The Federal Government’s ‘Draft Procurement Connected Policy Guidelines’ (Draft PCP) are subject to review and consultation until 21 December 2018. Broadly, the Draft PCP aims to ensure that businesses (and some sub-contractors) who seek to tender for contracts over $4 million (GST inclusive) must obtain a statement from the ATO reflecting their compliance with tax laws.
Further to the Black Economy measures announced in the 2018-19 Federal Budget, the Draft PCP will require businesses seeking to tender for Federal Government procurement contracts over $4 million (GST inclusive) to provide an ATO statement confirming that the tenderer:
- is up-to-date with ABN, GST and TFN registration requirements;
- has lodged at least 90% of all income tax returns, Fringe Benefit Tax returns and Business Activity Statements for the last four years (subject to ‘reasonable delays’ in lodgements that have been agreed to by the ATO);
- has no more than $10,000 in outstanding debt due to the ATO.
These requirements will also apply to ‘first-tier subcontractors’ (those working directly for the tenderer) undertaking work valued at over $4 million (GST inclusive). Also, directors, partners, trustees or appropriate officers who are authorised to act on behalf of foreign tenderers will be required to essentially take on the tender’s obligations in respect of tax and provide statements in respect of the foreign tenderers compliance status (both within Australian and Internationally).