO knows about you such as your tax file number (TFN) and your residential address (linked to the ATO’s records).
Step 3 – Complete your application
Once you have a myGovID with a standard or strong identity strength, and information to verify your identity at hand, you can log in and apply for your Director ID at the icon you see reproduced below for your reference.
Effective Dates
The date that you need to apply is based on the date when you became a director:On or before 31 October 2021: 30 November 2022
Between 1 November 2021 and 4 April 2022: Within 28 days of appointment
From 5 April 2022: Before appointed director
Since there is another year to go before this requirement becomes effective, Lowensteins will be communicating directly with our clients early next year to further advise and remind them of this important requirement.