ATO disclosing business tax debts to credit reporting agencies

Recently, the ATO has commenced disclosing businesses’ debt information to credit reporting agencies if the business meets certain criteria.

The ATO on its website states it will provide written notice if it intends to disclose a business tax debt and if the business meet the following criteria:

• It has an Australian business number (ABN) and is not an excluded entity (for example a registered charity or government entity);

• It has at least $100,000 in overdue tax debt by more than 90 days;

• It is not engaging with the ATO to manage its tax debt; and

• It does not have an active complaint with the Inspector-General of Taxation Ombudsman.

It will remain to be seen how banks and financiers will respond to the publishing of debt information. Banks may start relying on this to be an act of default or breach of covenant by the business.

As this new development unfolds, it will be important for businesses to seek advice from their lawyers and consider their rights carefully especially if their tax debt is over $100,000.

Please feel free to contact Tony Scoglio on (07) 3833 2100 or info@scogliolaw.com.au if you have any questions.

This article contains general information and is not legal advice and you should not rely on this information. You should seek professional advice specific to your circumstances.