Rising ATO travel bans: understanding departure prohibition orders
Did you know about the Australian Taxation Office’s (ATO's) power to prevent you from leaving the country if you have significant tax debts?
Departure prohibition orders, or DPOs, as they stand today, have been in the ATO's enforcement toolkit since the 1980s – but they’re largely unknown due to their limited use. However, a recent rise has brought them out of the shadows.
Rare power now resurfacing
From July 2025 to early January this year, the ATO issued 21 DPOs grounding people with unpaid tax who were attempting to travel. This figure is more than the total number issued in the previous financial year.
Historically, volumes have remained low, and it’s fair to assume the full total sits in the hundreds instead of thousands. But over the years, there have been some high-profile cases of people being served DPOs. These include Dr Geoffrey Edelsten (1980s) and actor Paul Hogan (2010).
While DPOs remain uncommon, understanding when and how the ATO can issue one helps show why they’re such a powerful enforcement tool.
Triggering a departure prohibition order
DPOs are set out in Part IVA (sections 14S to 14Z) of the Taxation Administration Act 1953 (Cth). They’re just one of several enforcement tools the ATO can use.
Other formal actions include director penalty notices (DPNs), garnishee notices, referrals to credit reporting bureaus, and, in serious cases, company wind-up applications.
A DPO is only considered when these conditions are met:
- A taxpayer has significant tax debt despite having the means to pay – significant is the key here
- They’ve taken deliberate steps to avoid paying
- The ATO suspects the taxpayer is trying to flee the country or is spending money on an overseas trip instead of addressing their debts
When a DPO is triggered, the ATO follows a formal process to block the taxpayer from leaving the country. These orders are often issued alongside other formal enforcement actions.
How a DPO actually works
In practice, a DPO follows these steps:
STEP 1: The ATO identifies a risk
The ATO identifies a taxpayer with an unpaid tax liability and planned travel. This can be either an individual or a business director – it’s not just companies.
STEP 2: Investigation and assessment
The ATO review the taxpayer’s financial position, looking for signs of deliberate avoidance, including:
- Moving assets out of their name or out of Australia
- Transferring money to related parties, trusts or offshore accounts
- Selling assets quickly to prevent recovery action
- Ignoring repeated payment demands or refusing to engage with the ATO
- Entering and defaulting on payment arrangements without genuine effort
- Liquidating or restructuring entities to avoid liabilities – otherwise known as phoenix behaviour
- Giving misleading or incomplete financial information
- Planning extended travel or time overseas
STEP 3: DPO is issued
If the conditions are met, the ATO formally issues a DPO, usually by registered post, and records it in the system so border authorities are alerted. While e-notices may be sent, orders are usually delivered in a format that can’t be disputed.
STEP 4: Leaving Australia prevented
If the person tries to depart Australia, Australian Border Force officials are alerted, the passport is flagged, and departure to a foreign country is blocked until the departure prohibition order is lifted. The Australian Federal Police can enforce this.
STEP 5: Resolution options
The taxpayer can resolve the DPO by:
- Paying the debt in full
- Entering a genuine payment arrangement or providing security
- Seek to challenge or appeal the order under specific circumstances
Note: A taxpayer served a DPO can apply to the ATO for a Departure Authorisation Certificate (DAC). A DAC allows temporary travel beyond Australia while the order is in place.
STEP 6: Order lifted
Once the ATO is satisfied the debt is managed or the arrangement is in place, the DPO is removed, allowing the person to travel again.
Ramped-up action is no surprise
It’s not a huge surprise that we’re seeing a rise in DPOs. Increases have been seen for all types of formal actions.
In the 24-25 TAX year, the ATO issued 84,500 director penalty notices (DPNs) – a massive 216% increase from the previous year’s 26,700.
While exact figures aren’t available, they also issued thousands of garnishee notices and other firmer actions, referred hundreds of businesses to credit reporting bureaus, and regularly pursued wind-up applications when debts remained unresolved.
This across-the-board momentum is tied to the ATO’s ramped-up focus on reducing unpaid tax and bringing down its $50 billion collectable debt book.
Reality of DPO impact
Compared to these figures for DPNs and other formal tax debt-collecting actions, the chance of being served a departure prohibition order (DPO) remains low.
DPOs are most likely in cases where dual residents or temporary residents accumulate significant tax debt in Australia – whether deliberately or because of business failure – and then plan to go abroad.
For these taxpayers, a DPO can effectively block travel until debts are addressed, creating both practical and financial consequences.
Realistically, most taxpayers won’t encounter a DPO. For those who do, it’s a serious enforcement tool that underlines the ATO’s focus on ensuring debts are managed before leaving the country.
Another reminder to stay up to date
Preventing foreign travel because of tax debt may seem surprising, but it’s been available as a tool for decades.
The recent rise, making DPOs more visible, is just another reminder of the ATO’s laser focus on taxpayers who refuse to meet their obligations. This is particularly true for unpaid employee superannuation, withheld income taxes, or GST collected from customers but not passed on to the government.
Our advice, as always, is simple: don’t wait for serious action. Stay on top of your tax obligations, and if you’re struggling, act early. The ATO prefers to support taxpayers who engage, using reminders, outreach and tailored guidance to help you stay compliant.
If you or a client is struggling to pay debts when due, reach out to our experts now on (02) 4908 4444 or (02) 6580 0400 for free initial advice. We’ll help you understand your options and keep discussions strictly confidential.
