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As you know the IRD can report to the credit agencies if you owe money to the tax department. The threshold for reporting has been set to $150,000. A recent Order in Council sets a threshold of $150,000. A company’s tax debt over this amount may be disclosed to certain credit reporting agencies.

This is mainly protection for the other business who are dealing with the business in tax debt with the IRD. Its better for them to know who they are dealing with. It may be difficult for the business in tax debt to carry on the business as the customer and supplier both may refrain doing business with the company in tax debt.

The IRD states their approach is to try to resolve the matter directly with the company, and when all attempts have been unsuccessful they will report to the credit agencies. They also mentioned this will only trigger when they are considering insolvency for the company. Basically, they want to ensure other creditors are warned.

The $150,000 tax debt threshold was decided after extensive consultation and will come into force on 29 June 2017. It is currently limited to companies.

 

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