New tax may be required for businesses offering courier and delivery services

The Australian Taxation Office (ATO) is working to stop businesses gaining an unfair advantage that engage contractors to provide courier or road freight services by launching a new tax campaign.

In a new campaign launched by the ATO, a Taxable payments annual report (TPAR) may be required to level playing field for couriers and road freight businesses.

As revealed in Australia Post’s 2020 Inside Australian Online Shopping Report that was released on Friday 19 June, the global COVID-19 pandemic has set a new baseline for e-commerce in Australia and logistic and transport companies have experienced a surge in last mile deliveries.

ATO Assistant Commissioner Peter Holt said the ATO was working to prevent businesses from gaining an unfair advantage over others who are doing the right thing.

“It is now more important than ever we  create a fair and equal system for businesses in the courier and road freight sector and one way is through the Taxable payments reporting system (TPRS),” he said.

Peter said many businesses are offering new or expanded services, including courier and delivery services in response to COVID-19 restrictions.

“The information reported on the TPAR is used to make sure that contractors are reporting their correct income and paying the right amount of tax, so that honest businesses don’t lose out to those under-declaring or not declaring income,” he said in a statement.

In 2018 the TPRS was expanded to include businesses that pay contractors to provide courier and delivery services on their behalf, and last year it was further extended to include businesses that pay contractors to provide road freight services on their behalf.

Under TPRS conditions, if a business pays contractors to provide courier or road freight services on its behalf, it needs to record these payments, including cash payments, and check if it needs to lodge a TPAR.

It also applies even if courier or road freight services are just an offering as part of the business.

According to the to, Recording all payments made to contractors throughout the year will help businesses get it right and make it easier when the time comes to check should a TPAR need to be lodged.

The TPAR is due by 28 August each year. Businesses who provide courier services who did not lodge a TPAR in 2019 may still need to do so.

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