Can a DPN include GST?
Short answer
Yes. A director penalty notice can include the company's net GST, along with luxury car tax and wine equalisation tax, for tax periods from April 2020 onward. GST sits alongside PAYG withholding and super guarantee charge as the three company debts that can become a director's personal liability. Income tax and PAYG instalments are not covered. See the director penalty notice guide.
Which BAS amounts are in, and which are out
A BAS can carry several different liabilities, and only some of them can end up in a DPN.
| BAS label | In a DPN? |
|---|---|
| GST net amount (GST collected less credits) | Yes |
| PAYG withholding from wages | Yes |
| Luxury car tax, wine equalisation tax | Yes |
| PAYG income tax instalments | No |
| FBT instalments | No |
The GST figure is the net amount for the period. If the company had more credits than GST collected, there is no GST liability to penalise for that period. The rest of the company's BAS debt is still owed, and the ATO can still chase the company for it, but it does not attach to you through a DPN.
The 3 month rule for GST
Whether the GST amount is lockdown or non-lockdown depends on when the BAS was lodged, not on when it was paid.
- BAS lodged within 3 months of its due date: non-lockdown. The penalty can be remitted within 21 days by the company paying, or by appointing an administrator or restructuring practitioner, or by liquidation.
- BAS lodged more than 3 months late, or never lodged: lockdown. Only payment removes the penalty.
If the company has not lodged at all, the ATO can estimate the GST and issue a DPN for the estimate. Estimates are treated as never reported, so they are lockdown from the start. Lodging the real figures may reduce the amount but does not change the lockdown status.
GST on a DPN? Get your options checked
A specialist can separate what is lockdown from what is not and tell you what the company can still do.
What this means for a company with GST debt
Since GST came into the regime, a business that is behind on BAS can generate a personal liability for its directors far faster than most expect. A single quarter of unpaid GST and PAYG withholding can easily be tens of thousands of dollars, and the two amounts land in the same notice.
Questions that usually matter:
- Are all BAS lodged, even if unpaid? Lodging on time keeps GST and PAYG withholding non-lockdown and preserves your options.
- Can the company pay the GST portion first? Every company payment reduces the director penalty by the same amount.
- Is a company payment plan realistic? A payment plan does not remit a DPN, but it usually stops enforcement while it is kept.
For what happens to the company itself when GST goes unpaid, see what happens if you don't pay GST.
What to do next
- Check every BAS is lodged, including ones the company cannot pay, so future GST amounts stay non-lockdown.
- List each unpaid BAS by period with its lodgement date and work out which GST amounts are already lockdown.
- Talk to an adviser about whether the company can pay the DPN amounts first, or whether an insolvency option protects you.
Related questions
Does a DPN cover company income tax or PAYG instalments?
No. Director penalties apply only to PAYG withholding, net GST (with LCT and WET) and super guarantee charge. Company income tax, PAYG instalments and FBT are company debts that the ATO recovers from the company. They can still lead to a wind up application, but they do not become your personal debt through a DPN.
Can the ATO issue a DPN for GST it has estimated?
Yes. Where a BAS is not lodged, the ATO can make an estimate of the net GST and the estimate becomes the basis of the director penalty. Because an estimate is treated as an amount that was never reported, it is lockdown and only payment will remit it. Lodging the outstanding BAS is still worth doing, because it replaces the estimate with the actual figure.
GST on a DPN? Get your options checked
A specialist can separate what is lockdown from what is not and tell you what the company can still do.
Get help nowMore questions: 16 Director penalty notice questions questions answered · Full guide: Director penalty notices