ABN registration: draft legislation to enforce lodgement and notification compliance

ABN registration: draft legislation to enforce lodgement and notification compliance

Treasury has released draft legislation which proposes two new grounds under which the Registrar of the Australian Business Register may cancel an Australian Business Number (ABN).

The government had earlier announced its intention to “strengthen” the ABN system by imposing new compliance obligations for ABN holders to retain their ABN. Currently, ABN holders are able to retain their ABN regardless of whether they are meeting their income tax return lodgment obligations or the obligation to regularly update their ABN details.

It’s worth noting that there are over nine million active ABN holders on the Australian Business Register.

Outstanding income tax returns

The proposed changes would allow the Registrar of the Australian Business Register to cancel a person’s ABN if they haven’t lodged their required income tax returns for two or more income years where the period for lodgement has ended. These wouldn’t need to be consecutive income years.

This ground for cancellation would apply for failures to lodge tax returns beginning with income years commencing on 1 July 2022, so the earliest the Registrar could cancel an ABN would be in the second half of 2024, if the ABN-holder failed to lodge tax returns for the income years beginning on 1 July 2022 and 1 July 2023.

Failing to confirm accuracy

The proposed changes would also allow the Registrar to cancel an ABN if the holder hadn’t given a notification within the past 12 months that they still require the ABN and that the information on the Register is current and correct.

This power would be available to the Registrar after 1 July 2024. In effect, this would require ABN holders to check their ABN details and notify the Registrar at least once in the period between the commencement of these provisions and 1 July 2024, and then at least once annually.

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