Construction Subcontracting — Australia: Security of Payment and TPAR (Odoo 19)

There is no Australian equivalent of the UK CIS

No mandatory withholding applies to payments to a building subcontractor who provides their ABN. The only two withholding mechanisms are no-ABN withholding and PAYG voluntary agreements, which require an agreement and only apply to individuals. A module that withheld a percentage from an Australian subcontractor in good standing would be taking money that nothing authorizes it to take.

The three rules that block a payment

1. No ABN, no payment without a forty-seven percent withholding. It is the country's only mandatory withholding, and it penalizes not a fault on the subcontractor's part but an absence. “Payers must withhold 47 % (from 1 July 2017) from the total payment for a supply unless […]” when the supplier does not provide an ABN and the payment exceeds $75 excl. GST. The tax authority adds that “It is an offence not to withhold”, and that the penalty is equal to the amount that should have been withheld: paying the net amount therefore costs exactly twice the withholding. The module states the figure in the refusal message.

A Statement by a supplier removes the withholding when the case falls under an exception — private or hobby activity, no enterprise carried on in Australia, exempt income, a minor under eighteen paid no more than $350 a week, an input taxed supply. It is ticked on the subcontractor's record, and it is the document you will produce at audit.

2. Paying less than claimed without having responded in time. This is the costliest rule in Security of Payment, and the one people discover too late. A debtor that does not serve a payment schedule within its State's deadline — ten business days in New South Wales, fifteen in Queensland, Western Australia and South Australia, or the contractual deadline if shorter — becomes liable for the full claimed amount and loses the right to dispute its grounds. Paying $60,000 on a $100,000 claim without having responded means owing the remaining $40,000 with no possible defense. The module refuses the payment and names the gap.

3. TPAR fields are missing. The subcontractor's ABN, name and address are specifically required by the annual report. Discovering they are missing on August 28, when the report is due, would be too late — especially since the TPAR does not qualify for the nil-report exception, the tax authority expressly excluding it as a third-party data report.

The Australian register: the TPAR

The module gathers the fiscal year's Australian payments, one subcontractor per line, with the six data items the report requires: the ABN — and all ABNs if the business changed ABN during the year — the name, the address, the gross amount paid including GST and withholding, the total GST, and the total withheld where no ABN was quoted. It calculates the August 28 due date, refuses lodgment while any line is incomplete, and flags in the chatter the late lodgment penalty: one penalty unit per twenty-eight-day period or part thereof, capped at five.

Only payments actually made by 30 June are included: “only report payments you made on or before 30 June”. It is the payment date that counts, not the invoice date — an invoice still unpaid on that date will go into the next return.

Three common misconceptions corrected, checked against the text

• The rule for building is 50%, not 10%. The obligation arises when 50% or more of the business's activity or income relates to building and construction services, under three alternative tests including the immediately preceding financial year (s. 70(4) of the Taxation Administration Regulations 2017). The administration states in so many words, regarding the 10%: “This doesn't apply to building and construction services you provide.” The 10% is the threshold for other sectors — cleaning, courier and road freight whose income is combined, IT, and security and surveillance.

• Western Australia allows fifteen business days for the payment schedule (s. 25(1)(b)), not twenty: twenty and twenty-five days are the payment deadlines. And the April 1, 2023 phase attributed to it does not exist — its phases are August 1, 2022, February 1, 2023 and February 1, 2024; April 1, 2023 was a Queensland date, later repealed.

• Queensland has stayed at the January 1, 2022 thresholds for project trust accounts: one million dollars for the State and hospital services, ten million for any other principal. The divisions that were to lower this threshold to three million and then one million were never proclaimed, and the regulation that dated them was repealed on January 30, 2025 with no replacement date.

Two recent changes supported by the module

Victoria overhauled its regime on April 15, 2026: a mandatory cap of twenty business days for the payment due date, a performance securities regime, and provisions on time-bar clauses. Western Australia completed its rollout on February 1, 2024, with a retention trust account from twenty thousand dollars including GST.

What the module cannot do, and says so

It counts business days by excluding Saturdays and Sundays. It does not know public holidays, which vary by state, nor the additional exclusions — South Australia, Tasmania and the Australian Capital Territory exclude December 27 to 31; the Northern Territory excludes December 25 to January 7. The deadlines it calculates are therefore the earliest possible: the actual deadline is the same or later. That errs on the side of safety, but it is not the exact date, and the caveat is written into every message.

The verbatim text of Schedule 1, section 12-190 of the Taxation Administration Act 1953 — the legal basis for no-ABN withholding — could not be extracted from the Federal Register of Legislation, whose page loads its content in JavaScript. The 47% rate is therefore sourced only from the tax administration itself, and this is stated in the field help rather than hidden.

The date on which the construction sector entered the reporting regime could not be found: the authority refers to a 2012 regulation whose identifier could not be located in the federal register.

The module does not maintain any trust account: it stores the thresholds on each state's record so you know whether they apply to you, but managing the account is a matter for accounting.

Sources

ato.gov.au (TPAR, no-ABN withholding, penalty units); Taxation Administration Regulations 2017, s. 70; legislation.nsw.gov.au (Act 1999 No 46 and regulation 2020 No 504); legislation.vic.gov.au (Act 2002 No 15/2002 and Act No 43/2025); legislation.qld.gov.au (BIF Act 2017); legislation.wa.gov.au (Act 2021 No 004 and SL 2022/85); legislation.sa.gov.au, Tasmanian and ACT legislation registers; legislation.nt.gov.au. Accessed on September 14, 2026.