Information Sharing with approved Credit Reporting Agencies
This article sets out the legislation that allows IR to share debt information with approved Credit Reporting Agencies and steps to be taken before this occurs.
Section 85N of the Tax Administration Act 1994 allows Inland Revenue to share “reportable unpaid tax” debt information with approved Credit Reporting Agencies to increase visibility of tax debt enabling more informed business decisions.
The only Credit Reporting Agency currently approved is Centrix.
Current Inland Revenue policy is that only companies will have debt information shared with the approved Credit Reporting Agencies.
Information will only be shared when:
- the debt is owed by the company
- the debt relates to income tax, GST or amounts required to be deducted under the PAYE rules, including ESCT, RSCT, child support, student loan and KiwiSaver deductions
- the debt has been overdue for a year and, is 30% or more of the company's assessable income for the 12 months before disclosure, or where it exceeds an amount set by an Order in Council
- the debt is not disputed (ie under Part 4A or 8A of the Tax Administration Act 1994)
- Inland Revenue has made reasonable efforts to collect the debt
- there are no pending applications for relief or remission
- the debt is not under an existing formal instalment arrangement
- the company has been formally notified of Inland Revenue's intention to share tax debt information
- the company has been given 30 days to make a payment or enter into an instalment arrangement.
Reasonable efforts would be where the company has been formally advised of the tax debt by phone or in writing, and Inland Revenue have had one or more discussions with the company directors and tax agent (if applicable) about resolving it. These discussions include where we have intitiated or explored one or more collection options, with the tax debt remaining unresolved. This includes:
- making payment in full
- considering an instalment arrangement
- considering relief applications
- giving opportunity to the company to obtain a loan with a third party to repay the tax debt, without success.
If your company has been credit reported and you believe that the above criteria haven't been met then you should contact the company's case officer to discuss Inland Revenue's action.