CTA 2025 tax team benchmarking survey
The Corporate Tax Association (CTA) shared findings from its eighth benchmarking survey, which provides insights into the costs and activities of corporate tax teams.
Member comments
Members asked about the in-house tax teams' relationship with the Australian Taxation Office (ATO) from both an income tax and GST perspective. The CTA said the income tax teams' relationships with the ATO were stronger, having developed over a longer time period, although GST relationships have improved in the past few years.
Company boards are spending less time discussing tax-related matters. Risks surrounding tax-related issues such as justified trust have matured and are now managed at a lower level, with topics such as wage theft, fraud and artificial intelligence (AI) taking up more time for boards.
GST performance and debt landscape
The ATO provided members with an overview of the GST payment and debt performance landscape, including key drivers influencing debt and the ATO's approach to debt recovery.
Both collectable and insolvent GST debt categories have increased over time. Much of this is aged debt relating to the ATO's changed debt recovery approach during COVID-19 and from Operation Protego.
Under the payment strategy, the ATO seeks to support those businesses that can recover to get back on track but will take firmer action where taxpayers do not engage. The ATO will move to legal action, including wind-up, where a taxpayer continues not to engage or the business cannot recover.
GST debts are prioritised for recovery action, along with pay as you go withholding and super guarantee charge debts, so taxpayers can expect the ATO will move faster to recover these debts.
ATO debts cannot be 'forgiven', but can be placed on hold, and reactivated if circumstances change.
The ATO is committed to working with tax practitioners to better support them to help their clients who have ATO debts.
Member comments
New small businesses may not have to submit a business activity statement (BAS) for 18 months after starting, which can generate a large tax bill. While there's no incentive to pay tax early, closing the gap between revenue generation and tax payments helps businesses to manage cashflow.
Members said that banks communicate with customers more quickly than the ATO when they accumulate debts. Other tax agencies such as South Africa also offer expedited compromise programs through tax agents. The ATO said it is unable to compromise on settling overall business tax debts but can allow businesses to pay off their debts over a longer time frame.
Discussions covered topics such as settlement outcomes, payment plans and remission of general interest charges.
GST debt – risks, behaviours, system pressures
Members spoke about making it easier for businesses to pay tax, allowing them to pay their BAS by direct debit or to set a date when payments are due and have them debited on that date. This would require changes to the ATO payment platform and investing in a system (direct debiting) that's expected to reach end of life in the 2030s.
There was discussion about small businesses' tax obligations and cashflow impacts, likely to be exacerbated by the abolition of credit card surcharging on 1 October. Members talked about New Zealand banks working with Inland Revenue to build business banking details into their payment systems, a practice the ATO could explore.
The introduction of Payday Super is likely to impact cash flow. Members said that increasing numbers of small businesses unable to meet their tax obligations are using AI to source tax information rather than going to the ATO website.
There was discussion on a range of indicators that might indicate to the ATO that a business is struggling and what might encourage them to pay on time.
Discussions turned to third-party entities such as Amazon and Etsy collecting GST when payments are made. Members queried whether the taxable payments annual report system could be extended to other industries.
Education and training for small businesses are potential ongoing issues. The ATO said it has to determine the allocation of scarce resources for check-in calls versus following up on debts, noting that all businesses experience different circumstances.
The ATO has limitations on what it can do. Structural changes may not be able to occur without making changes to the Taxation Administration Act 1953
DPNs, debt recovery, fairness and safeguards
Members spoke about the ATO's increasing use of director penalty notices (DPNs), which make company directors personally liable for unpaid tax debts, and how to build in safeguards to protect vulnerable taxpayers.
In 2024–25, the ATO issued 84,529 DPNs, up more than 300% on the year before. The Tax Ombudsman has announced it is going to review the ATO's use of DPNs.
Company directors will have a director penalty unless they have a valid defence such as if they are ill or for other reasons. Financial abuse or coercion is a relevant consideration, however there's no specific defence available for these circumstances.
The University of NSW Tax and Business Advisory Clinic has seen an increasing number of DPN recipients, usually women, who are victims of partner financial abuse.
There are few mechanisms to identify potentially vulnerable recipients before DPNs issue, or to deal with them after they have been received. It is possible for people to call the ATO and speak to a specialised team.
Providing more time to respond to a DPN would help vulnerable company directors, as many of them leave the primary business address and don't receive a DPN in time to respond. The ATO said its debt recovery processes include contact with companies before issuing a DPN.
The ATO is committed to improving the DPN process where possible and further embedding the ATO's Vulnerability Framework, noting the impact on taxpayers.
Community and industry insights roundtable
Members discussed a range of issues at this agenda item including:
- Delays to processing of grouping/tax consolidation forms through ATO systems, and training for ATO teams on their interactions with taxpayers. Slow processing of forms and proof of identity documents for overseas entities are still concerning taxpayers. The ATO will address processing-related issues at a future meeting.
- Taxpayers are experiencing varying degrees of acceptance in relation to evidence requested during justified trust reviews. A better understanding of what is required would be useful.
- AI is being rolled out across digital service providers, with 2 of the 3 big accounting vendors now offering access to AI.
- eInvoicing mandates continue to roll out across other jurisdictions, with discussions on what broader adoption of eInvoicing might mean from a tax perspective.
- A lack of synergy between Australian Securities and Investments Commission and Australian Business Register (ABR) systems means that data and information entered into one does not duplicate into the other, leading to further unnecessary work. There's also no 'toggle' function within the ABR, so you can't move between entities after logging in once.
- Members requested an update from the ATO's GST Technical Leadership and Advice area on upcoming public advice and guidance priorities.
Legislation and ATO updates
Members were provided with an opportunity to ask questions on updates which included:
- legislation and consultation
- news and program updates
- GST discussions at other ATO stewardship groups
- GST public advice and guidance
- GST litigation.
Attendees
|
Organisation |
Attendee |
|---|---|
|
ATO |
Hoa Wood (Co-chair), International, Support and Programs |
|
ATO |
Hayley Busuttil, International, Support and Programs |
|
ATO |
Jennifer Moltisanti, International, Support and Programs |
|
ATO |
Karen Blok, Enterprise Solutions and Technology |
|
ATO |
Melanie Casey, International, Support and Programs |
|
ATO |
Tara Pamula, Individuals and Intermediaries |
|
Australian Banking Association |
Chris Plakias |
|
Australian Bookkeepers Association |
Kerrie Jarius |
|
Chartered Accountants Australia and New Zealand |
Kevin O'Rourke |
|
Corporate Tax Association |
Stephanie Caredes |
|
CPA Australia |
Jacqui Hardwick |
|
Digital Service Providers Australia New Zealand |
Matthew Prouse |
|
Independent Member |
Jennee Chan |
|
Law Council of Australia |
Rhys Guild |
|
Property Council of Australia |
Elke Bremner |
|
Small Business representative |
Amanda Gascoigne (Co-chair) |
|
The Tax Institute |
Bastian Gasser |
|
Wesfarmers Limited |
Caryn Bovell |
Guest attendees
|
Organisation |
Attendee |
|---|---|
|
ATO |
Anna Longley, Frontline Risk and Strategy |
|
ATO |
Anthony Marvello, Small Business |
|
ATO |
Jack Wang, Frontline Risk and Strategy |
|
ATO |
Lara Cavanough, Public Groups |
|
ATO |
Sonia Corsini, Private Wealth |
|
Department of Treasury and Finance, Victoria |
Matthew Yeung |
|
Treasury and Economic Development Directorate, ACT |
Kai WakermanPowell |
|
Treasury |
Liz Jaspers |
Apologies list
|
Organisation |
Member |
|---|---|
|
ATO |
Narda Phillips, Enterprise Solutions and Technology |
|
ATO |
Rowan Fox, Small Business |
|
ATO |
Sarah Vawser, Individuals and Intermediaries |
|
University of New South Wales |
Michael Walpole |
|
RSM Australia |
Sam Mohammad |