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 will only be able to disclose tax debt information of a business where certain criteria are met. The criteria are set out in the draft Legislative Instrument which must be registered before the ATO can disclose the tax debt information of businesses to CRBs. 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 draft 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.
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 an 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 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.
The measure applies from the day after the date of royal assent and from the commencement date of the Legislative Instrument.

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