Payments government entities need to report in their TPAR

When a government entity must lodge a TPAR

Federal, state, territory and local government entities must report:

• the total payments they make to an entity, wholly or partly, for providing services
• federal, state and territory entities also report the total grants paid to people or organisations that have an ABN
• by 28 August each year.

Local government entities don't need to report grants.

Some government entities do not need to lodge a TPAR.

Government entities that must report

Government entities that must report include:

• federal government departments
• executive or statutory agencies
• statutory authorities
• state or territory government departments and agencies
• local governing bodies established by or under state or territory law
• government-owned corporations
• organisations that are either established
  • by the federal government, a state or a territory (whether under a law or not) to carry on an enterprise
  • for a public purpose by an Australian law 
  • can be separately identified because of their location or nature of the activities they carry on, (this includes organisations that are part of a department or branch). 

Government entities that don't report

Some government entities are exempt from lodging a TPAR. However, these exemptions don't apply to departments of the Commonwealth, a state or territory.

Government entities are exempt if they are:

• providers of education courses
• providers of childcare, including registered carers and providers of approved childcare services
• hospitals
• providers of medical services
• cemeteries, cemetery boards or authorities
• ministerial councils or related bodies, including those established by the Council of Australian Governments
• Aboriginal land councils
• national law bodies established under laws enacted by the states and territories
• public museums, public libraries or public art galleries
• community associations, for example, parents and friends' associations
• industry or professional associations, including registration and licencing boards and advisory councils
• water catchment authorities, catchment councils and natural resource management boards
• trustees of trusts or managers of funds established for the public benefit or in the public interest
• superannuation funds
• defence force mess halls, canteens, brigades or clubs
• public zoological gardens, public botanical gardens, public parks, public reserves or public alpine resorts
• commissions of inquiry or Royal Commissions
• courts or tribunals
• Commonwealth, state or territory Houses of Parliament
• community-based volunteer emergency services. For example, Country Fire Associations, volunteer fire brigades and State Emergency Services
• entities with the primary purpose of promoting the arts
• entertainment, recreation or sporting venues. This includes showgrounds, stadiums and racecourses, or entities with the primary purpose of managing such venues
• seaports or airports
• prisons, detention centres, remand centres or corrections offices
• embassies or consular offices.

A non-exempt government entity must report payments to us even if they are making payments on behalf of an exempt government entity.

Payments for services to report

Federal, state, territory and local government entities need to report payments made to an entity, wholly or partly, for providing services in the TPAR. This includes payments made to overseas suppliers and governments.

Services can include actions that:

• a business performs
• provide you with assistance or support
• may be performed on goods or in conjunction with the supply of goods. For example, a supplier delivers goods and then performs an installation
• are performed as part of trade or commerce
• may be performed under a contract but not an employment contract.

If you receive invoices that include both goods and services, whether itemised or combined, report the whole amount of the payment. Do this unless the supply of the services is incidental to the supply of goods.

Payments you do not need to report

You don't need to report payments made:

• for goods only, which includes any form of tangible property
• made to other Australian government entities
• made electronically by  
  • BPAY
  • recurring direct debit
  • credit or debit card
  • third-party payment processors facilitating any of the above methods 
• for telephone and internet services
• for electricity, water, sewerage or gas
• for transportation of employees. This includes airfares, taxi fares, train or bus fares, or fares for water transport
• for insurance
• for accommodation in commercial premises, (for example, rent payments)
• for accommodation in a hotel, motel, inn, hostel, boarding house, caravan park or camping ground
• for a lease of goods
• for the creation, grant, transfer, assignment or use of a right under licence, (for example, a licence to use a software product)
• for financial supplies( for example, bank fees)
• for membership to a professional association or body
• for services relating to court or tribunal functions, ( for example, payments to jurors, witnesses or advocates for minors).

Speak to your software provider on how best to exclude these payments from your report. However, we will accept these types of payments if it creates an increased administrative burden to exclude them.

Unpaid invoices as of 30 June each year

Only report payments that have been paid on or before 30 June each year.

For example, if you receive an invoice in June but you don't pay that invoice until July, report that payment in the next financial year (the year you paid it).

PAYG withholding payments

Report PAYG withholding payments in your PAYG withholding annual report or through Single Touch Payroll (STP).

Don't report in PAYG withholding payments in your TPAR.

Examples include payments to:

• employees
• workers engaged under a voluntary agreement to withhold
• workers engaged under a labour-hire or on-hire arrangement, (this includes a labour hire firm that hires workers under a labour-hire arrangement to provide services).

Payees who don't quote an ABN

If an ABN is not provided, you may need to withhold an amount from the payment for that supply under the PAYG withholding arrangements.

Report the amounts withheld in either the:

• TPAR
• PAYG payment summary withholding — where ABN not quoted.

Report this information in one of these annual reports, not both.

If a supplier does not provide an ABN, see Statement by a supplier not quoting an ABN.

Grants paid to people or organisations

Federal, state and territory government entities only need to report grants paid to people or organisations that have an ABN. This includes grants paid to not-for-profit organisations that have an ABN.

Grants don't need to be reported if:

• you are a local government entity
• the grant was paid to an individual who does not have an ABN
• the grant was paid to another government entity.

What is a grant

Grants can take many forms. They can include:

• subsidies
• rebates
• sponsorships and similar arrangements.

Grants usually:

• are explicitly tied to a government policy or goal
• are disbursed on a one-off or longer-term basis. They are not provided as ongoing, permanent funding
• require recipients to submit applications to receive grants
• have conditions attached. For example, reporting obligations or the requirement to include government logos on marketing materials
• don't need to be repaid.

Refer to your jurisdiction’s financial management guidance on what programs are considered grants. For example, federal government entities should refer to the Commonwealth grants rules and guidelines.

If multiple grant payments were made:

• Under the same grant program name, to the same business in a financial year, each payment may be reported separately or added together. If added together, the date of the grant payment can be reported at the end of the relevant financial year (for example, 30 June 2021).
• Under different grant programs to the same business in a financial year, the total of the payments made in the relevant financial year under each program name must be reported separately.

Non-assessable non-exempt grants

Some grants that you report may be treated as non-assessable non-exempt (NANE) government income for tax purposes. Examples of these grants include:

• COVID-19 business support payments
• Natural disasters
• Water infrastructure improvement payments

For information about how to report a NANE payment in your TPAR go to TPAR contractor details to report.

If a grant is NANE income for a recipient, they don't need to include the amount in their assessable income. For more information on how grant recipients can treat grant amounts as NANE income, see Non-assessable non-exempt government grants for grant recipients.

COVID-19 business support payments

Eligible government COVID-19 business support payments may be NANE income for tax purposes.

There are 2 types of government grant and support programs, under which COVID-19 payments to support businesses may be non-taxable (NANE).

These are:

• state and territory grants relating to the recovery from COVID-19 paid in the 2020–21 or 2021–22 financial year
• Australian Government support payments established under the COVID-19 Business Assistance Program paid in the 2021–22 financial year.

For the list of eligible grants and support programs that have been formally declared by the Minister under a legislative instrument to be eligible for NANE treatment, see Eligible COVID-19 business grants and support programs.

Natural disasters - storms and floods

Recovery grants

Small businesses and primary producers affected by storms and floods may be eligible to receive special disaster recovery grants.

The following storms and floods had certain categories of grants paid under the Disaster Recovery Funding Arrangements 2018External Link that are treated as NANE income:

• Cyclone Seroja (occurred on 11 and 12 April 2021) – Category C recovery grants are NANE income for the 2021–22 financial year and onwards.
• 2021 storms and floods (occurred between 19 February 2021 and 31 March 2021) – Category D recovery grants are NANE income for 2020–21 financial year and onwards.
• 2019 North Queensland floods (occurred between 25 January 2019 and 28 February 2019) – Category C or D recovery grants are NANE income for the 2018–19 financial year and onwards.

2019 North Queensland flood: restocking, replanting or farm infrastructure grants

Primary producers may be eligible to receive certain grants for replacing or repairing farm infrastructure, restocking or replanting, or a similar purpose.

These grants are NANE income for the 2018–19 financial year and later financial years if the agreement was entered into between 1 February 2019 and 1 July 2019.

Natural disasters - bushfires

• 2019 to 2020 Bushfires Relief Recovery Payments  
  • any bushfire relief recovery or benefits provided by any level of government, including  
    • Commonwealth
    • state
    • territory
    • a municipal corporation
    • a local governing body. 

Water infrastructure improvement payments

Payments for Sustainable rural water use and infrastructure programs are NANE income if the participant (recipient) chooses to have the payment treated this way. The participant can also choose to treat it as ordinary income.

For more information on the choice options and eligible programs visit Sustainable rural water use and infrastructure program.