Business tax debt to be reported to credit agencies
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), in certain circumstances. The measure is aimed at supporting “more informed decision making in the business community” and reducing “unfair advantage gained by businesses that do not pay their tax on time”, as well as encouraging businesses to pay taxation debts in a more timely manner to avoid affecting their credit rating. This measure is not yet law.
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.
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.
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