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Tax debts could start hurting your credit rating soon
A Tax Debt Transparency Measure has recently been announced by the government to start taking effect from 1 July 2017.
What will this tax debt measure do?
This measure will allow the ATO to disclose to credit reporting bureaus tax debts of businesses that have not made any effort to work with the ATO to resolve their tax debts.
The ATO will be able to report tax debt through an associated ABN where debt exceeds $10,000 for a minimum of 90 days and the taxpayer is not effectively engaged. They have full discretion to disclose tax debt information; meaning that this measure in no way obligates them to disclose this information.
Specific circumstances and exceptions for disclosure will be confirmed through the consultation and design process, tax debts can be reported where the debt balance:
- is greater than $10,000 for at least 90 days
- relates to a taxpayer with an ABN (including individuals operating a business)
- is not under an active payment plan to repay the debt
- is not subject to a dispute with the ATO.
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