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  • Disclosure of business tax debts

    On 22 October 2019, the Government passed law which allows the Australian Taxation Office (ATO) to disclose tax debt information of businesses to registered credit reporting bureaus (CRBs). The law received royal assent on 28 October 2019.

    Under the law, the ATO can only disclose tax debt information of a business where certain criteria are met. The criteria are set out in the legislative instrument which was registered on 23 December 2019 with a commencement date of 21 February 2020. The Commissioner is not obligated to disclose tax debt information and will apply administrative safeguards above and beyond the legislative safeguards in the bill and legislative instrument, before reporting the tax debt information of a business.

    Businesses which are engaging with the ATO to manage their tax debts will not have their tax debt information reported to CRBs.

    In the current environment our focus is on administering the Government’s stimulus measures and supporting businesses and the community during the COVID-19 outbreak. Therefore, we will not be disclosing business tax debt information at this time. We remain committed to delivering this at the right time.

    The purpose of allowing the ATO to report the tax debt information of a business to CRBs is to:

    • encourage businesses to engage with the ATO to manage their tax debts and, where a business is unable to pay a tax debt in full by the due date, enter a sustainable payment plan that is agreed between the ATO and the business
    • support more informed decision making within the business community by making large overdue tax debts more visible, and
    • reduce the unfair advantage obtained by businesses that do not pay their tax on time and do not engage with the ATO in managing their tax debts.

    The ATO will only disclose tax debt information of a business to a CRB if the business meets all of the following criteria:

    • it has an Australian business number (ABN), and is not an excluded entity
    • it has one or more tax debts, of which at least $100,000 is overdue by more than 90 days
    • it is not effectively engaging with the ATO to manage its tax debt, and
    • the Inspector-General of Taxation and Taxation Ombudsman is not considering an ongoing complaint about the proposed reporting of the entity's tax debt information.

    The ATO will notify a business in writing if they meet the reporting criteria and give them 28 days to engage with the ATO and take action to avoid having its tax debt information reported.

    The ATO will only provide information to CRBs if they are registered with the ATO and have entered into an agreement detailing the terms of the reporting.

    Consultation on how the ATO intends to administer the measure closed on 6 September 2019.

    Legislation and supporting material

    See also:

      Last modified: 06 Aug 2020QC 51737