SMSFs, are you ready for the Director Identification regime?

The beginning of November welcomed a new identification regime from the Australian Tax Office (ATO). With most of us accustomed to the QR code and check-in apps that have come with the pandemic, the Director Identification Number (DIN) is likely just another hoop to jump through.

Launched by the ATO on the 1^st of November, the legislation will require everyone who is a director of any company, including SMSF corporate trustees and corporate beneficiaries, to obtain a DIN. Importantly, this is something that cannot be completed by your accountant, it must be done personally via the ATO portal.

The SMSF Association recently publicised a white paper to assist in navigating the legislation, defining and outlining the process of applying for a DIN.

So, what is it? A DIN is a unique identifier, not dissimilar to a tax file number. Every director will be required to have one, but those with multiple directorships only need to register once. DIN will not change and be in place forever, even if you remove all of your directorships or change your need.

DINs were introduced as part of the Government’s Digital Business Plan, which is an effort to modernise its operations and business registers. Central to the premise is the prevention of false and fraudulent behaviour, and to improve the efficiency of the future registration obligations. Similarly, it will allow the ATO to better trace director activity and relationships, while improving the integrity of the ATO’s data. 

When do I need to apply?

For those that were a director of any company or SMSF trustee before 31 October 2021, they will need to personally register for a DIN before 30 November 2022. If you establish a company between today and the 4^th of April, you will have 28 days to register and from that point onwards you will need to be registered before even setting up an SMSF.

What is the registration process?

Importantly, everyone will need to apply for the DIN personally; accountants and financial advisers are not able to do this on your behalf. There are three key steps:

1. Set up your myGovID if you don’t already have one;
2. Put together your identification information to ensure your accountants can be linked, including your TFN, passport and Medicare card.

Drew Meredith

Drew is publisher of the Inside Network's mastheads and a principal adviser at Wattle Partners.