Departure prohibition order (DPO): The ATO can stop you from leaving Australia
The ATO can issue you with a departure prohibition order (DPO) to stop you from leaving Australia. The ATO can stop you from leaving regardless of whether you intend to come back to Australia.
The ATO can prevent you from leaving Australia until you have paid your tax debts to the ATO in full or you have entered into a suitable payment arrangement with the ATO for the payment of your tax debts.
If you have a big tax debt with the ATO, you should get legal advice from King Lawyers so you can deal with the ATO urgently and avoid a departure prohibition order being issued by the ATO.
When does the ATO issue a departure prohibition order?
The ATO does not issue a departure prohibition order to every taxpayer who has a tax debt with the ATO.
The ATO must determine on “reasonable grounds” whether it is desirable to issue a departure prohibition order to a particular taxpayer to ensure full payment, or a suitable payment arrangement, for the tax debt. Therefore, this decision is made by the ATO on a case by case basis.
In determining whether there are “reasonable grounds” to issue a DPO, the ATO will consider all relevant facts and circumstances, including:
- whether a tax debt can be recovered, including whether known assets are sufficient to pay tax liabilities, are readily realisable and their location;
- whether audits or recovery proceedings are in progress as well as whether the taxpayer is subject to criminal investigation;
- the taxpayer’s behaviours, such as alienating assets to associated persons, concealing assets or moving funds overseas; and
- indications of overseas travel and the reasons for that travel.
The ATO recognises that a DPO imposes a significant restriction on the normal rights of individuals and restricts their liberty and freedom of movement. Therefore, a decision to issue a DPO to a taxpayer is made by a senior officer of the ATO and it is not made lightly.
A departure prohibition order can be issued to any individual, including foreign nationals
A departure prohibition order by the ATO can be issued to both Australian nationals and foreign nationals who are liable to pay Australian tax.
Therefore, the ATO can even stop a foreign national with a tax debt from leaving Australia.
Departure Authorisation Certificate (DAC)
If the ATO has issued a departure prohibition order to you, you can apply to the ATO for a Departure Authorisation Certificate (DAC) to allow you to leave Australia temporarily.
The ATO will then consider each application for DAC and make its decision on a case by case basis.
Your appeal rights if the ATO has issued you with a departure prohibition order
If you are not happy with the ATO’s decision to issue you with a DPO, you can appeal the decision to a Supreme Court or the Federal Court of Australia.
To maintain a DPO, the ATO must be able to demonstrate to the Court that the DPO is required for revenue reasons and that the recoverability of tax owing will be affected by the departure of the taxpayer from Australia.
However, the onus is on the taxpayer to show that the DPO was wrongly made and the ATO does not have to prove, or give reasons, that the ATO’s decision was made on “reasonable grounds”.
Legal advice from King Lawyers on ATO tax debts or departure prohibition orders
This article is offered as general information only and should not be relied on as specific legal advice on ATO tax debts or departure prohibition orders.
To get legal advice from King Lawyers on your specific circumstances, please contact us to arrange an initial consultation with our experienced tax lawyers.