ATO’s new initiative: Tax debt report to credit bureaus
Announcement posted by Chan & Naylor 08 May 2017
It is very important that you get your tax debts under control to avoid an adverse credit report. Starting July 1st, 2017, the Government proposes to allow ATO to disclose to CRBs (credit reporting bureaus) tax debt information of businesses where debts have been outstanding for over a designated period and the taxpayer does not manage it with the ATO. The Australian Tax Office is currently not allowed to provide this information to credit reporting agencies.
This legislation aims to reduce any unfair advantage for businesses that do not pay taxes on time and may have established greater competitiveness against those who do, provide valuable information to credit providers and help them determine risks, and provide an incentive for taxpayers to repay their debts.
Reporting precludes those with a balance less than $10,000 or has been outstanding for less than 90 days, those who do not hold an ABN or do have a payment plan with ATO, have effectively engaged with ATO or are in formal dispute with the ATO. If ATO makes an error in reporting, CRBs may not be able to reverse it smoothly or timely based on anecdotal evidence.
The taxpayer only needs to at least engage with the ATO to avoid being reported to a CRB. If not, ATO will notify the taxpayer before a tax debt is reported.
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For more information about business and tax in Australia, contact a Specialist to discuss your particular circumstances.