Bankruptcy Miscellaneous 2014

The payment of tax debt during bankruptcy proceedings

Source: Taxation In Australia Journal Article

Published Date: 1 May 2014


This article explores the issues surrounding corporate insolvency, the non-remittance of PAYG withholding tax, and the non-remittance of superannuation guarantee charges and civil liability of directors for it. The director penalty regime may ultimately result in bankruptcy proceedings against directors and this article considers the interaction of bankruptcy law with the director penalty regime. Directors of a company will most likely face civil litigation for an unpaid tax debt should the alternative ATO enforcement procedures not succeed.

The Commissioner, in order to enforce the judgment debt, will ultimately commence bankruptcy proceedings in the Federal Circuit Court of Australia by way of creditor’s petition and after an act of bankruptcy has occurred. This article emphasises, with the recent authority of Soong’s case, that it is vitally important for all directors to be vigilant to ensure that the company is meeting its tax obligations, and to take action if it appears that the company is having difficulty paying these amounts.

Sorry, this is subscriber only content.

To gain access to this material and much more - Subscribe Now.

(Note: Members can access Taxation in Australia journal articles without a Tax Knowledge Exchange subscription - please log in to access).

Already a Subscriber? Login now


The material is copyright. Apart any fair dealing for the purpose of private study, research criticism or review, as permitted under the copyright Act, no part may be reproduced by any process without written permission from The Tax Institute.

Unless expressly stated, opinions are not that of The Tax Institute, which accepts no responsibility for the accuracy of any of the information contained within it.

The Tax Institute
(ABN 45 008 392 372 (PRV14016))


The Tax Institute is a Recognised Tax Agent Association (RTAA) under the Tax Agent Services Regulations 2009. 

Copyright Statement

All materials provided on this site are protected by copyright and are owned by or licensed to TTI.

Except as expressly permitted by TTI or the copyright owner, any person or company who uses this site must not use, reproduce, redistribute, retransmit, publish or otherwise transfer, or commercially exploit, the materials or any information, software or other content, in whole or in part, which is available through this site.


Bankruptcy Miscellaneous 2014

Share this page