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Taxable payments reporting for the building and construction industry

From 1st July 2012, businesses in the building and construction industry have been obliged to record the total payments they make to each contractor for building and construction services each year, so that is can be reported on an annual basis. The first such report is due by 21st July 2013, so many companies will be grappling with this now for the very first time (companies who lodge their BAS quarterly will have an extra week, with an extended deadline of 28th July 2013).

Who needs to report?

You are obliged to report if:

  • you are a business that operates primarily in the building and construction industry
  • you make payments to contractors for building and construction services
  • you have an ABN

How does the ATO determine whether you meet these criteria?

If 50% of more of your business income in the financial year OR prior financial year was derived from providing building and construction services, OR 50% or more of your ‘business activity’ in the financial year relates to building and construction services, then you are deemed to operate ‘primarily’ in the the building and construction industry.

What do you need to report?

You will need to report each relevant contractor’s

  • Name
  • Address
  • ABN (if known)
  • Gross amount you paid them for the financial year, including GST
  • The total GST that was included in that gross amount

Need more info?

The ATO has provided a lot of fine print to clarify what types of payments are caught in the net of this reporting requirement, and defining occupations and work activities that qualify as building and construction services. You can read all the details here.