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Australia Toughens Tax Rules For Procurement Bids

by Mary Swire, Tax-News.com, Hong Kong

05 April 2019


The Australian Government is to implement a new government procurement process that will require the tenderer's tax record to be taken into account.

As of July 1, 2019, Australian and foreign businesses seeking to tender for Australian government procurement contracts over AUD4m (USD2.9m) will have to obtain a statement from the Australian Taxation Office (ATO) to show that they have a satisfactory tax record.

The ATO explained that for a statement of tax record (STR) to be issued, a business must be correctly registered for an Australian business number (ABN), goods and services tax (GST), and tax file number (TFN). The business must have lodged at least 90 percent of their relevant income tax, business activity statement (BAS), and fringe benefits tax (FBT) lodgements that were due in the last four years of operation from the date of the request for an STR. The business must not have AUD10,000 or more in outstanding undisputed debt due, or have a payment plan in place with the ATO.

Where a business has an Australian tax record of less than four years – for example, if they are a new Australian business or new foreign tenderer – they must meet additional conditions to obtain a satisfactory STR. This includes making statements relating to: being a non-resident with no tax residence or a tax record of less than four years in Australia; compliance and payment of Australian and foreign tax obligations; and no tax-related convictions in the last four years.

Businesses and their agents can apply for an STR online from June 1. When a request is submitted, a receipt number will be provided as confirmation. An STR receipt can be submitted as part of the tender documents, but a satisfactory STR will be required no later than four business days from the close of a tender and before the awarding of the contract.

An STR will be valid for a period of 12 months from the time of issue in the case of businesses with an Australian tax record of four or more years, and for a period of six months for businesses with a tax record of less than four years.

TAGS: compliance | tax | business | tax compliance | tax avoidance | fringe benefits | corporation tax | goods and services tax (GST) | Australia | tax authority | services | Tax | Tax Evasion

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