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  • Top 100 GST assurance program

    This program seeks greater assurance that top 100 taxpayers are reporting the right amount of goods and services tax (GST). This supports and expands on existing compliance approaches, including justified trust reviews for income tax, further enhancing confidence in these taxpayers.

    Under the program, GST and income tax teams are working collaboratively to deliver justified trust assurance reviews across both taxes. The extent to which the assurance reviews will be integrated will vary.

    This will depend on the overall assurance rating in the most recent income tax assurance review, and whether our current engagement approach is seeking to refresh, maintain or obtain justified trust with the taxpayer.

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    How we tailor our approach

    We gain assurance or identify areas of GST risk by engaging with the taxpayer through a 12-month GST assurance review.

    We will notify the taxpayer before we commence a review and provide time for them to consider making a voluntary disclosure of any tax shortfalls.

    During a review we apply our justified trust methodology and tailor our compliance activities to the circumstances of the taxpayer, including:

    • the overall GST performance
    • the type and size of business activities
    • the tax control framework for GST purposes
    • our understanding from prior engagements including income tax assurance reviews.

    In a GST assurance review we look for assurance that:

    • GST controls within your tax control framework exist, are designed effectively and are working in practice. This includes the design of business systems to create, capture and report transactions correctly for GST purposes
    • none of the GST risks we have flagged to the market are present
    • the GST outcomes of atypical, new or large transactions are appropriate
    • we can understand and explain the various streams of economic activity and how they are treated for GST which may include applying the GST analytical tool (GAT).

    We are currently developing and testing the GAT. It is not intended for use by taxpayers with predominantly input tax supplies.

    A GST assurance review will generally focus on the last complete financial year.

    When reviewing your tax control framework for GST purposes, we consider three GST controls to be the most important. The design of these controls directly influences the likelihood that the correct amount of GST is remitted or refunded.

    These three fundamental controls are:

    • your periodic tax controls testing program
    • data controls
    • your documented GST control framework.

    Data and transaction testing is also undertaken, focusing on three consecutive BAS periods, to determine whether GST outcomes are appropriate.

    How to prepare

    We have prepared detailed guidance (GST Governance, Data Testing and Transaction Testing Guide) on how the justified trust methodology is applied to help conduct a self-review of your tax control framework for GST purposes. This guidance also explains how to undertake data and transaction testing to ensure your business systems are creating, capturing and correctly reporting GST.

    You should review your GST systems and records to check you have not made any mistakes before the GST assurance review and let us know if you wish to make any voluntary disclosures.

    For a copy of the GAT Guide and method statement we use to complete our GAT calculations, email GATSupport@ato.gov.au or Top100@ato.gov.au

    What to expect following a review

    Following a top 100 GST assurance review we will share our findings with you, including:

    • discussing the areas where we have assurance you reported the right amount of GST
    • any identified GST risks.

    We may recommend specific actions to gain greater assurance in particular areas. We will follow up on these recommendations as part of the annual compliance arrangement (ACA) and pre-lodgement compliance review (PCR) processes.

    If we identify concerns or areas of GST risk, we will work with you to address these issues and gain greater assurance. There may be circumstances where we will then undertake further compliance activity, like an audit.

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    More information

    To learn more about the top 100 GST assurance program, email us at Top100@ato.gov.au

    We welcome feedback as we continue to integrate our approaches for justified trust across income tax and GST.

    Last modified: 30 Oct 2020QC 60473