Businesses operating in the Building & Construction Industry are required to lodge Taxable Payments Annual Report due on 21 July 2014, in the circumstances set out hereunder.
Introduced on 1 July 2012, the regime requires businesses involved in the Building & Construction Industry (BCI) to report to the Tax Office amounts paid to contractors and subcontractors for the provision of Building & Construction services. The rationale for the introduction of this new reporting regime is that the Tax Office has identified a higher level of non-compliance in the BCI, specifically in relation to GST, Declaration of Income and also the Personal Services Income (PSI) Rules.
It is anticipated that the Tax Office will use the information obtained in the Taxable Payments Annual Reports to conduct a data-matching exercise, whereby they cross-check that the payments recorded in the Report are declared on the Tax Returns and BAS of BCI suppliers identified in the Report. With respect to PSI, where from a Report it is determined that a supplier contractor receives many payments from the one business, an investigation may be conducted by the Tax Office to determine whether the supplier contractor has exceeded the 80% rule contained in the PSI legislation.
A business is “primarily” in the BCI and therefore may be required to report if any of the following apply:
a) In the current financial year, 50% or more of the business income is from providing BCI services, or
b) In the current financial year, 50% or more of the business activity relates to BCI services, or
c) In the previous financial year, 50% or more of the business income is from providing BCI services.
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