Got a large, overdue tax debt with the Australian Tax Office (ATO)? Then best listen up, because certain tax debt information can now be reported to credit reporting bureaus (CRBs).
A new Australian law means the ATO will be able to disclose the tax debt information of a business to CRBs when certain criteria are met.
What does that criteria include?
The ATO will only disclose tax debt information if the business meets all of the following criteria:
– it has an Australian business number (ABN), and is not an excluded entity
– it has one or more tax debts, of which more than $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.
What’s the purpose of this law?
The ATO says the purpose of this law is to encourage businesses to engage with them to manage their tax debts and, where a business is unable to pay a tax debt in full by the due date, enter into a sustainable payment plan that’s agreed upon between the two parties.
The ATO adds that the law is also to support more informed decision making within the business community by making large overdue tax debts more visible.
Finally, the ATO says the law will reduce the unfair advantage obtained by businesses that do not pay their tax on time and do not engage with the ATO in managing their tax debts.
How much warning will I get?
The ATO will notify a business in writing if it meets the reporting criteria and give it 28 days to engage with the ATO and take action to avoid having its tax debt information reported.
This might apply to me – what are my options?
Get in touch with the ATO – you may be able to agree on a payment plan.
That said, not everyone enjoys the ATO hovering over their shoulder. If that includes you, it’s definitely worth also getting in touch with us to explore your options with business loan lenders.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
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