Encouraging compliance

We continue to look for opportunities to enhance our early intervention tools and develop broader end-to-end strategies that strengthen our relationships with key partners and encourage voluntary compliance with GST obligations.

During the year, we worked with an Australian university to develop improved analytical models that assist with ensuring our lodgment compliance activities are better targeted. This allows us to focus our attention on the early identification of taxpayers who are unlikely to lodge without our intervention and limit contact with taxpayers who intend to meet their lodgment obligations, but are slightly delayed.

The rates of both on time and overall lodgment of business activity statements have significantly improved over the past five years. On time lodgment of activity statements has improved by 4.1 percentage points for monthly and 0.3 percentage points for quarterly statements. Overall lodgment performance has also improved by 3.2 percentage points for monthly and 1.7 percentage points for quarterly statements.

We raised $1.00 billion in GST liabilities from our lodgment compliance activities this year, an increase of $26.8 million from last year.

Table 14: Percentage of BAS lodgments on time and overall


Monthly BAS lodged overall

Monthly BAS lodged on time

Quarterly BAS lodged overall

Quarterly BAS lodged on time






























Figure 15: Comparison of BAS lodgment performance

This line graph provides a comparison of activity statement lodgment from 2009–10 to 2013–14 by monthly lodged overall, monthly lodged on time, quarterly lodged overall and quarterly lodged on time.  The figures already provided in Table 14.

We recognise that it is important to resolve technical issues as quickly as possible to provide taxpayers with certainty on GST treatment. As issues arose, we worked quickly to understand the GST consequences and potential impacts with a view to proactively issuing early advice to the community.

Providing certainty on emerging issues

In 2014–15, we provided guidance on:

  • collaborative consumption
  • crowdfunding
  • crypto-currencies
  • identity crime and how people can protect themselves.

Collaborative consumption

Greater access to advanced technology has led to changing business models in the community for the sharing economy, also referred to as collaborative consumption. In response, on 20 May 2015, we released advice on the tax consequences of these activities including ride-sourcing services. Communication of our position was extensive to support and encourage compliance, particularly for drivers providing taxi travel through ride-sourcing activities.

Collaborative consumption is a new way of connecting buyers (’users’) and sellers (‘providers’) for economic activity and existing GST law (including the enterprise consideration) applies equally whether a provider and user connect at a bricks and mortar business or via a third party app.


To assist with business certainty, we issued a fact sheet to provide advice on the GST treatment of crowdfunding, providing practical situational examples, and published a private ruling. Crowdfunding involves using the internet and social media to raise funds for specific projects or particular business ventures. Typically, the promoter of the project or venture will engage an intermediary to operate an online platform that allows the promoter to connect to potential funders. Various models are used to attract funding.


During the year, we provided practical guidance and rulings on the tax treatment for transactions associated with crypto-currencies, specifically bitcoin. On 17 December 2014, we finalised the public ruling GSTR 2014/3: the GST implications of transactions involving bitcoin. We also provided a submission to the Senate Economics References Committee Inquiry into the digital currency in March 2015, with the Committee’s report published in August 2015.

Specifically for the government sector, we focused on resolving disputes with government agencies around unimproved land GST concessions. In collaboration with the States and Territories and stakeholders, we are working to find common ground on an acceptable process.

To promote tax governance, we have developed and nearly finalised a cooperative assurance framework and approach. It has undergone extensive co-design and stakeholder consultation engagement with the Corporate Tax Association. This included workshops in October 2014 and subsequent meetings. We anticipate this product will be finalised during the first quarter of 2015–16.

For our largest taxpayers, we continue to use our published risk differentiation framework and tailor our engagement and strategies based on the assessed risk of the business. Our focus is on prevention rather than correction taking a whole of client approach to assuring compliance.

As part of our ongoing scrutiny, the ANAO conducted a performance audit on Annual compliance arrangements (ACAs) with large corporates to assess the effectiveness of our product for large taxpayers. The ANAO’s report was published on 6 November 2014 and we have since implemented two of its recommendations relating to compliance assurance and record keeping. Pleasingly, the report found that ACAs are consistent with international practices of building cooperative relationships with large corporate taxpayers.

At 30 June 2015, we had 18 ACAs for GST in place with large corporates. One new ACA for GST was signed during the year, one client renewed their ACA and another extended their arrangement. These agreements allowed for assurance of around $31.6 billion in GST throughput on over $286.5 billion in total sales and purchases in 2014–15.

Willing participation by large business is further evidenced with $220.78 million in voluntary disclosures received during the year. We increased our focus on prevention rather than correction and early engagement with our clients that led to a reduction in liabilities raised and voluntary disclosures. Errors are being detected earlier by taxpayers, and voluntary disclosures are generally made earlier and for lower amounts.

CASE STUDIES: Engagement with large businesses

Using early engagement principles, we worked in partnership with a large financial institution to reach a mutually acceptable conclusion to the implementation and review of the group-wide apportionment methodology. This resulted in the taxpayer reducing their original $60 million claim by $6.6 million and provided the client and ATO with certainty going forward.

A risk workshop was conducted with a large business who had acquired another group. The workshop looked at the outcome of a client initiated consultant review of the GST systems and procedures of the newly acquired group and, in particular, the remedial action taken in response to the consultant’s recommendations.

While some incorrect accounting was identified, we decided to exercise the Commissioner’s power of general administration.

Because of this action, we had reasonable assurance that the client’s systems were now operating effectively, known revenue deficiencies had been rectified and the compliance costs of both the ATO and the client had been minimised.

We provided assistance to a large importer of frozen meals around the correct GST classification for their food products. Following our interactions with the company, we received a letter of thanks for our interactions with them.


The Assistant Vice President wrote:

….We are extremely impressed with what we have seen from the ATO and your help, as most of the other countries we deal with seem inflexible, bureaucratic and slow. Trust me that even if the decision was not favourable, I would still be writing to thank you.

End of example
    Last modified: 14 Dec 2015QC 47462