Improve the transparency of tax debts
Improve the transparency of tax debts
The Government has announced that it will allow the Australian Taxation Office (ATO) to disclose tax debt information of businesses to registered credit reporting bureaus (CRBs). The ATO will only be able to disclose tax debt information of a business where certain criteria are met.
The measure will commence following the passage of legislation.
Providing transparency of overdue tax debts of businesses supports more informed decision making in the business community and seeks to reduce unfair advantage gained by businesses that do not pay their tax on time. It also encourages businesses to engage with the ATO to manage their tax debts.
CRBs may include the tax debt information in their credit reports which are available for purchase by parties who wish to use this information to make an informed decision on the credit worthiness of a business.
While the specific circumstances and exceptions for disclosure will be subject to public consultation and confirmed through the passage of law, 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 a tax debt, of which at least $10,000 is overdue by more than 90 days; and
- it is not effectively engaging with the ATO to manage its tax debt.
Businesses which are effectively engaging with the ATO to manage their tax debts will not have their tax debt information reported to CRBs. The definition of effective engagement will be subject to public consultation, but it is expected to include businesses which have established a payment plan or are disputing their tax-related liabilities.
The ATO will notify a business if they meet the reporting criteria, advising that they have 21 days to respond before their tax debt information is reported to CRBs.
The ATO will negotiate and establish agreements with CRBs to establish the appropriate protocols and governance arrangements.
In conjunction with Treasury, the ATO is consulting with the community, including business, industry groups and associations (including the Australian Small Business and Family Enterprise Ombudsman), to ensure that the measure is implemented and administered effectively.
Legislation and supporting material
Public consultation has commenced on draft legislation.
The ATO is also seeking feedback on our consultation paper which describes the administrative approach for this measure.
Interested stakeholders are encouraged to provide their feedback by Friday 2 February 2018.
More information
- Transparency of tax debt measure
- Mid-Year Economic and Fiscal Outlook 2016–17, Appendix A, Revenue Measures – page 113
See also
Source: Australian Tax Office
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