Australia: ATO extends the Taxable Payment Reporting System

In brief: The ATO's Black Economy Taskforce has extended the Taxable Payment Reporting System to encourage businesses to keep sufficient business records

The TPRS (Taxable Payment Reporting System) is a transparency/anti-evasion measure first applied to construction and building industry. It requires entities to report to the ATO payments they make to contractors. The ATO can then use data matching to determine if the contractors are declaring that income.

Pursuant to the 2017-18 Budget, the Government extended the operation of the TPRS to entities engaging in the courier and cleaning industries.

On 9 May 2018, the Government announced that from 1 July 2019, it would further extend the operation of the TPRS to entities engaging contractors in the supply of road freight, security, investigation, surveillance or IT services.

What services will be affected by the ATO's TPRS measures?

• Road freight - the transport of goods by freight over road (ie anything not included in the meaning of a "courier" service). It includes services such as road freight transport, log haulage, road freight forwarding, taxi trucks, furniture removal and road vehicle towing
• IT services - services that are provided in relation to computer hardware or software, or that are provided remotely through the internet. Examples include technical support, computer facilities management, internet and web design consulting.
• Security - protection from, or measures taken against, injury, damage, espionage, theft, infiltration or sabotage. That includes anti-burglary, lock smithing, body guards, security guards, armoured cars and any other services which can be provided to protect individuals or property
• Investigation services - a searching inquiry in order to ascertain facts that is typically conducted by a detective or an enquiry agency and may be matters not necessarily related to security. It does not refer to any services which may be used to gather information such as online search engines.
• Surveillance services - a general watch or observation maintained over an area or location, by one or more persons or by using devices such as motion detector alarms, cameras or recorders.

Entities in these industries will need to start reviewing their compliance and accounting processes to ensure they can comply with the new regime in the next financial year.

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