Changes now apply (effective 1 July 2023) regarding disclosure of all businesses tendering for large Australian Government procurement contracts.
Tenderers for contracts worth more than $200,000 are required to disclose their country of tax residency (including their ultimate parent entity’s country of tax residence), as part of the general business identifier information required in the Commonwealth Government procurement tender application process.
This new disclosure applies to all businesses (not just Australian businesses) and Non-corporate Commonwealth entities are required to include the disclosure requirement in all approach to market documentation for procurements, valued above the $200,000 lower limit (GST Inclusive).
As outlined on the Australian Treasury website “tax residence is a principle that is determined under the domestic tax rules of a country. It is relevant when considering how business income is taxed.”
An entity’s tax residency cannot be used to exclude a potential supplier from contributing to a procurement, and it will not be used to exclude a tenderer from further consideration in a procurement evaluation process.
Certificate of Residency
A Certificate of Residency can be requested from the Australian Taxation Office (ATO) and it identifies that the taxpayer is:
- an Australian resident for tax purposes
- not a temporary resident
- liable to pay tax on worldwide income in Australia
Generally, a certificate period cannot exceed 12 months after the issue of certificate (or date of issue).
It should be noted that it can take up to 28 days for a certificate to be supplied once a form is submitted to the ATO.
For that reason, Hall Browns accountants recommend allowing six weeks prior to the tender submission due date for them to complete and submit the application on your behalf.