New accountability measures for ABN holders, initially announced in the 2018-19 Federal Budget and now outlined in draft legislation, will require individuals and entities to take specific actions. This includes lodging any outstanding income tax returns and verifying the accuracy of their entity’s details with the Australian Business Registrar on an annual basis.

Currently, there are no penalties for ABN holders who fail to lodge tax returns, meaning that they can continue to use their ABN without submitting outstanding returns. However, the new measures will allow regulators to cancel an ABN if the holder has two or more outstanding income tax returns for income years beginning on or after July 1st, 2022. Additionally, regulators can cancel an ABN if the holder fails to confirm the accuracy of their ABN details annually, starting from July 1st, 2024.

If an ABN is cancelled due to these measures, the registrar must reinstate it once the outstanding items are resolved. We are monitoring the draft legislation’s progression and will provide further information once it becomes available from the Treasury. If you have any questions or concerns about the draft legislation, please feel free to contact us.