<div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>A sinister </span><a href="https://www.9news.com.au/tax" rel="" target="" title="tax loophole"><span>tax loophole</span></a><span> which has left thousands of vulnerable Australians with secret debts could soon be closed by the federal government.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Perpetrators are taking advantage of the tax system with a little-known form of economic abuse known as "coerced directorships" – and it can cost people millions of dollars in fines.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Coerced directorships are a complicated type of financial abuse and typically involve abusive partners forcing or convincing victim-survivors to become a co-director or sole director of a business that they control.</span></div></div><div><div id="adspot-mobile-medium"></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE:</span></strong><span> </span><a href="https://www.9news.com.au/national/paul-tingaud-french-traveller-trying-to-get-to-australia-without-flying-stuck-in-malaysia-exclusive/9201a390-4762-435b-a260-1af6fdc6fb01" rel="" target="_blank" title="French traveller stuck in Malaysia while trying to make it Australia"><strong><span>French traveller stuck in Malaysia while trying to make it Australia</span></strong></a></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><em><strong><span>Do you have a story? Contact</span></strong></em><span> </span><strong><em><span>reporter April Glover at</span></em></strong><span> </span><a href="mailto:april.glover@nine.com.au" target="" title="april.glover@nine.com.au"><em><strong><span>april.glover@nine.com.au</span></strong></em></a></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Sometimes, it even happens fraudulently without the victim's knowledge.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>It can lead to tax debts that quietly accumulate over years, hefty fines or liability for "corporate misconduct".</span></div></div><div><div class="OUTBRAIN" data-reactroot="" data-src="//www.9news.com.au/national/gender-based-violence-coerced-directorships-what-is-it-how-to-get-help-everything-to-know-explained/487aeff4-33b3-4f13-b90d-1aa4885a58bb" data-widget-id="AR_5"></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>According to senior lecturer at the Department of Business Law and Taxation at Monash University, Vivien Chen, the impact of this economic abuse is "largely hidden" in Australia.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><a href="https://classic.austlii.edu.au/au/journals/UNSWLawJl/2024/5.html" rel="" target="_blank" title="Chen said"><span>Chen said</span></a><span> abusers have been known to take "control of a business run by the victim survivor and [sabotage] the business or [siphon] off its assets".</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"Economic abuse through business debts can occur after separation or divorce and victim-survivors have told of being pressured to sign documents while unaware of their legal consequences amidst threats by the perpetrator to cut off financial support to them and their children," Chen said.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"The perpetrator takes the funds and the benefit of those contracts, at times resigning as co-director, leaving the victim survivor with the debt.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"In the words of one victim survivor, 'He had disappeared, so all the creditors were chasing me for the debts from the business – they couldn't find him'."</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Chen said she knew of no studies or research on this form of economic abuse.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Australian women are particularly vulnerable to it due to the sheer volume of family-owned businesses in the country.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Victims now also risk up to $1.375 million in fines due to recent corporate law reforms, Chen said. </span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Chen and the Economic Abuse Reference Group (EARG) have jointly called for sweeping reforms to stop perpetrators in their tracks.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Among the proposed changes are an amendment to the Corporations Act 2001 to include family violence as a legitimate reason for absence from management and an amendment to the Taxation Administration Act 1953 to include family violence as a defence from liability.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE:</span></strong><span> </span><a href="https://www.9news.com.au/national/vending-machine-business-why-australians-are-buying-selling-snack-machines-for-extra-income/1999b07f-1822-400d-a5bb-e249b5728d6c" target="_blank"><strong><span>Why thousands of Australians are buying and selling snack vending machines</span></strong></a></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE: </span></strong><a href="https://www.9news.com.au/meet-the-team/digital/april-glover#:~:text=Professor%20flooded%20with%20death%20threats%20after%20what%20he%20wants%20banned%20from%20Queensland" target="_blank" title="Professor flooded with death threats over what he wants banned from Queensland"><strong><span>Professor flooded with death threats over what he wants banned from Queensland</span></strong></a></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Assistant Treasurer Daniel Mulino today said the government aimed to crack down on the "dodgy use of directorships by perpetrators".</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"Too many people have been left with liabilities they never agreed to and penalties for decisions they never made," Mulino said.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"Our goal is to build a system that protects people from exploitation and ensures perpetrators cannot hide behind corporate structure."</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>A newly released consultation paper has delivered some options for how legislation may stop financial abusers exploiting Australia's tax system.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>This includes strengthening the Australian Securities and Investments Commission's (ASIC) powers to remove non-consenting company directors and making it easier for victims to engage with the Australian Tax Office (ATO).</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The report also suggests stronger criminal consequences for fraudulent or coerced director appointments.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Submissions to the consultation will close on December 24.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><h3><strong><span>Is economic abuse a crime in Australia?</span></strong></h3></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>In Australia, economic abuse or financial abuse can be considered a crime it if involves fraud, theft or coercive control.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Every Australian state and territory also recognises that economic abuse is a type of domestic violence.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>And every state and territory has a form of a domestic violence order which is designed to protect victims.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>According to the Centre for Women's Economic Safety, these orders aren't often used to protect money or assets but you may be able to request this if necessary.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Currently, there is no legislation that specifically outlaws "coerced directorships".</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>Support is available from the</span></strong><span> </span><strong><span>National Sexual Assault, Domestic and Family Violence Counselling Service</span></strong><span> </span><strong><span>at</span></strong><span> </span><a href="https://www.1800respect.org.au/" title="https://www.1800respect.org.au/"><strong><span>1800RESPECT (1800 737 732)</span></strong></a><strong><span>.</span></strong></div></div>