Changes to tax debt threshold now in force
A threshold for reportable tax debt of $150,000 came into effect on 29 June 2017 by Order in Council.
Revenue Minister Judith Collins says changes to the law earlier this year allowed Inland Revenue to disclose information about companies with significant tax debt to certain approved credit reporting agencies.
The threshold has been set at $150,000. A company’s tax debt over this amount may be disclosed to certain credit reporting agencies. The provision is currently limited to companies.
Ms Collins says this information can be critical for smaller creditors who would otherwise be unaware they were dealing with a business that has a significant tax debt.
“Usually when a company’s tax debt reaches this level, it’s likely that other options to resolve the debt have been unsuccessful and Inland Revenue may be considering insolvency and enforcement proceedings. At this point the risk to other creditors is greatest.
“This approach we’re taking to debt is similar to the commercial approach. It means that smaller creditors dealing with a business carrying significant tax debt will be able to make more informed decisions about credit risks,” Ms Collins says.
Last updated on the 16th September 2019