Legislation has recently been passed, with effect from 28 October 2019, allowing the ATO to disclose tax debt information of businesses to registered credit reporting bureaus (CRBs).
This will only be permissible where certain criteria are met including:
• The business 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 does of course have various other methods of enforcing payment of tax debts.
The message however is clear, engage with the ATO if your business is in a situation where it has tax debts and adhere to any negotiated payment arrangements.
Given this new additional compliance tool the ATO has at it’s disposal, and the potential commercial implications for obtaining finance in the future should a debt be reported to a CRB, this only reiterates the imperative need to engage and adhere to arrangements.
For more information please contact Infinite Accounting Solutions on 02 9899 4730 or via the contact page at www.ias-ca.com.au