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Improve the transparency of tax debts

The Government has announced that it will allow the Australian Taxation Office (ATO) to disclose tax debt information 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 from the date of Royal Assent.

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)

  • it has a tax debt of at least $10,000 that is overdue by more than 90 days; and

  • it has not effectively engaged with the ATO to manage its tax debt.

Businesses who effectively engage 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 who 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

This measure is not yet law and is subject to the normal parliamentary process.

Subject to passage of the law, the ATO will issue further details on how the measure will be implemented and administered.

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