Treasury has released an exposure draft of the Treasury Laws Amendment (Tax Transparency) Bill 2018 which will authorise the Australian Taxation Office (ATO) to disclose business tax debts to credit reporting bureaus where the businesses have not effectively engaged with the ATO to manage their debt.
UPDATE 28 October 2019: the Treasury Laws Amendment (2019 Tax Integrity and Other Measures No. 1) Act 2019 has been passed and given Royal Assent.
If passed the Bill will amend the Taxation Administration Act to allow taxation officers to disclose the tax debt information of a particular business to credit reporting bureaus when certain conditions and safeguards are satisfied.
The new disclosure arrangements will apply to taxpayers being a business with an ABN, and having a tax debt, of which at least $10,000 is overdue for more than 90 days.
Before disclosing a taxpayer’s tax debt information the ATO must ensure the taxpayer is made aware that the Commissioner is considering disclosing their information and give taxpayers an opportunity to engage with the ATO to prevent their debts from being reported.
It is expected that tax debt amounts that are being disputed in various forums, and tax debt amounts that are being paid under a payment arrangement will not be disclosed.
A disclosure will only be permitted if all of the following procedural conditions are met:
• the Commissioner has notified the taxpayer at least 21 days before disclosure; and
• the Commissioner has consulted with the Inspector-General of Taxation.
However, these procedural conditions do not apply for disclosures to update, correct or confirm information previously disclosed.
The disclosure must be for the purpose of enabling the credit reporting bureau to prepare, update or issue a credit worthiness report in relation to a particular taxpayer.
