The Taxable Payments Annual Report (TPAR) system is an Australian Taxation Office (ATO) system that requires payments made to contractors to be reported to the ATO annually.
Initially, the TPAR system only covered the building and construction industry however, the reporting requirement has expanded to the following industries:
From 1 July 2018:
- • Cleaning services; and
- • Courier services.
From 1 July 2019:
- • Road freight services;
- • Information technology (IT) services; and
- • Security, investigation, or surveillance services.
A business that provides one or more of the services listed above is also required to report (conditions apply).
The TPAR is an annual report that must be lodged with the ATO on or before 28 August each year. The report tells the ATO details about payments made to contractors for providing services for a particular financial year.
For example, a business that made payments to contractors for the period 1 July 2019 – 30 June 2020 must lodge the TPAR by 28 August 2020.
Payments Businesses Need to Report
Businesses need to report payments made to contractors during a financial year for services the contractor provides and can include payments made to:
- • Subcontractors; and
- • Consultants and independent contractors.
Contractors can be operating as sole traders (individuals), companies, partnerships, or trusts.
Payments Businesses Do Not Need to Report
Businesses do not need to report some payments made to contractors. These include:
- • Payments for materials only;
- • Payments for incidental labour;
- • Unpaid invoices as of 30 June each year;
- • PAYG withholding payments;
- • Payments within consolidated groups; and
- • Payments for private and domestic services.
What Information Needs to be Reported on a TPAR?
The following information must be reported for each contractor:
- • Australian Business Number (ABN);
- • Name and address; and
- • Gross amount paid to the contractor (including GST) for the financial year.
How Can the TPAR be Lodged?
There are various ways the TPAR can be lodged to the ATO. These are listed below:
- • Through your business accounting software;
- • Through the ATO business portal;
- • Individuals and sole traders can lodge through a MyGov account linked to the ATO;
- • Online via your tax agent; and
- • Lodging on paper using the ATO Taxable Payments Annual Report (NAT 74109) form.
If you would like to find out more about whether or not the TPAR system applies to you, please contact us. The team at EMspire Advisory are experienced accountants, bookkeepers, and tax agents in Sydney and would like to help you create, grow and succeed in business.
Please note that this information is not specific and is general in nature and cannot be relied upon as advice. Please contact us for specific advice for you and your circumstances.