There is now legislation that requires the reporting of transactions which are made by businesses through any electronic payment systems to be reported in a “Business Transaction through Payment System” (BTTPS) report by the financial institutions.
The purpose of the information is to assist with the pre-filling of details for income tax returns to make it easier to lodge, and also to ensure that businesses comply with their tax obligations, including the lodging of reporting income and tax returns. The data is to be matched with data that has already been collected by the ATO. Read more about the new data reporting requirements.
Businesses are being watched. ATO is matching transactions recorded through payment systems to the amount of income being reported.
Utilising information available through ATO benchmark data comparisons, the ATO will increasingly be analysing every business and seeking explanation of discrepancies.
The electronic payments systems that are being referred to here include:
- Specialised payment providers
- Third party processors
- Those that are authorised to take deposits
The reporting obligations refer to the processing of BPay payments, direct debit payments, and payments via a merchant; i.e. credit cards. A payment system is defined by the: Payment Systems (Regulation) Act 1998.
The report includes the name, address, bank account number and gross monthly payments. Customer Reference Number and ABN are also provided.
When and How
The BTTPS report is to be submitted annually by 31st July each year using the business portal. This is effective for the 2017/2018 financial year. There is an option for more frequent reporting, and this starts as early as January 2018.
Ensure clients are aware of this new legislation and that the requirements become part of the necessary compliance for business reporting.
Updated: 12th December, 2017