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In brief - Changes came into effect on 1 July 2012
On 1 July 2012 a new Australian Taxation Office (ATO) reporting
requirement came into effect for businesses which are primarily in
the building and construction industry.
Payments to contractors to be reported for data matching by
ATO
Businesses which are primarily in the building and construction
industry will now be required to report, on an annual basis,
information about payments made to contractors for building and
construction services. The first annual report is due in July
2013.
It is understood that the annual reports will be used by the ATO
for data matching purposes as a means of ensuring that all income
is reported by contractors.
New requirements apply to businesses which meet three
criteria
The new reporting requirement will apply to any business
that:
is primarily in the building and construction industry (ie 50%
or more of business activity relates to building and construction
services in the current financial year or 50% or more of business
income is derived from providing building and construction services
in the current financial year)
makes payments to contractors for building and construction
services; and
has an Australian Business Number (ABN).
Businesses which met the criteria the previous financial
year
The reporting requirement will also apply in a given financial
year to a business that has an ABN, makes payments to contractors
for building and construction services and which derived 50% or
more of its business income from providing building and
construction services in the financial year immediately before the
current financial year.
Contractor's details, payments and GST
If the new reporting requirement applies to your business, you
will need to report the name and ABN (if known) of each contractor
to which payments are made, the contractor's address, the gross
amount paid inclusive of GST and the total GST included in the
gross amount.
Start recording contractor payments immediately
The first reports are due in July 2013. It is important for
affected businesses to take steps immediately to ensure that all
information required to be reported about amounts paid to
contractors is sufficiently recorded. This also applies to invoices
which were issued prior to 1 July 2012 but which are not paid until
on or after 1 July 2012.
If you require any advice in relation to the new reporting
requirement or wish to discuss this article, please do not hesitate
to contact us.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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