As part of the Federal Budget, businesses in the building and construction industry need to report for the period starting 1 July 2012 the total payments they make to each contractor for building and construction services each year to the ATO by completing a taxable payments annual report. The aim of the system is to improve compliance with tax obligations by those contractors who are currently not doing the right thing. The information reported about payments made to contractors will be used for the ATO’s data matching to detect contractors who have not lodged tax returns and who have not included all their income on tax returns that have been lodged.
Who needs to report?
From 1 July 2012, you need to report if all of the following apply:
- you are a business that is primarily in the building and construction industry
- you make payments to contractors for building and construction services
- you have an Australian business number (ABN).
You are considered to be a business that is primarily in the building and construction industry if any of the following apply:
- in the current financial year, 50% or more of your business income is derived 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 derived from providing building and construction services.
Details you need to report
For each contractor, you need to report the following details each financial year:
- ABN, if known
- Name
- Address
- gross amount you paid for the financial year (this is the total amount paid inclusive of GST)
- total GST included in the gross amount you paid.
Payments you need to report
You need to report payments you make to contractors for building and construction services.
Building and construction services 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
- Management of building and construction services
- Modification
- Organisation of building and construction services
- Removal
- Repair
- Site preparation
For a list of occupations and work activities that qualify as building and construction services and dor examples of what the ATO considers to be buildings, structures, works, surfaces or sub-surfaces click here.
When to Report
Your Taxable payments annual report is due 21 July each year. The first Taxable payments annual report is due 21 July 2013 for payments made in the 2012-13 financial year. In this first year, if you lodge your activity statement quarterly, you can lodge by 28 July 2013.
If you have any questions please do not hesitate to contact us at ourteam@azuregroup.com.au
Comment