Key takeaways

• You should confirm whether you are considered a "reporting entity" under the PTR Act for your income/financial year.
• If you are a reporting entity, you should prepare your Payment Times Report (the PTR Act and associated Payment Times Reporting Rules 2020 (Cth) ("PTR Rules") set out the matters to be included in each report).
• A director of the reporting entity will need to be authorised to be its "responsible member", who is the person responsible for signing Payment Times Reports.
• Your Payment Times Reports must be submitted to the Regulator within three months after each six-month reporting period.
• Your Payment Times Reports will be publicly accessible on the Register.

In depth

Who is a "Reporting Entity"?

An entity will be a "reporting entity" if:

• it is an Australian or foreign company that carries on an enterprise in Australia; and (i) it or its group (if it is a parent company), has a total income for the most recent year of more than AUD 100 million; or (ii) it is a subsidiary within a group that has a total income of more than AUD 100 million, and its total income for the most recent year was at least AUD 10 million; or
• it voluntarily elects to be a reporting entity by giving the Regulator notice in writing.

The PTR Act also covers certain Government-owned entities.

When are Payment Times Reports due?

Payment Times Reports are required for every six-month period of the entity's reporting period, commencing on the first six months of the year in which the entity becomes a reporting entity.  For Australian companies, the reporting period will be the company's income year.  For foreign companies that do not pay income tax in Australia, the reporting period will be the company's financial year. 

Payment Times Reports must be given to the Regulator within three months after the six-month reporting period.  However, extensions of time to provide the Payment Times Report to the Regulator may be requested (if the request is made within the three months after the six-month reporting period), in cases where there is an evidentiary need for further time and where the Regulator is satisfied that the circumstances are exceptional or outside the entity's control.

What does the Payment Times Report need to include?

The PTR Act and associated PTR Rules prescribe the contents of the Payment Times Report.  Among other things, the Payment Times Report must contain:

• a description of the reporting entity's main business activities in accordance with the Business Industry Codes published by the Australian Taxation Office;
• a statement on the standard payment periods for the entity;
• details and an explanation of any changes to the standard payment periods;
• a statement of the proportion of invoices paid within set timeframes;
• details of the principal governing body of the entity and its responsible member for the purposes of the PTR Act; and
• confirmation of whether any "notifiable events" (as defined in the PTR Act) have occurred.

Civil penalties apply for failing to provide a Payment Times Report to the Regulator and if the Payment Times Report is materially false or misleading.

Reporting entities are required to keep any information used in the preparation of a Payment Times Report for at least seven years after the end of the six-month period to which the Payment Times Report relates.

Who approves the Payment Times Report?

The Payment Times Report must be signed by the reporting entity's responsible member.  The responsible member is an individual member of the entity's principal governing body (which typically means a member of its board of directors) authorised by the board to sign Payment Times Reports.

Once signed, the Payment Times Report must be provided to the board.

What is the process for submitting a Payment Times Report to the Regulator?

In order for an entity to submit a Payment Times Report to the Regulator, a myGovID will need to be established by an individual who has sufficient "identity" strength (i.e., is an Australian resident), and who is also an eligible individual associate for the entity's Australian Business Number (i.e., an entity's Australian resident director or public officer), who is authorised to act on behalf of the entity online pursuant to a RAM - an Australian Tax Office's Relation Authorisation Manager. This individual can then login to the reporting portal and submit Payment Times Reports on behalf of the entity or authorise another individual pursuant to the RAM to submit the Payment Times Report but that individual would also need their own myGovID.

For further information and to discuss what this development might mean for you, please get in touch with your usual Baker McKenzie contact.