Under the taxable payments reporting system (TPRS), some businesses need to report the total payments they make to contractors for providing certain services on their behalf.
These contractor payments need to be reported to the ATO in a Taxable payments annual report (TPAR) by 28 August each year.
The Taxable payments reporting system (TPRS) applies to businesses:
- primarily in the building and construction industry paying contractors for building and construction services. TPRS has applied to this industry since 1 July 2012.
- providing cleaning or courier services and pay contractors to provide these services on their behalf. TPRS has applied since 1 July 2018.
- providing road freight, information technology (IT), security, investigation or surveillance services and pay contractors to provide these services on their behalf. TPRS has applied since 1 July 2019.
Businesses that provide what we call ‘mixed services’ may also need to lodge a TPAR. These businesses provide a mixture of different services which may include one or more of the following –cleaning, courier, road freight, IT or security, investigations or surveillance services. If the payments they receive for these services exceed 10 per cent or more of their total GST turnover, they will need to lodge a TPAR even if they are not registered for GST. The 10 per cent threshold is applied to these services individually, except for courier and road freight services where the calculations of these payments must be combined from 1 July 2019.
See also: Mixed services.
Not required report
There are certain circumstances where TPAR reporting is not required.
For more information, visit Not required to lodge.
Federal, state, territory and local government entities need to report the total payments they make to an entity, wholly or partly, for providing services.
Additionally, federal, state and territory government entities will need to report the total grants paid to people or organisations that have an ABN. Local government entities don't need to report grants.
They need to report details of these payments and grants on the Taxable payments annual report (TPAR) by 28 August each year.
See also: Government Entities.
Reporting by businesses in the building and construction industry
Under Division 405 of Schedule 1 to the Taxation Administration Act 1953 (TAA), payers are required to report to the ATO details of payments made to suppliers as specified in the regulations. Regulation 70 of the Taxation Administration Regulations 2017 specifies businesses primarily in the building and construction industry that make payments to a supplier for building and construction services are required to report. This measure commenced on 1 July 2012.
Reporting by government entities
Under Subdivision 396-B of Schedule 1 to the Taxation Administration Act 1953 (TAA), government entities at the federal, state/territory and local levels are required to report to the ATO payments they make to an entity for the provision of services. In addition, government entities at the federal and state/territory levels will also be required to report grants paid to entities with an ABN. This measure commences on 1 July 2017.
Certain types of government entities are exempt from reporting, as are certain transactions.
See also: Government entities.
Reporting by businesses that provide:
- cleaning services
- courier or a road freight service
- security, investigation or surveillance services
- information technology services
Under Subdivision 396-B of Schedule 1 to the TAA, an ABN holder that provides cleaning, courier, road freight, security, investigation, surveillance or information technology services is required to report to the ATO payments they make to an entity to provide those services on their behalf, unless a reporting exemption applies.
To find out the specifications that should be used to create software for the electronic lodgment of the TPARs, refer to Taxable payments annual reports (TPAR) specification.