Taxable Payments Annual Report
Do you hire contractors to provide services to your clients? If yes, then you need to file a taxable payments annual report or TPAR and submit it to the Australian Tax Office (ATO). This report discloses all the payments you’ve made to the contractors you hired for rendering your services.
Now, there are probably plenty of questions running in your mind. Who exactly needs to submit a TPAR? Who doesn’t need to make a TPAR? What is there and what is not there in a TPAR?
Let’s go through these questions one by one.
Who Needs to File a TPAR?
TPAR is a report for service providers. If you have an Australian Business Number and hire contractors for the following services, you need to submit a TPAR to the ATO by 28th August every year, starting from 1st July of the previous year:
- Information technology
- Road freight
- Security, investigation and surveillance
- Government services
- Maintenance of buildings
- Event management
- A mix of two or more of the above
These are the service providers who usually hire contractors to fulfill their operations. If you are into any of the above businesses with an Australian business number and have paid contractors for providing your services, you need to make a TPAR.
Who Doesn’t Need to Make a TPAR?
If your business model does not match the requirements of the above section, you do not need to submit a TPAR. Following are the businesses in Australia who don’t have to file a TPAR:
- Organizations who don’t have an Australian business number
- Businesses who don’t offer the services mentioned above
- If you haven’t made any payments to contractors for providing those services as of 30th June
What Does a TPAR Include?
Your taxable payments annual report needs to have the following details included in it:
- Your Australian Business Number
- Business Name
- Office Address
- Gross amount paid to contractors
- Total amount of GST paid by you
- Tax withheld by you when ABN wasn’t quoted
- Grants made to organizations or people having an ABN
- Statement by the supplier
Basically, you’re including the basic details about your organization and detailed information on your payments made to contractors.
What is Not Included in the TPAR?
Even though you’re giving detailed information on your payments, you don’t have to report all the payments. Following will not be included in your report:
- Payments made for materials
- Contractors without ABN
- Payments made within consolidated groups
- Invoices due as on 30th June
- Labour for miscellaneous work
- Private and domestic projects
- PAYG withholding payments
When you submit your TPAR with all the details, the ATO uses a software to compare it with the annual income of the contractors. In short, your report is used to check for tax evasion made by contractors.
You can be penalized for not making timely submissions too. They’re made online only, through the same software which the ATO uses to compare the data with annual income of contractors.
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