Businesses in the building and construction industry must now report the total payments they make to each contractor for building and construction services each year. This change came into effect 1 July 2012.

These payments are to be reported to the ATO as part of the Taxable payments annual report.

Who needs to report

Businesses in the building and construction industry will need to provide the report if all of the following apply to them:

  • The business is primarily in the building and construction industry
  • Payments are made to contractors for building and construction services
  • The business has an Australian business number (ABN).

A business is considered to be primarily in the building and construction industry if any of the following apply:

  • In the current financial year, 50% or more of the business income is derived from providing building and construction services
  • In the current financial year, 50% or more of the business activity relates to building and construction services
  • In the financial year immediately before the current financial year, 50% or more of the business income was derived from providing building and construction services.

Details to report

For each contractor the following details will need to be reported each financial year:

  • ABN (if known)
  • Name
  • Address
  • Gross amount paid for the financial year. This is the total amount paid inclusive of GST.
  • Total GST included in the gross amount paid.

When to report

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 the activity statement is lodged quarterly, it can be lodged by 28 July 2013.