TPAR

7

Work out if you need to lodge a TPAR

Some businesses and government entities need to lodge a Taxable payments annual report (TPAR). You lodge a TPAR for payments made to contractors for services. Some government entities need to report grants paid to people or organisations with an Australian business number (ABN).

Payments businesses need to report

Businesses need to report payments made to contractors or subcontractors during the financial year in their TPAR.

Payments you need to report

Report payments made to contractors or subcontractors for the following services:

  • building and construction services
  • cleaning services
  • courier services
  • road freight services
  • IT services
  • security, investigation or surveillance services

Report the total payment amount if an invoice you receive from a contractor includes both labour and materials.

Payments you do not need to report

You do not need to report the following payments in your TPAR:

  • payments for materials only
  • incidental labour
  • unpaid invoices after 30 June: only report payments you made on or before 30 June each year
  • workers engaged under a labour hire or on-hire arrangement. This includes a labour hire firm that hires workers under a labour-hire arrangement to provide services
  • pay as you go (PAYG) withholding payments. For example, you do not report payments to employees. Report these payments through Single Touch Payroll (STP) instead.
  • payments to foreign residents for work performed in Australia. These payments are generally subject to PAYG foreign resident withholding. If the payments are not subject to PAYG withholding, then you need to report them in a TPAR
  • foreign residents for work performed overseas
  • contractors who do not quote an Australian business number (ABN)
  • payments in consolidated groups
  • payments for private and domestic projects

Additional information

Incidental labour
Exclude the labour amount for invoices that list both materials and labour. Do this if the labour is incidental to the supply of materials.

Contractors who do not quote an ABN
If an ABN is not provided, you may need to withhold an amount from the payment for that supply under the PAYG withholding arrangements and report the amounts withheld in the TPAR.

Payments within consolidated groups
If you are in a consolidated or multiple entry consolidated group for income tax purposes, you do not need to report payments made to another member of that same group.

This is because members of a consolidated group or multiple entry consolidated group are taxed as a single entity.

You only need to report payments to contractors for services who are outside the consolidated group.

Payments for private and domestic projects
You do not need to report if you are:

  • an individual who is not running a business and you make payments to contractors for services

for example, if you are a homeowner building or renovating your main residence

  • a business making payments to contractors for services for private purposes

for example, cleaning your own home.

If the work is related to carrying on a business, the amounts paid to the contractors for this work must be reported. These are payments that businesses can claim as a tax deduction.

A bird's eyeview of a business coffee business, representing the concept of TPAR.

Payments government entities need to report in their TPAR

Government entities need to report certain payments and grants in their Taxable payments annual report (TPAR).

When a government entity must lodge a TPAR

Federal, state, territory and local government entities must report:

  •  the total payments they make to an entity, wholly or partly, for providing services
  • federal, state and territory entities also report the total grants paid to people or organisations that have an ABN
  • by 28 August each year

Local government entities do not need to report grants.

Some government entities do not need to lodge a TPAR.

Government entities that must report

Government entities that must report include:

  • federal government departments
  • executive or statutory agencies
  • statutory authorities
  • state or territory government departments and agencies
  • local governing bodies established by or under state or territory law
  • government-owned corporations• organisations that

– are either established
– by the federal government, a state or a territory (whether under a law or not) to carry on an enterprise
– for a public purpose by an Australian law

  • can be separately identified because of their location or nature of the activities they carry on. This includes organisations that are part of a department or branch.

Payments for services to report

Federal, state, territory and local government entities need to report payments made to an entity, wholly or partly, for providing services in the TPAR. This includes payments made to overseas suppliers and governments.

Services can include actions that:

  • a business performs
  • provide you with assistance or support
  • may be performed on goods or in conjunction with the supply of goods. For example, a supplier delivers goods and then performs an installation
  • are performed as part of trade or commerce
  • may be performed under a contract but not an employment contract.

If you receive invoices that include both goods and services, whether itemised or combined, report the whole amount of the payment. Do this unless the supply of the services is incidental to the supply of goods.

Government entities that do not report

Some government entities are exempt from lodging a TPAR. However, these exemptions do not apply to departments of the Commonwealth, a state or territory.
Government entities are exempt if they are:

  • providers of education courses
  • providers of childcare, including registered carers and providers of approved childcare services
  • hospitals
  • providers of medical services
  • cemeteries, cemetery boards or authorities
  • ministerial councils or related bodies, including those established by the Council of Australian Governments
  • Aboriginal land councils
  • national law bodies established under laws enacted by the states and territories
  • public museums, public libraries or public art galleries
  • community associations, for example, parents and friends’ associations
  • industry or professional associations, including registration and licencing boards and advisory councils
  • water catchment authorities, catchment councils and natural resource management boards
  • trustees of trusts or managers of funds established for the public benefit or in the public interest
  • superannuation funds
  • defence force mess halls, canteens, brigades or clubs
  • public zoological gardens, public botanical gardens, public parks, public reserves or public alpine resorts
  • commissions of inquiry or Royal Commissions
  • courts or tribunals
  • Commonwealth, state or territory Houses of Parliament
  • community-based volunteer emergency services. For example, Country Fire Associations, volunteer fire brigades and State Emergency Services
  • entities with the primary purpose of promoting the arts
  • entertainment, recreation or sporting venues. This includes showgrounds, stadiums and racecourses, or entities with the primary purpose of managing such venues
  • seaports or airports
  • prisons, detention centres, remand centres or corrections offices
  • embassies or consular offices.

A non-exempt government entity must report payments to us even if they are making payments on behalf of an exempt government entity.

Payments that you do not need to report

You do not need to report payments made:

  • for goods only, which includes any form of tangible property
  • made to other Australian government entities
  • made electronically by

– BPAY
– recurring direct debit
– credit or debit card
– third-party payment processors facilitating any of the above methods

  • for telephone and internet services
  • for electricity, water, sewerage or gas
  • for transportation of employees. This includes airfares, taxi fares, train or bus fares, or fares for water transport
  • for insurance
  • for accommodation in commercial premises. For example, rent payments
  • for accommodation in a hotel, motel, inn, hostel, boarding house, caravan park or camping ground
  • for a lease of goods
  • for the creation, grant, transfer, assignment or use of a right under licence. For example, a licence to use a software product
  • for financial supplies. For example, bank fees
  • for membership to a professional association or body
  • for services relating to court or tribunal functions. For example, payments to jurors, witnesses or advocates for minors.

Speak to your software provider on how best to exclude these payments from your report. However, we will accept these types of payments if it creates an increased administrative burden to exclude them.

ADDITIONAL INFORMATION

Unpaid invoices as of 30 June each year

Only report payments that have been paid on or before 30 June each year.

For example, if you receive an invoice in June but you do not pay that invoice until July, report that payment in the next financial year (the year you paid it).

PAYG withholding payments

Report PAYG withholding payments in your PAYG withholding annual report or through Single Touch Payroll (STP).

Do not report in PAYG withholding payments in your TPAR.

Examples include payments to:

  • employees
  • workers engaged under a voluntary agreement to withhold
  • workers engaged under a labour-hire or on-hire arrangement. This includes a labour hire firm that hires workers under a labour-hire arrangement to provide services.

Payees who do not quote an ABN

If an ABN is not provided, you may need to withhold an amount from the payment for that supply under the PAYG withholding arrangements.

Report the amounts withheld in either the:

  • TPAR
  • PAYG payment summary withholding — where ABN not quoted.

Report this information in one of these annual reports, not both.

If a supplier does not provide an ABN, see Statement by a supplier not quoting an ABN.

Grants paid to people or organisations

Federal, state and territory government entities only need to report grants paid to people or organisations that have an ABN. This includes grants paid to not-for-profit organisations that have an ABN.

Grants do not need to be reported if:

 

  • you are a local government entity
  • the grant was paid to an individual who does not have an ABN
  • the grant was paid to another government entity.

What is a grant?

Grants can take many forms. They can include:

  • subsidies
  • rebates
  • sponsorships and similar arrangements.

Grants usually:

  • are explicitly tied to a government policy or goal
  • are disbursed on a one-off or longer-term basis. They are not provided as ongoing, permanent funding
  • require recipients to submit applications to receive grants
  • have conditions attached. For example, reporting obligations or the requirement to include government logos on marketing materials
  • do not need to be repaid.

Refer to your jurisdiction’s financial management guidance on what programs are considered grants. For example, federal government entities should refer to the Commonwealth grants rules and guidelines.

If multiple grant payments were made:

  • Under the same grant program name, to the same business in a financial year, each payment may be reported separately or added together. If added together, the date of the grant payment can be reported at the end of the relevant financial year.
  • Under different grant programs to the same business in a financial year, the total of the payments made in the relevant financial year under each program name must be reported separately.

Non-assessable non-exempt grants

Some grants that you report may be treated as non-assessable non-exempt (NANE) government income for tax purposes. Examples of these grants include:

  • Natural disasters
  • Water infrastructure improvement payments

If a grant is NANE income for a recipient, they don’t need to include the amount in their assessable income. For more information on how grant recipients can treat grant amounts as NANE income, see Non-assessable non-exempt government grants for grant recipients.

Natural disasters

1. Storms and floods

Small businesses and primary producers affected by storms and floods may be eligible to receive special disaster recovery grants.

Primary producers may be eligible to receive certain grants for replacing or repairing farm infrastructure, restocking or replanting, or a similar purpose.

2. Bushfires

Any bushfire relief recovery or benefits provided by any level of government, including

  • Commonwealth
  • state
  • territory
  • a municipal corporation
  • a local governing body

Water infrastructure improvement payments

Payments for Sustainable rural water use and infrastructure programs are NANE income if the participant (recipient) chooses to have the payment treated this way. The participant can also choose to treat it as ordinary income.

LATE & OVERDUE TAX RETURNS

When your business provides TPRS services and other unrelated services

If your business provides both courier and road freight services, you must combine the payments you receive for both these services. Do this when you work out if you need to lodge a TPAR.

If TPRS services are only part of the services your business provides, you need to work out what percentage of the payments you receive are for TPRS services each financial year. You do this to determine if you need to lodge a TPAR.

This does not apply to building and construction services you provide.

If the total payments you receive for TPRS services are:

  • 10% or more of your business income: you must lodge a TPAR
  • less than 10% of your business income: you do not need to lodge a TPAR.

Steps to work out if you need to lodge

Step 1: calculate your total payments received from contractors for each relevant service.
Add up all payments your business received for each relevant TPRS service during the financial year. Include payments received when employees, contractors or sub-contractors performed services on your behalf.

Step 2: calculate your current or projected business income
If you have been operating your business for:

  • the full financial year: use your current business income for the year
  • less than 12 months of the financial year: use your projected business income. Do this by working out what your business income will be for the next full financial year.

Step 3: calculate what percent of your business income is from a relevant service
Calculate this percentage by using the following formula for each financial year:

Total payments received for a relevant service ÷ current or projected business income x 100 = %

You must lodge a TPAR if:

  • 10% or more of your business income for the financial year is from a relevant service, and
  • you made payments to contractors for a relevant service during the year.

If you need to lodge a TPAR, report the total contractor payments made to each contractor for the relevant service provided on your behalf.

A storefront of a diner at night, representing the concept of TPAR.

Lodge your TPAR

If you are a sole trader, business, tax professional or government entity, this information will help you lodge your Taxable payments annual report (TPAR).

The TPAR is due by 28 August each year.

Prepare to lodge

Before you lodge, you should:

• keep records, including the contractor’s:

– name
– address
– Australian business number (ABN)
– amount you paid, including goods and services tax (GST)

• check if your business software can prepare and lodge the TPAR

TPAR contractor details to report

Businesses and government entities must provide contractor (payee) details when completing a Taxable payments annual report (TPAR). You can also give these details to contractors.

Contractor details the ATO needs

For each contractor you pay, you must include the following details in your TPAR:

• Australian business number (ABN), if known

if a contractor’s ABN changed during the year, include each ABN for that contractor

• name (business name or individual’s name)
• address
• total amounts for the financial year of the

– gross amount paid, including goods and services tax (GST) and any tax withheld
– total GST you paid them
– total tax withheld where an ABN was not quoted.

• If you are a government entity, you must report

– if a Statement by a supplier was provided
– details of any grants paid to people or organisations that have an ABN, including the

– date the grant was paid
– name of the grant or grant program.

To tell the ATO when a grant is listed under Division 59 of the Income Tax Assessment Act 1997 as non-assessable non-exempt (NANE) income – answer ‘yes’ to this question in the TPAR.

The ATO may ask for extra information about your contractors, including their:

  • phone number
  • email address
  • bank account details (if they are paid by electronic bank transfer).

Checking contractor ABN details
When you receive an invoice:

  • check that the ABN on the invoice matches the ABN on your record for that contractor
  • ensure you create a new contractor record, if necessary.

Check your contractor’s details (including ABN, name and GST registration) are correct by using the ABN Lookup website.

Payee information statement

You do not need to provide contractors with any details of the information you have reported on a TPAR.

Lodging your TPAR

To meet your reporting obligations, lodge using the method that works for your situation:

  • Sole traders and businesses
  • Tax professionals
  • Government entities

Sole traders and businesses

Use business software if:

  • it is SBR-enabled software
  • your business can create a TPAR data file to the required Taxable payments annual reporting specificationExternal Links. Lodge through Online services for business using the file transfer function.

If you do not have business software, use:

  • Online services for business
    • to use this service, you need an ABNExternal Link and a secure credential myGovID and Relationship Authorisation Manager (RAM).
    • select Lodgments then Taxable payments annual reporting
    • this service allows you to:
      • save and resume your draft TPAR before lodging
      • confirm previous lodgment dates and access receipt ids in the History section
  • Online services for individuals and sole traders
    • select Tax, Lodgments and then Taxable payments annual report
    • this service allows you to:
      • save and resume your draft TPAR before lodging
      • confirm previous lodgment dates and access receipt ids in the History section
  • your tax or BAS agent

Government entities

Use business software if:

  • it is SBR-enabled softwareExternal Link
  • your business can create a TPAR data file to the required Taxable payments annual reporting specificationExternal Links. Lodge through Online services for business using the file transfer function.

If you do not have business software, use:

• Online services for business

– to use this service, you need an ABNExternal Link and a secure credential myGovID and Relationship Authorisation Manager (RAM)
– select Lodgments then Taxable payments annual report.

• Online services allow you to:

– save and resume your draft TPAR before lodging
– confirm previous lodgment dates and access receipt ids in the History section.

A couple of business owners working in their business representing the concept of TPAR.

Taxable payments reporting and contractors

As part of the taxable payments reporting system (TPRS), many businesses lodge a Taxable payments annual report (TPAR) to report payments made to contractors for providing the following services:

  • building and construction
  • courier
  • cleaning
  • information technology (IT)
  • road freight
  • security, investigation or surveillance.

If you work as a contractor providing any of these TPRS services, remember to include all your income on your tax return.

To help you get it right, the ATO can include information reported about contractor payments to you in its:

  • pre-filling service. If you’re a sole trader, you or your registered tax agent may use the pre-filling service to easily include these payments in your tax return.
  • Reported transactions service in ATO online platforms. These records give you transparency about the data that has been provided about your business transactions.

Building and construction

If you are running a business primarily in the building and construction industry, you must lodge a Taxable payments annual report (TPAR) if you:

  • make payments to contractors or subcontractors for building and construction services
  • have an Australian business number (ABN).

Payments made to employees are not reported in your TPAR.

Each year, you must:

  • review if you need to lodge a TPAR
  • report these payments on your TPAR by 28 August.

When a business operates primarily in building and construction services

You are considered to be a business that primarily operates in building and construction services if any apply:

  • in the current financial year, 50% or more of your business income is earned from providing building and construction services
  • in the current financial year, 50% or more of your business activity relates to building and construction services
  • in the financial year immediately before the current financial year, 50% or more of your business income was earned from providing building and construction services.

To determine if an entity is in the building and construction industry, see Subregulation 64(6): Taxation Administration Amendment Regulation 2012 (No.1)

What are building and construction services

Only report payments you make to contractors for building and construction services.

Contractors can be sole traders, companies, partnerships or trusts.

The definition of building and construction services is broad. It can include any of the activities listed below if they are performed on, or in relation to, any part of a building, structure, works, surface or sub-surface:

  • alteration
  • assembly
  • construction
  • demolition
  • design
  • destruction
  • dismantling
  • erection
  • excavation
  • finishing
  • improvement
  • installation
  • maintenance, excluding the maintenance, service or repairs of equipment and tools
  • management of building and construction services
  • modification
  • organisation of building and construction services
  • removal
  • repair, excluding the service or repairs of equipment and tools
  • site preparation.

Examples of building and construction services

The following occupations and work activities satisfy the definition of building and construction services:

  • architectural work, including drafting and design
  • asphalt and bitumen work
  • assembly, installation or erection of prefabricated houses
  • block laying
  • bricklaying
  • building of room components. For example, kitchens, bathroom components,
  • laundry components, cupboards and similar components
  • cabinet making, including joinery and off-site fabrication for installation at a
  • building site
  • cable laying
  • communications construction
  • concreting, including formwork, pouring and finishing
  • construction and sealing roads
  • construction management
  • decorating
  • demolition
  • distribution line construction
  • drainage work
  • dredging
  • earthworks
  • electrical machinery, heavy, installation (on-site assembly)
  • electrical work, including electrical inspection
  • electrical construction
  • elevator and escalator installation and work
  • engineering
  • equipment rental with operator. If there is no operator, it is rental of a good and not a building and construction activity
  • erection of frames
  • erection of scaffolding
  • excavation and grading
  • fencing
  • finishing
  • flood control system construction
  • flooring. For example, tiling, laying carpet, laying linoleum, timber flooring,
  • floating floors, resilient flooring, slate tiles and similar flooring
  • foundation work
  • gas plumbing
  • glass and glazing work
  • hanging or installing doors
  • installation of fittings
  • installation of hard-wired alarm systems. For example, security, fire, smoke and
  • similar alarms
  • installation of hot water systems
  • installation of prefabricated components. For example, kitchens, bathroom components, laundry components, cupboards and similar components
  • installation of prefabricated temperature-controlled structures
  • installation of septic tanks
  • installation of solar devices. For example, hot water or electricity connections
  • installation of tanks
  • installation of window frames
  • installation of windows
  • installation or work on devices for heating and cooling
    insulation work. For example, walls, roofs, windows and similar structures
  • internet infrastructure construction
  • irrigation system construction
  • land clearing
  • landscaping construction, including paving and design
  • levelling sites
  • painting. For example, internal and external surfaces, including roofs
  • pile driving
  • pipeline construction
  • plastering or other wall and ceiling construction
  • plumbing work, including plumbing inspection
  • preparation of site
  • project management
  • rendering or other internal or external surface finishes
  • retaining wall construction
  • river work construction
  • roofing and guttering
  • sewage or stormwater drainage system construction
  • stonework
  • surveying
  • swimming pool installation
  • swimming pool construction. For example, below ground concrete or fibreglass
    tiling. For example, walls and similar structures
  • timber work
  • wallpapering
  • waterproofing interior and exterior surfaces
  • weatherboarding.

Examples of buildings, structures, works, surfaces or sub-surfaces

The following is a list of what we consider to be buildings, structures, works, surfaces or sub-surfaces:

  • aerodrome runways
  • apartments
  • breakwaters
  • bridges
  • canals
  • commercial buildings
  • communications, internet and electrical infrastructure
  • dams
  • duplex houses
  • electricity power plants
  • elevated highway
  • flats
  • footpath, kerb and guttering
  • furnaces
  • garages
  • golf courses
  • harbour works
  • high-rise flats
  • highways
  • housing buildings, including prefabricated housing
  • industrial buildings
  • jetties
  • lakes
  • mine sites
  • office buildings
  • oil refineries
  • parking lots
  • pipelines
  • power plants
  • railways
  • roads
  • semi-detached houses
  • sewage storage and treatment plants
  • sheds
  • sports fields
  • streets
  • television or radio transmission towers
  • tunnels
  • water tanks
  • waterworks.

Courier services

You must lodge a Taxable payments annual report (TPAR) if:

  • your business provides courier services to other people or businesses
  • you paid contractors or subcontractors to provide these courier services on behalf of your business
  • you have an Australian business number (ABN).

Payments made to employees are not reported in your TPAR.

Each year, you must:

  • review if you need to lodge a TPAR
  • report these payments on your TPAR by 28 August.

When your business provides courier and other services

If courier services are only part of what your business provides, you may need to fill out a TPAR.

You should:

  • work out how much of your business income came from courier services
  • add up the money your business was paid for providing courier services for the financial year. A financial year is the 12 months from 1 July to 30 June
  • include payments for services provided by both employees and contractors or subcontractors
  • work out the total amount of your business income for the year.

If an arrangement with your customer involves providing both goods and courier services, determine if the courier services are either:

  • composite supply of delivering the goods: delivery is essential to the supply of the goods. Therefore, the delivery involved is not a ‘courier service’
  • mixed supply of courier services and goods: the delivery part of the service is a large cost or could be made as a separate supply. For example, the delivery part is a ‘courier service.’

If the total payments, you receive for courier or delivery services are:

  • 10% or more of your gross business income: you must lodge a TPAR
  • less than 10% of your gross business income: you do not lodge a TPAR.

From 1 July 2019, if your business provides courier and road freight services, you must combine the payments you receive for both services. Do this when you work out if you need to lodge a TPAR.

You can also choose to lodge a TPAR even if you are:

  • under the 10% threshold
  • unsure if you will be under the threshold.

Examples of courier services

Courier services are when items or goods are collected from or delivered to any place in Australia using the following methods:

  • bicycle or other non-powered means of transport
  • drones
  • on foot
  • vehicles, including:
    • car
    • motorcycle
    • motorised scooter
    • station wagon
    • truck
    • ute
    • van.

Courier services are usually door-to-door services. These services are used for specialty deliveries or for small parcels or packages.

Goods transported using courier services mostly include parcels, packages, letters and food.

If you sell goods and give the option of a delivery service, you are supplying a courier service.

Courier services do not include:

  • delivering goods your business provides. For example, if delivery is the only way your customers can receive the goods
  • passenger transport services. For example, buses and taxis
  • freight transport from one location to another. This includes transporting large quantities of items, goods or commodities by:
    • air
    • rail
    • road. This is usually by heavy vehicle trucks or larger vehicles
    • sea.

Cleaning

You must lodge a Taxable payments annual report (TPAR) if all conditions are met:

  • your business provides cleaning services to other people or businesses
  • you paid contractors or subcontractors to provide these cleaning services on behalf of your business
  • your business has an Australian business number (ABN).

Payments made to employees are not reported in your TPAR.

Each year, you must:

  • review if you need to lodge a TPAR
  • report these payments on your TPAR by 28 August.

When your business provides cleaning and other services

If cleaning services are only part of what your business provides, you may need to fill out a TPAR.

You should:

  • work out how much of your business income came from cleaning services
  • add up the money your business was paid for providing cleaning services for the financial year. A financial year is the 12 months from 1 July to 30 June
  • include payments for services provided by both employees and contractors or subcontractors
  • work out the total amount of your business income for the year.

If the total payments, you receive for cleaning services are:

  • 10% or more of your gross business income: you must lodge a TPAR
  • less than 10% of your gross business income: you do not lodge a TPAR.

You can also choose to lodge a TPAR even if you are:

  • under the 10% threshold (see examples below)
  • unsure if you will be under the threshold.

Examples of cleaning services

Cleaning services can include, but are not limited to, the following cleaning activities:

  • carpet
  • chimney
  • exterior, except sandblasting
  • gutter
  • interior
  • park and park facilities
  • road and street sweeping
  • swimming pool.

The cleaning services can be done on:

  • buildings
  • equipment
  • events, including:
    • agricultural
    • cultural
    • entertainment
    • scientific
    • staging of sporting
    • technological
  • exhibitions
  • industrial machinery
  • places
  • residences. For example, homes
  • surfaces
  • structures
  • transport vehicles, including:
  • airplanes
  • buses
  • cars and other motor vehicles
  • ferries
  • ships
  • trains
  • trams
  • trucks.

Information technology

You must lodge a Taxable payments annual report (TPAR) if all conditions are met:

  • your business provides information technology (IT) services to other people or businesses
  • you paid contractors or subcontractors to provide these IT services on behalf of your business
  • you have an Australian business number (ABN).

Payments made to employees are not reported in your TPAR.

Each year, you must:

  • review if you need to lodge a TPAR
  • report these payments on your TPAR by 28 August.

When your business provides IT and other services

If IT services are only part of what your business provides, you may need to fill out a TPAR.

You should:

  • work out how much of your business income came from IT services
  • add up the money your business was paid for providing IT services for the financial year. A financial year is the 12 months from 1 July to 30 June
  • include payments for services provided by both employees and contractors or subcontractors
  • work out the total amount of your business income for the year.

If the total payments, you receive for IT services are:

  • 10% or more of your gross business income: you must lodge a TPAR
  • less than 10% of your gross business income: you do not lodge a TPAR.

You can also choose to lodge a TPAR even if you are:

  • under the 10% threshold
  • unsure if you will be under the threshold.

Engaging overseas contractors

If you are providing a relevant IT service and engaging a contractor to provide that service on your behalf, the payment to that contractor is reported in the TPAR.

Contractors can be located outside of Australia and may not have an ABN. There is no exclusion based on the location or tax residency of the payee.

If an ABN is not provided, you may need to withhold payment under the pay as you go (PAYG) withholding arrangements.

Examples of IT services

IT services can be completed at a work site or online.

Some examples of IT services include:

  • computer facilities management
  • computer hardware consulting
  • computer network systems design and integration
  • computer programming
  • computer software consulting
  • customised software development
  • internet and web design consulting
  • IT consulting
  • software installation
  • software simulation and testing
  • systems analysis
  • technical support.

Examples of activities that are not IT services include:

  • using IT hardware or software in your business to provide a service (other than an IT service)
    • for example, you would not be providing an IT service if your business uses software
  • to operate an accounting, project management or word processing business
  • mass producing computer software. For example, reproduction of recorded media
  • the leasing or hiring out of computers or other data processing equipment
  • providing data processing services or computer data storage and retrieval services
    installing computer cables.

 

Road freight services

You must lodge a Taxable payments annual report (TPAR) if all conditions are met:

  • your business provides road freight services to other people or businesses
  • you paid contractors or subcontractors to provide these road freight services on behalf of your business
  • you have an Australian business number (ABN).

Payments made to employees are not reported in your TPAR.

Each year, you must:

  • review if you need to lodge a TPAR
  • report these payments on your TPAR by 28 August.

When your business provides IT and other services

If road freight services are only part of what your business provides, you may need to fill out a TPAR.

You should:

  • work out how much of your business income came from road freight services
  • add up the money your business was paid for providing road freight services for the financial year. A financial year is the 12 months from 1 July to 30 June
  • include payments for services provided by both employees and contractors or subcontractors
  • work out the total amount of your business income for the year.

If an arrangement with your customer involves providing both goods and road freight services, you need to determine if the road freight services are either:

  • composite supply of delivering the goods: the delivery is essential, ancillary or incidental to the supply of the goods. Therefore, the delivery involved is not a ‘road freight service’
  • mixed supply of road freight services and goods: the delivery part of the service is a large cost or could be made as a separate supply. Therefore, the delivery part is a ‘road freight service.’

If the total payments, you receive for road freight services are:

  • 10% or more of your gross business income: you must lodge a TPAR
  • less than 10% of your gross business income: you do not lodge a TPAR.

From 1 July 2019, if your business provides road freight and courier services, combine the payments you receive for both services. Do this when you work out if you need to lodge a TPAR.

You can also choose to lodge a TPAR even if you are:

  • under the 10% threshold (see examples below)
  • unsure if you will be under the threshold.

Security, investigation, or surveillance services

You must lodge a Taxable payments annual report (TPAR) if:

  • your business provides security, investigation or surveillance services to other people or businesses
  • you paid contractors or subcontractors to provide these security, investigation or surveillance services on behalf of your business
  • you have an Australian business number (ABN).

Payments made to employees are not reported in your TPAR.

Each year, you must:

  • review if you need to lodge a TPAR
  • report these payments on your TPAR by 28 August.

When your business provides security, investigation, surveillance and other services

If security, investigation or surveillance service are only part of what your business provides, you may need to fill out a TPAR.

You should:

  • work out how much of your business income came from security, investigation or surveillance services
  • add up the money your business was paid for providing security, investigation or surveillance services for the financial year. A financial year is the 12 months from 1 July to 30 June
  • include payments for services provided by both employees and contractors or subcontractors
  • work out the total amount of your business income for the year.

If the total payments, you receive for security, investigation or surveillance services are:

  • 10% or more of your gross business income: you must lodge a TPAR
  • less than 10% of your gross business income: you do not lodge a TPAR.

You can also choose to lodge a TPAR even if you are:

  • under the 10% threshold
  • unsure if you will be under the threshold

Example of security, investigation or surveillance services

Security services

Security services include patrolling, protecting, screening, watching or guarding any people, premises or property by any means.

Investigation services

Investigation services include searching inquiries by any means into one or more specific individuals or matters. The purpose of these inquiries is to decide on the facts or gather evidence.

Investigation services

  • relate specifically to security and surveillance
  • involve more than information gathering
  • do not include routine record or police checks, or telemarketers conducting surveys.

Surveillance services

Surveillance services include watching or observing an area or location and monitoring security systems. These services may overlap with security services.

Examples of security, investigation or surveillance activities include:

  • alarm monitoring and response
  • armoured car service
  • body guarding or close personal protection
  • burglary protection
  • crowd, event or venue control
  • detective agency service
  • lock smithing
  • night watch service
  • operating a security control room or monitoring centre
  • operating security screening equipment. For example, prohibited item detectors, xray scanners and explosive trace detection
  • security guard service.

Security, investigation or surveillance services do not include:

  • academic or market research
  • manufacture or retail of security, investigative or surveillance devices. For example, security alarms, cameras or voice recorders
  • manufacture, retail, installation, maintenance or repair of fire alarm systems
  • police services
  • providing aerial surveying or mapping services
  • providing key cutting or duplication services
  • surveillance of country borders.

This article is general information only and does not provide advice to address your personal circumstances. To make an informed decision you should contact an appropriately qualified professional.