The following information has been provided by the ATA, WRF as the state association needs to prepare a response due by the 28th of Aug 18.  Can you please consider and let us know your thoughts, some questions below.

The Government has released exposure draft legislation and an explanatory memorandum to extend the taxable payment reporting system to three new industries, including road freight.

Information from Treasury

Explanatory memorandum

Exposure draft

The TPRS is a transparency measure that applies to the building and construction industry. It requires businesses in the building and construction industry to report payments they make to contractors for building and construction services to the ATO. The Government states that evidence suggests that the program has improved contractor tax compliance in the industry.

The extension of the TPRS to entities that provide courier or cleaning services was announced in the 2017-18 Budget and commenced from 1 July 2018.

In the 2018-19 Budget, the Government announced that it will extend the TPRS to road freight from 1 July 2019.

We have prepared some questions for ATA associations and your members to consider:

    1. The exposure draft amendments apply to businesses that supply road freight services to others and transact with contractors to provide those services. An example would be a trucking company that uses sub-contractors. As written, the amendments do not apply to businesses that contract for road freight services to support their own operations (eg: a manufacturer that sub-contracts the delivery of its products).
      • In your view, should taxable payments reporting also apply to these ancillary operators?
      • Are you aware of any instances where ancillary operators have failed to pay tax correctly?
    2. The draft does not define road freight services, but instead proposes that the ATO and the courts would rely on its ordinary meaning. Given the growth in web or app based intermediaries between industry customers and trucking businesses, should road freight be defined to include these intermediaries?
    3. Under the exposure draft, a business receiving payments for road freight and/or courier services would be subject to a combined 10 per cent turnover threshold for before the reporting obligation would apply. The turnover threshold would apply to the payments received by the business, not the payments to subcontractors made by the business. Thinking of the businesses you know:
      • would a 10 per cent combined threshold be appropriate?
      • Would it be low enough to capture all the businesses who should be required to report, but high enough to avoid capturing businesses that very rarely provide road freight or courier services?
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