INTRODUCTION

The Australian Tax Office (ATO) can stop you from leaving Australia and it’s not afraid to do so. These powers, called Departure Prohibition Orders (DPO), are one of the strongest tools the ATO can use to force you to pay your tax liability or, at least, get you to the negotiating table. In the half-year ending 31 December 2025, the ATO doubled the number of DPOs it issued and it says it will actively disrupt international travel plans to protect the interests of the Australian community.

DEPARTURE PROHIBITION ORDERS – DPOs

Under the tax law, the ATO can issue a DPO preventing a person from leaving Australia for a foreign country. The powers are very broad. The person must have an unpaid tax liability owing to the ATO, and an authorised ATO officer must believe on reasonable grounds that it’s desirable to prevent the person leaving Australia until the tax debt is paid in full, or a suitable arrangement for payment is made.

DPOs can be issued by the ATO against foreign persons and Australian citizens. Once issued, officers from the Department of Home Affairs or the Australian Federal Police will take steps at Australia’s borders, such as at international airports and maritime terminals, to stop a person from leaving Australia.

Although there are no precise circumstances, in our experience the ATO will usually use DPOs against:

• a foreign person who it believes has international assets capable of discharging a tax liability;
• an Australian citizen who it believes may permanently relocate to a foreign country or abscond; or
• a person who frequently travels to and from Australia, usually with international business interests.

Further, it’s a power generally used by the ATO in conjunction with its other recovery powers, such as director penalty notices and garnishees. In a media release published by the ATO in January 2026, the ATO indicated it may issue a DPO to prevent a person spending money on an overseas trip in lieu of paying their tax liability.

DEPARTURE AUTHORISATION CERTIFICATES – DACs

A person who is subject to a DPO may apply to the ATO for a Departure Authorisation Certificate (DAC). A DAC allows the person to depart Australia temporarily for a specified period of time, despite a DPO being in force.

Broadly, the ATO is required to issue a DAC if it is satisfied that either:

• the person is likely to return to Australia within a period the ATO considers appropriate, and within that period the DPO is likely to be revoked (for example, because the tax debt will be paid or otherwise dealt with), and it is not necessary or desirable for the person to give security; or
• the person gives security to ensure their return to Australia. Security commonly takes the form of partial payment, mortgage over real property, a bank guarantee, cash bond or similar financial assurance acceptable to the ATO; or
• humanitarian grounds exist or refusing travel would be detrimental to the interests of Australia.

DACs are commonly granted subject to conditions. These may include partial payment of the debt, the provision of security, restrictions on the countries that may be visited and strict limits on the length of travel. A DAC may be cancelled at any time if the ATO considers that circumstances have changed or that a condition has been breached.

Crucially, if a DAC is granted and then not complied with, any security for the DAC is forfeited to the Commonwealth. The ATO takes the view that the value of forfeited security for a DAC is not applied against the person’s tax liabilities.

Importantly, the existence of a genuine commercial or personal reason for travel does not, of itself, entitle a person to a DAC. The ATO’s focus remains on managing the risk of non-payment and the risk that the person will not return to Australia.

DPOs AND DACs CAN BE APPEALED AND REVIEWED

A person subject to a DPO may apply to a court to appeal the imposition of the DPO. This is subject to strict time limits.

The scope for a successful challenge is limited. Importantly, it is not a ground for review that issuing the DPO was harsh or unfair in a general sense. The question is whether the authorised ATO officer had reasonable grounds to believe it was desirable to prevent the person leaving Australia to ensure payment of an outstanding tax liability.

Generally, evidence of significant unpaid tax, limited engagement with the ATO, frequent overseas travel or substantial international assets could be sufficient to uphold the issue of a DPO. Such decision is a matter of risk management for the ATO.

Lastly, while the ATO is required to notify the taxpayer after a DPO is made, failure to do so does not affect its validity. In practice, many people only become aware of a DPO when stopped at the airport. Any challenge therefore usually needs to be commenced urgently.

Similarly, a person subject to a DPO, or applying for a DAC, may apply to a court to appeal, or the Tribunal to review, the failure to revoke or vary the DPO, or to authorise the DAC. These are also subject to strict time limits.

THE ATO DOES NEGOTIATE

Although DPOs impose a significant restriction on a person’s ability to travel, they are primarily a debt recovery tool. In many cases, their purpose is to force engagement where other debt recovery actions have failed.

Once a DPO has been issued, in our experience the ATO may be more than willing to negotiate payment arrangements that reduce flight risk. The arrangements include payment plans, staggered asset realisations and the giving of security to the ATO. The focus is on obtaining payment of the tax debt rather than punishing the person. If the ATO is satisfied that its debt recovery goals are achieved, such as by the provision of security to cover some or all of a person’s tax liabilities, it may agree to lift a DPO.

That said, the ATO’s recent public statements indicate that it’s becoming increasingly intolerant of non-payment. People who ignore their tax obligations or prioritise overseas travel over payment should expect the ATO to move quickly to issue and maintain DPOs.

WHAT TO DO IF YOU RECIEVE A DPO

Early engagement remains critical. Once a DPO is in place, your options are limited and the ATO has a material advantage to recoup the tax liability owing to it. Any delay in seeking advice can also materially affect the prospects of revocation of the DPO, securing a DAC or negotiating an acceptable payment arrangement. Any arrangement usually also comes with a deed of security and forbearance.

With the ATO publicly signalling an increased and more assertive use of DPOs, the risk of a DPO being issued should now be squarely on the radar for globally mobile individuals with significant tax debts.

If you are concerned about a potential DPO, or have already received one, we recommend getting advice as soon as possible.

Clients engage HWLE Lawyers to negotiate with the ATO to lift DPOs or obtain DACs so that individuals can travel internationally, permitting them to return home, run their businesses or relax with family and friends. We advise on all aspects of these rules, particularly for individuals defending claims brought by the ATO.