Our longstanding expectation of large business and privately owned and wealthy taxpayers with a disputed debt is that they either pay their debt in full or enter into a 50:50 arrangement. This expectation is detailed in Practice Statement Law Administration PS LA 2011/4 Collection and recovery of disputed debts.
We’ll be engaging more actively with privately owned and wealthy groups about this expectation.
A disputed tax debt is one that’s being challenged through an objection, review, or appeal. You have the right to dispute a tax decision. However, disputing a decision does not remove your obligation to manage and pay the debt while you’re resolving the dispute with us.
Why it’s important to act early and engage with us
Waiting for the outcome of a dispute before managing a debt can increase your costs. While a dispute is underway:
- general interest charge (GIC) generally continues to apply (this is not tax deductible)
- the total debt can increase.
We encourage you to contact us as early as possible when we issue an assessment or amended assessment that results in a debt. Early engagement allows us to discuss your obligations and available payment options. Refer to resolving disputes for more information.
Supporting a fair tax system
Paying tax debts on time and in full helps maintain the integrity of the tax system. It also supports fairness for businesses and individuals who meet their tax obligations. While disputes are underway, we consider the circumstances of each case. In some situations, including where there’s a heightened risk to revenue, we may take recovery action before the dispute is finalised.
Working together early can provide greater certainty to help manage debts sooner.
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