A Taxable Payments Annual Report (TPAR) is a report that certain businesses are required to file with the Australian Taxation Office (ATO) each year. The report provides information on payments made to contractors or subcontractors during the financial year. The purpose of the TPAR is to ensure that all income earned by contractors is correctly declared, and to help the ATO identify businesses that may be misclassifying their workers as contractors instead of employees.
The requirement to file a TPAR applies to businesses in certain industries, including construction and building services, road freight or courier services, cleaning services, security, investigation, and surveillance services, and information technology (IT) services. To be required to file a TPAR, a business must derive 10% or more of its revenue from the provision of those services.
When filing a TPAR, businesses are required to provide the following information for each contractor: contractor name and address, contractor Australian Business Number (ABN), and the amount paid to the contractor for the year. This information can be obtained from contractor invoices or from bookkeeping software such as Xero.
Businesses are required to file their TPAR by August 28th each year, unless they have an agreed-upon extension. Failure to file a TPAR can result in penalties from the ATO.
In example, XYZ company is a construction company that derives more than 10% of its revenue from the provision of construction services. Therefore, XYZ company is required to file a TPAR with the ATO each year. The company must provide information on all payments made to contractors, including the contractor name and address, contractor ABN, and the amount paid to the contractor for the year. The company can obtain this information from contractor invoices or from its bookkeeping software, and must submit the report by August 28th each year.