From 1 July 2021, ABN holders with an income tax return obligation will be required to lodge an income tax return.
From 1 July 2022, ABN holders will need to confirm the accuracy of their details on the ABR annually.
Currently, ABN holders are able to retain their ABN regardless whether they are meeting their income tax return lodgment obligation or the obligation to update their ABN details.
The new conditions, revealed in the federal budget, come after a Treasury consultation paper last year considered a reform to the ABN system to ensure information was up-to-date, with possible renewals fees discussed.
This measure is estimated to have a gain to the budget of $22.2 million over the forward estimates period.
BDO national tax director Lance Cunningham said he was pleased to see the government land on a “sensible” system of regulating ABN holders instead of imposing fees.
“The requirement to lodge a tax return already applies to almost all ABN holders and most of the information that would be required for [an] ABN renewal is provided in the tax return, or if it is not, it would be a simple matter of including a request for such information in the tax return for relevant taxpayers,” Mr Cunningham told Accountants Daily.
“The tax return lodgment system is already in place, so it makes sense to utilise this system instead of establishing a new ABN renewal system. It would also act as an incentive for ABN holders to lodge their tax returns within the lodgment periods or apply for extensions of time to lodge.
“If you are doing the right thing then you haven’t got any problems.”