ATO reporting unpaid tax debts to credit agencies

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Jul 14, 2017 | Posted in Business Advice, Tax
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As of 1 July 2017, the ATO will be attempting to apply commercial pressure on taxpayers who have unpaid business tax debts. That pressure will be in the form of making use of the Credit Reporting Bureaus (CRB) that all other creditor’s use.

The ATO will be permitted to disclose tax debt information to a CRB, previously restricted on privacy grounds – not so anymore. The Commissioner has the discretion whether or not to report the tax debts to a CRB and it has been suggested that the ATO will only report the tax debts of taxpayers when the following occur:

  • The taxpayer has an ABN
  • The taxpayer has not entered into an effective payment arrangement
  • The taxpayer has not effectively engaged with the ATO.


The actual requirements are yet to be confirmed and while taxpayers will be notified before the ATO discloses information to a CRB; it is as yet unclear how this notice will be given and in what timeframe.

The stated reasons these new powers have been given to the ATO are to:

  • Encourage taxpayers to work with the ATO in regards to their outstanding tax issues
  • Eliminate any potential advantage that business may receive from not paying their tax on time
  • Allow other business to evaluate the risk relating to providing credit to a business that has unpaid tax debts.


Once a CRB has been advised of an unpaid tax debt or default; the information will be recorded on the taxpayer’s credit file which will remain there for five years. As with other creditor information, it will not be removed until the time has elapsed even if paid.

The Commissioner has acknowledged that these new rules will send some business broke as access to funds will be impacted, higher interest rates will be offered and banks may even exercise early repayment clauses now that they have access to this additional data.

We here at Ulton have always emphasised the importance of early and open communication with the Tax Office, especially when experiencing business difficulties and now it will be more important than ever.


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