The Government has announced that it will allow the Australian Tax Office (ATO) to disclose tax debt information of a business to registered credit reporting bureaus (CRBs) where certain criteria are met.
Specific circumstances and exceptions for disclosure will be subject to public consultation, however it is expected that the ATO will 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 debt.
This measure will commence from the date of Royal Assent.
The ATO reports that 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. The ATO also hopes that this measure will encourage businesses to engage with the ATO to manage their tax debts.
It is expected that CRBs will 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.
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 is expected to include businesses who have established a payment plan or are disputing their tax-related liabilities.
The ATO have advised that they will notify a business if they meet the reporting criteria, giving businesses 21 days to respond before their tax debt information is reported to CRBs.
As at 15 September 2017, this measure is not yet law, and is subject to the normal parliamentary process. We will issue further details when they come available.