Possible changes to the ABN system include adjusting ABN entitlement rules, imposing conditions on ABN holders, and introducing a renewal process including a renewal fee.

The consultation paper stated that periodic renewals would prompt ABN holders to reconsider their eligibility, update their details, and serve as a reminder of the associated penalties for supplying false information, Treasury said.

Treasury is also proposing that a fee be charged for renewal, consistent with the fees charged renewing a company or business name. As it stands, it’s $36 to register a business name, and $36 annually to renew.

Insyt chief executive Darren Wynen said given that SMSFs apply for an ABN when they register the SMSF with the ATO, SMSFs could also be impacted by these proposals, even though they’re not the target of the reforms.

“The target is really participants in the black economy who are using the ABN system illegitimately, but there's been no suggestion that SMSFs have been using ABNs in that way so it would to be a bit of a fee grab if SMSFs were forced to pay some sort of renewal fee for their ABN,” said Mr Wynen.

If cancellation is a consequence of failing to renew the ABN, Mr Wynen said it could also be very problematic for SMSFs from a compliance perspective.

“All of a sudden they could be put in the same basket as non-complying funds or funds that don't comply with the lodgement of returns and have their regulation details withheld [by the ATO],” he warned.

“Certainly that could create a problem if regulation details are withheld, that might prevent rollovers being made to the fund for example.”

In the paper, Treasury noted some of the problems that could arise if cancellation was a consequence of failing to meet ABN obligations.  

Treasury is inviting interested parties to comment on the consultation until 31 August 2018.