The Taxable Payments Reporting System has recently been expanded to
several more industries. This article informs business owners whether they
will be caught within these new rules and be required to report.
The Taxable Payments Reporting System (TPRS) is a Black Economy
/ Cash Economy transparency measure that requires businesses that
operate within prescribed industries to report payments they make
to contractors who operate within that industry. The TPRS was
originally implemented in 2012 to apply to businesses operating
primarily in the building and construction industry.
With the success of TPRS in the building and construction industry
(in its first year of operation alone, additional income tax and GST
liabilities of more than $2 billion were voluntarily reported to the
ATO by businesses whose incomes were reported under the regime),
the Government has expanded the regime with legislation now passed
to include the following industries:
• Security providers and investigation services;
• road freight transport; and
• computer system design and related services (for payments made
from 1 July 2019, with the first report due on 28 August 2020).
Use the following ATO flowchart to determine whether a client is
required to report under the latest expansion to the regime.
Non-Reportable (in this report)
Furniture removal service
Passenger transport services
Road freight forwarding
Operation of road freight
Truck hire (with driver)
Providing crating and packing
for road freight transport
Leasing or hiring trucks
Road freight services have been added to the TPRS along with courier
services; ensuring that any service where goods are transported
over road are covered by the TPR regime (but note the different
commencement dates – payments made to contractors for road freight
services are not required to be reported until 1 July 2019). Being
such a large country, with vast distances between population centres,
road freight services are widespread. Every day, for example, more
than 4,000 heavy trucks make the 12-hour trip between Sydney and
‘Road freight’ refers to the transport of goods by freight over road,
which is not included in the meaning of a ‘courier’ service. Typically,
goods will be sent by road freight where the goods are transported in
bulk usually using larger vehicles as per the following table:
Do you have an Australian business number (ABN)?
Have you made payments to one or more contractors
to provide the relevant service on your behalf?
You must report the payments you made to these contractors in
Taxable payments annual report, unless a reporting exemption
applies to you (see Appendix 1 of this Ruling).
Have you supplied a 'relevant service'?
- road freight service
- secruity, investigation or surveillance service
- information technology service
My Tax Savers
Where you determine that you are required to report (regardless
of industry), the reporting process can be automated with
software. Latest versions of accounting software can be set up
to capture the relevant payments made during the year. At year-
end, the software can generate a complying report that can then
be lodged electronically with the ATO. Talk with your Accountant
or software provider about how you can set this up.