ATO Departure Prohibition Orders: How the Tax Office Can Stop You Leaving Australia

Key Takeaways

• The ATO has issued 21 Departure Prohibition Orders (DPOs) since 1 July 2025 — already more than the entire 2024–25 financial year combined (source: ATO, January 2026).
• A DPO prevents a taxpayer from leaving Australia and is enforced at the border by Australian Border Force — people have been pulled from flights in the early hours of the morning.
• DPOs are issued under s14S of the Taxation Administration Act 1953 and can be issued without advance warning to the taxpayer.
• The ATO’s $50 billion collectable debt book — $36 billion owed by small businesses — is driving the most aggressive enforcement posture in the agency’s history, combining DPOs, Director Penalty Notices (84,000+ issued in 2024–25), garnishee notices, and wind-up applications.
• A DPO can be challenged through the Federal Court or the Administrative Review Tribunal — but the only reliable way to have one revoked is to pay the debt in full or enter a satisfactory payment arrangement.

It was the early hours of the morning at an Australian international airport. A business owner — bags checked, boarding pass in hand — was pulled aside before reaching the gate. Australian Border Force officers had been notified: a Departure Prohibition Order was in place. No overseas trip. No flight. Just a conversation they were not prepared for.

This is not a hypothetical. The Australian Taxation Office (ATO) has confirmed it happened. And with 21 Departure Prohibition Orders issued since 1 July 2025 — already more than the ATO issued in the entire prior financial year — it is happening with increasing frequency.

If your business owes the ATO money and you have travel plans, this guide is essential reading. If you are a director, even more so.

What Is an ATO Departure Prohibition Order?

A Departure Prohibition Order (DPO) is a formal enforcement tool available to the Australian Taxation Office under section 14S of the Taxation Administration Act 1953 (Cth). It does exactly what it says: it prohibits a person with an outstanding tax liability from departing Australia.

Once a DPO is in force:

• The taxpayer is legally prohibited from leaving Australia while the order remains in effect
• Australian Border Force is notified and will prevent the person from boarding any outbound international flight, ship or vessel
• The DPO remains in force until it is revoked by the ATO or set aside by a court
• Attempting to leave Australia in breach of a DPO is a criminal offence under tax law

Critically: a DPO is not a penalty or fine. The ATO characterises it as a debt collection mechanism — a way to ensure the person cannot exit the jurisdiction before their liability is addressed. That distinction matters legally, but it makes no practical difference at the airport gate.

Why Is the ATO Using DPOs More Aggressively in 2025–26?

The context for the DPO surge is the ATO’s broader debt collection crisis. As at 30 June 2025, the ATO’s total collectable debt book stood at approximately $50 billion — with roughly $36 billion owed by small businesses. That figure has compounded through COVID-era payment deferrals, post-pandemic cash flow pressures, and what the ATO describes as a cultural assumption among some business owners that tax debt is the cheapest form of finance.

The numbers from 2024–25 alone paint a stark picture of escalating enforcement:

• 84,529 Director Penalty Notices issued — a 136% increase from 26,702 in 2023–24
• 15,000+ garnishee notices issued to banks and debtors
• Referrals to credit reporting bureaus for businesses with debts over $100,000
• Wind-up applications filed in federal and state courts
• 21 Departure Prohibition Orders issued in just the first half of 2025–26

The ATO has been explicit about its intent. ATO Assistant Commissioner Anita Challen stated publicly: “Taxpayers with significant debts to the ATO that think they can skip the country without paying what is owed to the community should think again.”

The two catalysts most relevant to Queensland businesses in 2026 are:

• Payday Super (from 1 July 2026): Employers must now pay superannuation within 7 days of each pay cycle. Non-compliance triggers Superannuation Guarantee Charge (SGC) liability — and SGC debts are among the ATO’s highest-priority enforcement targets, including for DPOs.
• GIC no longer tax-deductible (from 1 July 2025): The General Interest Charge currently runs at approximately 11.17% per annum — and since July 2025, it is not a deductible business expense. Businesses carrying ATO debt are effectively paying close to 18% after-tax cost on that debt. Every day a liability is unpaid, the enforcement calculus worsens.

Who Can the ATO Issue a DPO Against?

Section 14S of the Taxation Administration Act 1953 gives the Commissioner a broad power. The ATO may issue a DPO against any individual with an outstanding tax-related liability if the Commissioner believes on reasonable grounds that issuing the order is desirable to ensure the liability is paid or properly addressed before the person departs.

This includes:

• Individual business owners and sole traders with personal tax debts
• Company directors who have become personally liable for company tax liabilities through Director Penalty Notices (covering PAYG withholding, GST, and SGC)
• Trustees and beneficiaries where trust tax liabilities remain outstanding
• Partners in partnerships where tax liabilities are unresolved

Note: a DPO cannot be issued directly against a company — only against individual persons. However, directors who have received DPNs are personally liable for the company’s PAYG, GST and SGC obligations, which then creates the personal liability necessary for a DPO to be issued.

The ATO does not publish a specific threshold for DPO issuance, but based on its guidance, the types of taxpayers targeted are those who:

• Have significant tax debts they have the financial means to address
• Have taken deliberate steps to avoid payment — including spending money on overseas travel instead of meeting tax obligations
• Have failed to engage with the ATO’s earlier intervention attempts (SMS reminders, letters, outbound calls)
• Pose a risk of leaving the jurisdiction and reducing the recoverability of the debt

How Does the DPO Process Work? (No Notice Required)

One of the most alarming features of DPOs from a practical perspective is that the ATO is not required to give advance notice before issuing one. The process typically operates as follows:

1. Outstanding liability exists: The ATO has identified an unpaid tax-related liability and the taxpayer has failed to engage or pay.
2. ATO internal decision: An authorised ATO officer forms a reasonable belief that a DPO is desirable to protect recovery of the debt.
3. DPO issued: The Commissioner (or delegate) issues the DPO under s14S. There is no requirement to notify the taxpayer before issuance.
4. Border authorities notified: Australian Border Force is notified of the DPO and the relevant individual is flagged in border systems.
5. Taxpayer stopped at departure: The first the taxpayer may know about the DPO is when they are stopped at an airport — as occurred in the ATO’s publicly documented case.

The ATO’s Practice Statement PS LA 2011/18 governs the use of DPOs and other firmer recovery actions. It confirms that DPOs are typically deployed in conjunction with other enforcement tools (DPNs, garnishee notices, wind-up applications) — meaning that if you are already on the receiving end of one of those measures, DPO risk is elevated.

How to Get a DPO Revoked: Your Options

Once a DPO is in place, you have several pathways — but they are not equal in ease or speed.

Option 1: Pay the Debt in Full

The ATO describes this as the “quickest and most effective” way to have a DPO revoked. Once the liability is paid and there is no ongoing risk that it will not be recovered, the ATO will revoke the DPO as soon as practicable. If you have the means to pay and are planning overseas travel, clearing the debt before travelling is significantly simpler than dealing with a DPO at the airport.

Option 2: Enter a Satisfactory Payment Arrangement

If you cannot pay in full, you can contact the ATO to negotiate a payment arrangement. The ATO may revoke a DPO if it is satisfied that your tax liabilities will be “wholly discharged” — or in some cases, if your liabilities are completely irrecoverable (though this is a narrow ground). An arrangement may be supported by the provision of security over assets. The ATO retains discretion over what it considers “satisfactory”.

Option 3: Apply for a Departure Authorisation Certificate

If your DPO remains in force but you need to travel for a specific urgent purpose, you can apply for a Departure Authorisation Certificate (DAC). A DAC does not cancel the DPO — it is a limited permission to travel for a specified period, potentially subject to conditions (such as providing a return date, lodging security, or making a payment before departure). DACs are only granted in limited circumstances.

Option 4: Formal Review — ATO Internal Review or Federal Court

If you believe the DPO has been issued incorrectly or unreasonably, you can:

• Seek an external review of the decision through the Administrative Review Tribunal
• Apply to the Federal Court for an order setting aside the DPO

Challenging a DPO through the courts is not a quick process — it requires demonstrating that the Commissioner’s decision was legally flawed, not merely that you dispute the amount owed. Courts have generally been reluctant to set aside DPOs where a genuine debt exists. Legal advice is essential before pursuing this path.

The Director Dimension: How DPNs and DPOs Work Together

For company directors, the intersection of Director Penalty Notices (DPNs) and Departure Prohibition Orders creates a particularly dangerous pincer. Here is how the sequence typically plays out:

1. Company accumulates PAYG, GST or SGC liabilities and fails to lodge or pay on time
2. ATO issues a DPN — the director now faces personal liability for the company debt under the Taxation Administration Act 1953. The director has 21 days to act (pay, appoint administrator, or commence winding up) — or the penalty becomes due personally
3. Director fails to act within 21 days — the penalty crystallises as a personal liability against the director individually
4. Director now has a personal tax liability — they are now within the scope of s14S and the ATO can issue a DPO against them personally
5. Director plans to travel overseas — the ATO, now concerned the debt will be unrecoverable if the director leaves, issues a DPO

This sequence is not hypothetical — it reflects the ATO’s documented approach. The 84,529 DPNs issued in 2024–25 have left tens of thousands of directors personally exposed. Many of those directors may not realise how close they are to being stopped at the border.

If you are a director who has received a DPN, or whose company has unresolved PAYG, GST, or SGC liabilities, legal advice specific to directors is critical — and it should cover both the DPN itself and your broader travel risk.

5 Common Mistakes That Lead to a DPO

In our experience acting for business owners and directors facing ATO enforcement, these are the patterns we see most often leading to DPO exposure:

1. Treating ATO debt as a “soft” liability. Some business owners prioritise trade creditors and suppliers over ATO obligations, reasoning that the ATO will not escalate quickly. The 136% surge in DPNs demonstrates this is no longer a safe assumption.
2. Failing to engage when the ATO makes contact. The ATO typically sends SMS reminders, letters, and outbound calls before escalating. Ignoring these is the trigger that moves a file into the firmer action queue — which includes DPO assessment.
3. Not lodging BAS returns even when you cannot pay. A “lockdown” DPN — one that makes a director personally and immediately liable, with no ability to remit by appointing an administrator — only arises when a company has failed to lodge its PAYG or GST statements. Lodging, even if you cannot pay, preserves options. Not lodging takes them away.
4. Assuming a DPN is the end of the road. It is not. A DPN has a 21-day response window. There are options — including appointing an administrator, commencing a voluntary liquidation, or disputing the debt — that can prevent the penalty from crystallising personally. Acting within that window matters enormously.
5. Planning overseas travel without checking your ATO status. Given that DPOs can be issued without advance notice, business owners or directors with outstanding ATO debts who book international travel are taking a risk. The consequences of discovering a DPO at the departure gate — with flights booked, accommodation paid, and business meetings scheduled — are significant.

What Queensland Business Owners and Directors Should Do Now

If you have any ATO debt — company or personal — these are the steps to take today:

1. Know your exact position. Check your ATO account via myGov or your registered tax agent. Know the precise liability — including GIC accrual — and which taxes are involved (PAYG, GST, SGC are the highest-risk categories).
2. Engage with the ATO proactively. If you have not responded to ATO correspondence, contact them now. The ATO consistently states its preference is to resolve debts through engagement — but that window narrows quickly once firmer action commences.
3. Understand your DPN status if you are a director. Has your company lodged all BAS and SGC returns on time? If not, you may already be exposed to a lockdown DPN without knowing it. A tax lawyer or accountant can conduct this assessment.
4. Consider restructuring options. Small Business Restructuring (Part 5.3B of the Corporations Act) and Voluntary Administration (Part 5.3A) are legitimate tools available to companies in financial difficulty. Properly implemented, they can interrupt the DPN clock and provide breathing room for a rescue. However, they must be initiated before a DPN becomes locked-down personal liability.
5. If you need to travel, verify your status first. If you have any unresolved ATO liability — particularly a DPN or personal tax debt — check with a tax lawyer or your tax agent before booking international travel. Do not discover a DPO at the airport.
6. Get legal advice early. If you have received a DPN, a garnishee notice, or any formal ATO enforcement communication, the timeline for your options is measured in days, not weeks. A commercial lawyer experienced in ATO enforcement matters can identify your realistic options and negotiate on your behalf.

How Boss Lawyers Can Help

At Boss Lawyers, we regularly act for company directors and business owners facing ATO enforcement actions — including Director Penalty Notices, garnishee notices, and wind-up applications. Mark Harley and the team understand the timeline pressures and the options available at each stage of the enforcement sequence.

Whether you need to understand your exposure, dispute a DPN, explore restructuring, or respond to an ATO threat to commence winding-up proceedings, we can give you a clear picture of where you stand and what is achievable.

Call Mark Harley on 1300 267 711 or complete our online enquiry form. The sooner you get advice, the more options you have.

Frequently Asked Questions

What is an ATO Departure Prohibition Order?

A Departure Prohibition Order (DPO) is a formal enforcement action issued by the Australian Taxation Office under s14S of the Taxation Administration Act 1953 that prevents a person with an outstanding tax debt from leaving Australia. Once a DPO is in force, border authorities are notified and the person will be stopped at the airport. A DPO is not a fine or penalty — it is a debt collection mechanism that stays in force until the liability is paid or a satisfactory arrangement is made.

How many Departure Prohibition Orders has the ATO issued in 2025–26?

According to the ATO, since 1 July 2025 it has issued 21 Departure Prohibition Orders — already exceeding the total number issued during the entire 2024–25 financial year. The ATO has signalled it will continue increasing the use of DPOs as part of its broader enforcement posture targeting $50 billion in collectable debt.

Can a DPO be issued without warning?

Yes. While the ATO states it considers a person’s individual circumstances before issuing a DPO, there is no statutory requirement to provide advance notice. A DPO can be issued and border authorities notified before the taxpayer is aware — meaning some people first discover they are subject to a DPO when they are prevented from boarding a flight. This is why engaging with the ATO early about unpaid debts is critical.

What is a Departure Authorisation Certificate and how do you get one?

A Departure Authorisation Certificate (DAC) allows a person subject to a DPO to travel overseas temporarily in limited circumstances. It does not cancel the underlying DPO. To apply, you must complete the ATO’s Application for Departure Authorisation Certificate form and provide grounds for travel, supporting documents, and information about steps you are taking to address your debt. DACs are only granted in limited circumstances and may include specific conditions.

What should I do if I receive an ATO Departure Prohibition Order?

If you receive a DPO: (1) seek legal advice immediately; (2) contact the ATO to discuss payment or arrangements; (3) consider whether paying in full or providing security over assets can lead to revocation; (4) if you need to travel urgently, apply for a Departure Authorisation Certificate; (5) review your overall tax position — DPOs are typically issued alongside other enforcement actions like DPNs or garnishee notices. Breaching a DPO is a criminal offence under tax law.

This is general information only and is not legal advice. You should obtain professional advice specific to your circumstances.

Mark Harley | Principal Solicitor | Boss Lawyers
Mark Harley has 17+ years of experience acting for directors, creditors, and business owners in commercial disputes and insolvency matters. Boss Lawyers is a boutique commercial litigation and insolvency firm based at Level 27, Santos Place, 32 Turbot Street, Brisbane QLD 4000.