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  • Payments and grants government entities need to report in their TPAR

    Government entities need to report payments, wholly or partly, for services and grants paid to people and organisations with an Australian business number (ABN) in their Taxable payments annual report (TPAR).

    On this page

    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
    • the total grants paid to people or organisations that have an ABN
    • by 28 August each year.

    Local government entities and some other government entities do not need to report

    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 do not report

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

    Government entities are exempt if they are:

    • a local government entity
    • 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.

    Example: when the service is incidental to the supply of goods

    Sunshine Meadows Council is a local governing body. It orders 1,700 pens from an office supply company and pays an additional fee for delivery.

    Delivery of the pens is a service. However, since this service has been provided incidentally to the provision of the goods, it does not need to be reported.

    End of example

     

    Example: councillor sitting fees and allowances

    City Council is a local governing body. It pays councillor meeting attendance fees and allowances for services provided to the council.

    City Council does not apply the pay as you go (PAYG) withholding provisions to these payments.

    Payments to the councillor are considered payments, wholly or partly, for services. Therefore, these payments need to be reported in City Council’s TPAR.

    End of example

     

    Example: property management services

    Department ABC uses the services of an external property manager, Property Fix Services to complete various property management functions.

    Payments to Property Fix Services are considered a payment, wholly or partly, for services. Therefore, these payments need to be reported in Department ABC's TPAR.

    End of example

     

    Example: property manager engaging contractors and paying from own funds

    Property Fix Services (who is paid by Department ABC) engages contractors to provide property management services.

    Property Fix Services pays the contractors from their own funds.

    Property Fix is not a government entity. Therefore, they do not need to lodge a TPAR.

    End of example

     

    Example: property manager engaging contractors and paying from government entity funds

    Department ABC requests major changes to one of their buildings managed by Property Fix Services.

    Department ABC puts funds into a bank account they operate. This bank account is available to Property Fix Services to pay for works and contractors.

    Payments to these contractors are from Department ABC. Therefore, they need to be reported in the Department ABC's TPAR.

    End of example

    Payments you do not need to report

    You do not 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 do not 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).

    Do not 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 do not 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:

    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 do not 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
    • do not 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.

    Example: small business acceleration program

    A state government Department of Industry runs a small business acceleration program.

    This program involves a series of grants and rebates paid to small businesses in the state. The grants and rebates promote investment in business and support the economy.

    To be eligible for the program, small businesses must:

    • apply to the Department of Industry
    • carry on a business in the state
    • meet certain selection criteria.

    Applying for a grant

    Fresh Paws is a dog washing business located in the state. Under the small business acceleration program, it applies for a grant.

    As part of its application, Fresh Paws provides its ABN and other documents to meet the conditions of the grant program.

    Fresh Paws meets the eligibility criteria and is successful in receiving the grant. Therefore, the Department of Industry must report this grant on their TPAR.

    Applying for a rebate

    Tech Specialists is a business that teaches computer skills to the elderly. It's located in the state.

    It buys 5 laptops for use in its business. Under the small business acceleration program, it applies for a rebate for the cost of the computers.

    As part of its application, Tech Specialists provides its ABN and includes the invoices as proof of its expense.

    Tech Specialists meets the eligibility criteria and is successful in receiving the rebate.

    Therefore, the Department of Industry must report the rebate on their TPAR.

    End of example

    Non-assessable non-exempt grants

    Non-assessable non-exempt government (NANE) grants include:

    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 made to small businesses may be NANE income for tax purposes.

    The government has announced two types of grant programs that may attract the NANE income tax concession.

    These include:

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

    Eligible grants and support programs

    Victoria state grants
    • Alpine Business Fund
    • Alpine Resorts Support Program (Streams 1, 2 and 3)
    • Business Continuity Fund
    • Business Costs Assistance Program Round 2
    • Business Costs Assistance Program Round 2 – July Extension
    • Business Support Fund 3
    • Impacted Public Events Support Program
    • Independent Cinema Support Program
    • Licensed Hospitality Venue Fund
    • Licensed Hospitality Venue Fund 2021
    • Licensed Hospitality Venue Fund 2021 – July Extension
    • Live Performance Support Program
    • Melbourne City Recovery Fund: small business reactivation grants
    • Outdoor Eating and Entertainment Package
    • Small Business COVID Hardship Fund
    • Sole Trader Support Fund
    • Sustainable Event Business Program.
    New South Wales state grants
    • 2021 COVID-19 Business Grant
    • 2021 COVID-19 JobSaver Payment
    • 2021 COVID-19 Micro-business Grant
    • NSW Performing Arts COVID Support Package

    Additional government COVID-19 business support programs may be made eligible by declaration of the minister. If the minister makes a declaration in relation to additional programs this page will be updated accordingly.

    Example: eligible grant for COVID-19 business support payments

    The Victorian Government created the Business Support Fund. This fund provides grants to support businesses impacted by the stage 3 and 4 COVID-19 restrictions.

    The minister declared this to be an eligible grant program, as it:

    • was first publicly announced after 12 September 2020
    • responded to the economic impacts of the pandemic
    • was directed at supporting businesses whose operations were significantly disrupted as a result of the public health response.

    These payments are listed under section 59-97 of the ITAA 1997 'State and Territory grants to small business relating to the recovery from the coronavirus known as COVID-19'.

    Therefore, the Victorian Government is required to report that this grant is listed under Division 59 of the ITAA 1997 on the TPAR form.

    End of example

    Natural disasters

    Storms and floods

    2021 storms and floods: recovery grants

    Small businesses and primary producers affected by the storms and floods that occurred between 19 February 2021 and 31 March 2021 may be eligible to receive special disaster recovery grants.

    The grant must be a Category D grant under the Disaster Recovery Funding Arrangements 2018.

    These grants are NANE income from the 2020–21 financial year and onwards.

    2019 North Queensland flood: recovery grants

    Small businesses, primary producers and not-for-profit organisations affected by the North Queensland monsoonal trough flooding between 25 January 2019 and 28 February 2019 may be eligible to receive special disaster recovery grants.

    The grant must be a Category C or D grant under the Disaster Recovery Funding Arrangements 2018.

    These grants are NANE income from 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.

    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

    Last modified: 14 Sep 2021QC 66684