TAX DEBTS CAN NOW BE NOTIFIED TO CREDIT AGENCIES, DEDUCTIONS DENIED FOR VACANT LAND AND MORE - NEW TAX LEGISLATION PASSED

Legislation has just passed that includes several measures, the most significant of which are –

• The ATO may now disclose tax debt information to credit agencies in certain situations

• With some exceptions, deductions are no longer available for holding costs associated with vacant land

• Some other measures including closing off a superannuation contribution loop hole .

'Schedule 5' of The Treasury Laws Amendment (2019 Tax Integrity and Other Measures No. 1) Bill seeks to create a legislative framework that decriminalises the disclosure of taxpayer information by a taxation officer where an authorised disclosure is made to a credit reporting bureau. Schedule 5 creates a broad legislative framework under which taxpayer debts may be disclosed by a taxation officer to a credit reporting bureau. In particular, the proposed amendment enables the Minister to determine, by way of legislative instrument:

• the class of taxpayers who may be subject to tax debt disclosure and

• to some extent, the procedural requirements that must be met in order for the tax debt to be disclosed.

The proposed amendment would allow taxation officers to disclose to credit reporting bureaus the tax debt information of businesses that do not effectively engage with the ATO to manage their tax debts. Schedule 5 proposes to achieve this by amending the TAA so that it is no longer a criminal offence for taxation officers to disclose the tax debt information of taxpayers to credit rating bureaus in certain circumstances. The mechanism that will determine whether a debt is disclosable or not will be a legislative instrument issued by the Minister.

According to the amendment:

• the disclosure exception only applies to entities with tax debts in excess of $100,000

• taxpayers engaging with the ATO will not have their debts disclosed

• debts can only be disclosed where they are more than 90 days overdue.

The Government considered that this measure would result in businesses paying taxation debts in a more timely manner to avoid affecting their credit rating.

Additionally, we talked about the amendments in relation to the holding costs on vacant land in one of our previous blogs that can be read here.

The bill has now been passed in the parliament under Schedule 3 that prevents deductions being claimed in respect of vacant land where that land is not being held for the purpose of carrying on a business.

If you wish to seek further advice in relation to the above-mentioned amendments please do not hesitate to contact your trusted advisors at Cordner Advisory.

Cordner Advisory - Your Business Advisory, Accounting & Tax Specialists. Catering for clients all across Australia, from the golden beaches of the Gold Coast and Sunshine Coast to the capital cities such as Brisbane, Sydney and Melbourne