1. Changes to Australia’s tax laws “The Changes are part of the Government’s continued commitment to maintaining the integrity, equity and fairness of the tax system” “The Gillard Government is committed to protecting workers’ entitlements”

2. 22 ► Effective 29 June 2012. ► Australian tax laws are reinforced to counter fraudulent phoenix activities and strengthen director’s responsibilities. ► Director’s have an obligation to arrange for their companies to meet Pay As You Go (PAYG) withholding and superannuation obligations. ► Protecting workers’ entitlements. ► Ensures that fraudulent directors who use phoenix companies to try and avoid their debts can be held personally liable for their PAYG withholding and superannuation obligations. ► Improve the regulatory environment for businesses that comply with the tax law. Introduction to the changes of Australia’s tax laws

3. 33 ► Directors may become personally liable for their company’s unpaid superannuation guarantee charge for the quarters ended 30 June 2012 and subsequently, but not prior quarters. ► In addition to estimating unpaid PAYG withholdings liabilities, the Commissioner can now estimate unpaid superannuation guarantee charge. ► The previous law with respect to director penalty notices regarding reported liabilities continue. However, PAYG outstanding as at 29 June 2012 which was not reported within three months of the due date will result in a director penalty that cannot be avoided by placing the company into administration or liquidation. The only way these penalties can be discharged is by causing the company to pay the amounts withheld or to personally pay the amounts. ► In some instances, directors and their associates may become liable to pay the PAYG on their own wages where the company has failed to pay amounts withheld i.e. they wont obtain credit for tax deducted from their salaries where that money has not been remitted to the ATO. ► All PAYG withholding liabilities due after 29 June 2012 will be subject to the ‘new’ regime. Key changes to the director Penalty Notice Regime

4. 44 ► Targets directors of companies that fail to meet their PAYG withholding obligations, including directors of fraudulent phoenix companies who often fail to meet their tax and superannuation obligations. ► Seeks to ensure that directors cause their company to meet certain tax obligations. ► Seeks to ensure that if a company is unable to fund its tax obligations, the director promptly puts the company into liquidation or voluntary administration. Director penalty regime

5. 55 The law has changed to address certain limitations ► The director penalty and estimates regime applying only to PAYG withholding liabilities. ► A director’s ability to achieve remission of director penalties by placing their company into administration or winding up within the director penalty notice period, irrespective of the length of time that the liability has gone unpaid and unreported. ► A director’s ability to benefit from using PAYG withholding credits to offset their own income tax liability when the company had not paid withheld amounts to the Commissioner.

6. Rodgers Reidy (NSW) Pty Ltd ABN 65 711 753 737 is a member of an affiliation of independent companies operating in Australia and New Zealand under the common name Rodgers Reidy. This communication provides general information which is current as at the time of production. The information contained in this communication does not constitute advice and should not be relied on as such. Professional advice should be sought prior to any action being taken in reliance on any of the information. Rodgers Reidy disclaims all responsibility and liability (including, without limitation, for any direct or indirect or consequential costs, loss or damage or loss of profits) arising from anything done or omitted to be done by any party in reliance, whether wholly or partially, on any of the information. Any party that relies on the information does so at its own risk. Liability limited by a scheme approved under Professional Standards Legislation. New South WalesQueensland Level 8 Level 9, River Quarter 333 George Street46 Edward Street Sydney NSW 2000Brisbane QLD 4000 PO Box Q399GPO Box 471 QVB Post Office NSW 1230Brisbane QLD 4001 T: +61 2 9262 1944T: +61 7 3136 5700 F: +61 2 9262 1933F: +61 7 3136 5777 E: RR@rodgersreidy.com.au E: RR@rodgersreidy-qld.com.auRR@rodgersreidy.com.au ChatswoodGold Coast Level 20, Tower A Level 15 Zenith CentreCorporate Centre One 821 Pacific Highway2 Corporate Court Chatswood NSW 2067Bundall QLD 4217 T: +61 2 8448 8172T: +61 7 5641 1414 F: +61 2 9262 1933F: +61 1300 952 155 E: RR@rodgersreidy.com.auE: RRGC@rodgersreidy-qld.com.auRR@rodgersreidy.com.au Victoria Level 3 326 William Street Melbourne VIC 3000 PO Box 13044 Law Courts VIC 8010 T: +61 3 9670 8700 F: +61 3 9642 0525 E: RR@rodgersreidy.comRR@rodgersreidy.com New Zealand Level 1 547 Te Atatu Road Te Atatu Peninsula Auckland 0610 PO Box 45220 Te Atatu Peninsula 0651 T: +64 9 834 2631 F: +64 9 834 2651 E: RR@rodgersreidy.co.nzRR@rodgersreidy.co.nz