What is Phoenixing?
Illegal phoenix activity involves the deliberate and systematic
stripping and transferring of assets from one company to another
company to avoid paying liabilities, such as tax or superannuation.
In these circumstances, the company directors strip out the
cash and assets, liquidate the company and then re-commence the
same or a similar business through a new corporate entity.
A 2018 report prepared for the Phoenix Taskforce estimated that
the direct costs to the Australian economy resulting from illegal
phoenix activities, is between $2.85 billion to $5.13 billion.
Proposed Measures to Combat Phoenixing
On 13 February 2019, the Treasury Laws Amendment (Combatting
Illegal Phoenixing) Bill 2019 (Phoenixing
Bill) was introduced into Parliament proposing to give
ASIC, liquidators and the ATO significant new powers designed to
help curtail phoenix activities and prosecute culpable directors
and associated persons.1
