Disclosure of business tax debts

The ATO can potentially report outstanding tax debts to a CRB where the following criteria are satisfied:

• The taxpayer has an Australian business number and is not an excluded entity;
• The taxpayer has one or more tax debts and at least $100,000 is overdue by more than 90 days;
• The taxpayer is not engaging with the ATO to manage their tax debt; and
• The taxpayer does not have an active complaint with the Inspector-General of Taxation Ombudsman about the ATO’s intent to report its tax debt information.

Excluded entities include deductible gift recipients, complying superannuation funds, registered charities and government entities.

Why is the ATO taking action?

The purpose of this letter from the ATO is to raise awareness of the actions that the ATO can now take under the Disclosure of Business Tax Debts measure. The letter will be sent to all taxpayers with business tax debts that currently meet the disclosure criteria outlined above.

This letter from the ATO provides business taxpayers with information on how to effectively engage with the ATO to manage their tax debt.

What can I do to avoid disclosure to a CRB?

Taxpayers can avoid disclosure to a CRB by making payment in full or negotiating a payment plan. If an eligible taxpayer does not take steps to actively manage their debt, they will remain eligible for disclosure.

Before the ATO takes any final action to disclose a tax debt, the ATO will issue the taxpayer with a formal Intent to Disclose Notice. If a taxpayer receives an Intent Notice, asking them to 'Act now or your tax debt will be reported to credit reporting bureaus', the taxpayer or their tax agent must contact the ATO within 28 days of receiving the notice to try and prevent the debt being reported.

It is crucial for taxpayers to engage with the ATO early before their debts become unmanageable. Any outstanding debts that are reported to a CRB can have a negative impact on the taxpayer’s credit rating, which in turn may affect their ability to borrow from banks and other financial institutions in the future.

If you would like to discuss the management of your business’ tax debts, or require further information on the topic, contact your usual Mazars adviser or one of our specialists via the form below.

Published: 11/05/2022

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