Top 100 GST assurance program

About the Top 100 GST assurance program

The top 100 population is a significant contributor to total GST collections. In 2024–25 the top 100 population contributed about $10.4 billion in GST collections, about 12.3% of total GST collections.

As at 30 June 2026, one or more GST reporters in nearly 98% of our top 100 economic groups have had a GST assurance review under the Top 100 GST assurance program. The remainder, except for some recent entrants, have a GST assurance review underway or commencing in 2026–27.

GST reporters who attain overall high or medium assurance will have a tailored engagement where they will be reviewed on a periodic basis at least once every 4 years. From the 2024–25 income year onwards, in lieu of a full refresh review, for eligible high assurance reporters, we will limit our engagement to an assurance check-in every fourth year. We will predominantly rely on independent tax control testing results (that is, Board-level control 4 (BLC 4) testing) and the alignment between accounting and tax to evidence and maintain assurance, supported by annual profiling. Our Future GST engagement after initial GST assurance review (future engagement approach) outlines our approach.

During the monitoring and maintenance period (M&M period) between the initial review and the refresh review or assurance check-in, GST reporters are expected to proactively engage with us and make relevant disclosures. We'll actively monitor the GST reporter to safeguard against non-disclosure or non-compliance during the M&M period and may also conduct targeted assurance activities if required. We don't provide tax assurance reports (TARs) during the M&M period.

Our refresh review will be tailored based on a comprehensive understanding of the taxpayer’s business across the 4 focus areas. The scope of this review (including any data or transaction testing (or both) will be informed by our profiling and have regard to the Supplementary annual GST return (SAGR) and disclosures made by the taxpayer.

Health of the system

Table 1: GST population latest rating and 2024 tax figures (nearest hundred million $)
Latest assurance rating	Latest rating (%)	Net GST (%)	GST throughput (%)
High assurance	43%	$7.8bn (65%)	$64.3bn (54%)
Medium assurance	55%	$4.6bn (35%)	$53.1bn (46%)
Low assurance	2%	-$0.4bn (~0%)	$0.56bn (~0%)
Not rated	0%	$0	$0

Table 1 outlines the GST reported and paid, as well as the GST throughput, in the 2024 year by the current population, based on their rating as at their last assurance review. The assurance ratings of individual taxpayers may not have been attained for the 2024 year. That is, the 2024 year may not yet have been assured through reviews but instead uses the latest assurance rating (which could relate to a different year) as a proxy for the population coverage of key tax figures.

Of the $11.9 billion net GST reported and paid in 2024 by top 100 taxpayers subject to an assurance review, almost 100% was attributable to taxpayers that achieved a high or medium assurance rating in their latest review.

Obtaining high assurance for GST

In the Top 100 program, we apply a principled approach to attaining overall high assurance (justified trust). This is based on 2 elements:

A quantitative threshold of more than 90% tax assured and economic activity correctly reported
An objective assessment of 6 qualifying factors.

The quantitative threshold of element 1 must be met before the qualifying factors in element 2 can be applied.

The 6 qualifying factors are outlined as follows.

1. Governance

Governance has been rated at least a Stage 2 in the GST TAR.

2. Tax risks flagged to market

Any tax risks flagged to market (practical compliance guidelines, taxpayer alerts, public rulings) have been rated at least a medium level of assurance in the TAR and are not of immediate concern or identified as necessitating further action based on the information provided.

3. New, significant transactions and specific tax risks

Any material significant, new, or specific transactions reviewed have received at least a medium level of assurance in the TAR. They are not identified as necessitating further action based on the information provided.

4. Alignment between accounting and tax results

The GST analytical tool (GAT) calculation and any underlying assumptions or proxies have been verified with objective evidence provided by the taxpayer. The GAT calculation has not highlighted any areas of concern for us and is rated Stage 2.

Completion of the GAT is mandatory for all top 100 taxpayers except for taxpayers who are predominately input taxed.

For top 100 taxpayers who don't apply the GAT (that is, predominately input taxed taxpayers) we expect an alternative methodology be applied to identify the key variances between accounting and tax. The outcomes of this analysis must be rated at least a medium level of assurance.

5. Correct reporting

The results from data testing and transaction testing (by the ATO or a third party) have been verified with objective evidence provided by the taxpayer. The data and transaction testing have not highlighted any areas of concern for us and is rated as high assurance.

6. Cooperative and collaborative behaviour

It has been a cooperative and collaborative process, and when working with a taxpayer we haven't observed any non-cooperative behaviour.

An overall provisional high assurance rating may be possible in limited circumstances. Such circumstances may include where the taxpayer has provided an undertaking and is actively working on addressing a specific design gap in their tax governance framework, or there is ongoing compliance activity.

Where there is ongoing compliance activity, provided the quantitative threshold is met (inclusive of the unassured issue), the availability of a provisional rating will depend on the nature and stage of the compliance activity.

Overall levels of assurance

The overall level of assurance is based on an objective view (having regard to objective evidence) of whether the taxpayer is considered to have reported the right amount of GST.

Ratings

We apply consistent rating categories when considering our overall level of assurance.

Table 2: Rating categories
Colour indicator	Rating	Category description
	High	We obtained assurance that the taxpayer reported the right amount of Australian GST for the period reviewed.
	Medium	We obtained assurance for some but not all areas reviewed. For those areas not yet assured, further evidence or analysis will be required before we obtain assurance that the taxpayer reported the right amount of Australian GST.
	Low	We have specific concerns around the taxpayer’s compliance with the Australian GST law and the amount of Australian GST paid and GST refunds claimed for the period reviewed.

The GST assurance reviews completed to the end of June 2026 resulted in the following ratings.

Graph 9 – Overall assurance ratings for the most recent GST reviews completed as at 30 June 2026

Percentage of assurance ratings: high 43%, medium 55%, low 2% and not rated 0%.

Note: GST findings in this report reflect outcomes based on the last completed review for the GST reporter.

'Not rated' is applied to taxpayers where a recent full justified trust review across all 4 focus areas has not been undertaken.

Graph 10 – Overall assurance ratings for the most recent GST reviews completed by industry as at 30 June 2026

GST assurance ratings by industry. FS is mostly high with MCA and WRS similar for high and medium, MEW mostly medium. You can access the figures in table format using the link below.

You can also view overall assurance ratings for the most recent GST reviews completed by industry data in table format.

Note:

These groupings align with the industry segments used by us as part of our annual corporate tax transparency reporting except where we have amalgamated the Banking, finance and investment (BFI), Insurance (ISR) and Superannuation (SUP) segments into a Financial services (FS) segment. The groupings are:
- Banking, finance and investment, superannuation funds and insurance (FS)
- Manufacturing, construction and agriculture (MCA)
- Mining, energy and water (MEW)
- Wholesale, retail and services (WRS).
Graph 9 and Graph 10 depict all current top 100 GST reporters that have had a completed GST assurance review (this does not include GST reporters that have exited the top 100 population).
To ensure we have sufficient coverage of each taxpayer economic group, we consider a range of factors including
- coverage of at least 75% of GST throughput
- additional criteria based on our knowledge of the taxpayer's business operations and industry (as outlined in section 4 of the GST Governance Data Testing and Transaction Testing Guide including unique or complex transactions, input taxed supplies and GST-free supplies).

For this reason, multiple GST reporters within an economic group may be reviewed. Economic groups in the MEW industry segment have more GST reporters subject to a review, as these taxpayers (GST economic groups) typically comprise of multiple GST reporters that make GST-free supplies and have lower GST throughput.

Observations

Overall high assurance was attained by 43% of GST reporters reviewed (an increase from 38% in 2025). This means we have assurance they have reported the right amount of GST for the period reviewed. These GST reporters typically have:

at least overall Stage 2 or provisional Stage 2 rating for governance
high assurance for correct reporting
no identified concerns or issues with GST risks flagged to market or treatment of significant transactions.

We also have a good understanding of, and can explain, the various streams of economic activity and how they are treated for GST.

A large proportion of GST reporters reviewed attained an overall medium level of assurance (55%). This meant we obtained assurance in most areas reviewed but not all areas.

Reasons that have prevented an overall high assurance rating include the following:

Not attaining overall Stage 2 rating for governance, due to insufficient objective evidence to demonstrate that a tax control framework exists and has been designed effectively for GST. Design gaps in their tax control and governance frameworks for GST were found in 39% of GST reporters reviewed.
Not attaining overall Stage 2 rating when applying the GAT. 13% of GST reporters that applied the GAT didn’t attain at least overall Stage 2.
Lower levels of assurance for other focus areas, such as
- in a small number of cases the presence of potential tax risks flagged to market
- issues with correct reporting
- insufficient evidence to assure significant transactions.

18% of the GST reporters reviewed could otherwise reach overall high assurance but for these 3 factors. These matters typically do not have a material impact on GST reported and paid. However, they may necessitate further taxpayer or compliance action before we are comfortable we have obtained a sufficient level of assurance.

Less than 2% of GST reporters reviewed attained an overall low assurance rating. This meant we had specific concerns around the GST reporter’s compliance with Australian GST law and the amount of Australian GST paid and GST refunds claimed for the period reviewed. These GST reporters typically had Stage 1 governance, attained low assurance over multiple focus areas (including tax risks flagged to market, specific GST issues or correct reporting), and the variances between accounting figures and the amounts reported on the business activity statement (BAS) were not understood or explained. We will comprehensively and intensively review these GST reporters through an annual justified trust assurance review to improve their assurance rating.

The refresh reviews completed to date resulted in most taxpayers maintaining or improving their justified trust ratings.

Tax governance framework

Governance, systems and controls support tax compliance. Effective systems and controls to ensure accurate GST reporting and issuance of invoices is a focus area under the PMB three-tier model.

Tax governance is a key focus area under the justified trust methodology. This is important as errors due to poor governance is the largest driver of amendments in the large market.

Our GST Governance, Data Testing and Transaction Testing Guide sets out the evidence required to demonstrate design and operational effectiveness of a tax control framework.

We consider the 8 controls outlined previously for income tax. Of these, 3 are fundamental to GST because their design directly influences the way GST is reported. These 3 fundamental controls are:

Board-level control 4: Periodic internal control testing
Managerial-level control 4: Controls in place for data
Managerial-level control 6: Documented control frameworks.

The remaining 5 controls are common controls because the design is equally critical for both income tax and GST. There are common features in the way these controls are evidenced for both taxes.

Ratings

We apply the same standard ratings system as outlined previously for income tax when considering the existence, design, and operation of a tax control framework for GST purposes.

The GST assurance reviews completed to 30 June 2026 resulted in the following ratings.

Graph 11 – Overall GST governance ratings for the most recent GST reviews completed as at 30 June 2026

Percentage of governance ratings: stage 3 16%, stage 2 45%, stage 1 39%.

Graph 12 – Overall GST governance ratings for the last GST reviews completed by industry as at 30 June 2026

Governance ratings by industry. FS is mostly stage 2, MCA similar for all stages, FS is mostly medium, and MEW and WRS mostly split between stage 1 and stage 2. You can access the figures in table format using the link below.

You can view overall GST governance ratings for the last GST reviews completed by industry data in table format.

Observations

As at 30 June 2026, over half of the top 100 GST reporters attained a Stage 2 or Stage 3 rating (61%) for their GST governance framework, with the remaining GST reporters assessed at Stage 1 (39%).

Poor governance, including gaps in procedures and controls, often leads to incorrect GST and is the largest driver of amendments in the large market.

We continue to observe that GST errors occur because there are no natural systems to check outcomes, with taxpayers continuing to rely on bottom-up systems. We therefore strongly encourage taxpayers to develop procedures to explain significant differences between business activity statement (BAS) reporting and financial statements.

We've also observed that GST errors involving the GST special rules, including reverse charge provisions, financial acquisitions threshold (FAT) and input tax credit (ITC) estimators, are often linked to weaknesses in control design such as inadequate system controls and poorly documented accounts payable and BAS procedures.

Where errors are identified through voluntary disclosures or assurance reviews, we seek to understand their cause and assess whether processes and procedures are designed effectively to prevent recurrence. Through improved governance, we often see fewer errors.

Stage 3

To attain a Stage 3 rating for GST, we look for evidence that the documented GST control framework is both designed effectively and operating effectively in practice. Evidence of operational effectiveness is consistent with that required for income tax, and we expect to see evidence of common controls tested from a GST perspective.

To date, 16% of top 100 GST reporters have attained a Stage 3 rating after providing us with their testing results demonstrating that their GST control frameworks are operating effectively. A number of other GST reporters have also commenced testing their GST governance frameworks. On the basis that testing is undertaken consistent with our GST Governance, Data Testing and Transaction Testing Guide and evidence is provided, we expect the proportion of GST reporters attaining a Stage 3 rating to increase over coming years.

Stage 2

A Stage 2 rating is required to achieve overall high assurance or justified trust for GST. To attain a Stage 2 rating, GST reporters must provide objective evidence to demonstrate that a GST control framework exists and has been designed effectively.

As at 30 June 2026, 45% of GST reporters had a Stage 2 rating for their GST governance framework.

We've observed that some top 100 taxpayers are highly committed to investing in GST governance with the result that they can obtain a Stage 2 rating at the conclusion of their initial GST assurance review. We expect that taxpayers with a well-designed and effective GST governance framework will result in less incorrect reporting of GST in future periods.

We continue to work with top 100 taxpayers to support their efforts to obtain a Stage 3 rating as part of our future engagement approach.

Stage 1

A Stage 1 rating recognises that a tax control framework for GST exists but reflects that further work is needed to demonstrate that it is designed effectively.

As at 30 June 2026, 39% of GST reporters attained a Stage 1 rating for their GST governance framework.

The areas most identified as lacking sufficient documentation include:

procedures to address core elements for controls in place for data
end-to-end finalised BAS preparation procedures
sufficiently detailed and comprehensive BAS reconciliation to financial statement procedures.

The factors preventing GST reporters from achieving a Stage 2 rating are consistent with those observed for income tax, with the added issue that GST common controls are often excluded from testing plans.

We continue to work with taxpayers to improve their tax governance framework for GST as part of our future engagement approach.

GST risks flagged to market, significant or new transactions, and specific tax risks

We seek to understand that the GST outcomes of atypical, new or large transactions are appropriate. We also review GST risks or concerns we communicated to the market and determine whether these risks may be present.

Ratings

We apply a consistent rating system when reviewing and assessing the GST reporting and GST treatment of a taxpayer’s business activities, particularly significant and new transactions, and GST risks or concerns communicated to the market.

Table 3: Rating categories
Colour indicator	Rating	System description
	High	With respect to this issue, we obtained a high level of assurance that the right Australian GST outcomes were reported in the GST reporter's business activity statements.
	Medium	More evidence and analysis is required to establish a reasonable basis to obtain a high level of assurance.
	Low	More evidence and analysis is required to determine whether a tax risk is present.
	Red flag	We have concerns there is non-compliance with the GST law.
–	Not rated	We have not evaluated this item and not expressed a rating.

Observations

Our assurance activities under this pillar consider a broad range of behaviours and focus areas identified within the public and multinational business three-tier model (PMB 3TM) as driving tax performance, specifically correct reporting.

Our assurance reviews assess correct reporting, including using data and transaction testing. We have published guidance to assist taxpayers with testing, including the GST Governance, Data Testing and Transaction Testing Guide and the Guide to independent data testing by third-party advisors (TPDT Guide).

We expect that taxpayers will undertake robust and regular assurance and verification procedures that align with their business and are tailored to their own operating environment. We continue to observe positive actions taken by top 100 taxpayers to strengthen their GST compliance systems. We also see them adopt processes to support correct reporting. For example, embedding data and transaction testing or aspects of the testing into their own systems, including specific GST verification checks prior to lodgment of the BAS. Taxpayers are implementing and automating data and trend tests to produce the correct results before the BAS is lodged.

Data testing

Typically, we will conduct data and transactions testing for correct reporting as part of an initial GST assurance review. This includes further analysing transactions where we identify errors, anomalies, outliers or other exceptions from the data testing. It will also include separately analysing transactions relevant to any GST risks flagged to market and new or large transactions to confirm that these have been correctly treated and reported for GST purposes. However, we tailor our approach once a taxpayer has reached medium or high assurance for GST. We may not perform data or transaction testing for some taxpayers in subsequent reviews, or it may be more limited.

In determining the intensity applied to both data testing and transaction testing, we will take a holistic and tailored approach and consider:

GST risks inherent to specific industries or taxpayers, including tax risks flagged to market
the extent of data and transaction testing undertaken in the initial review
the assurance ratings provided in the initial review
changes in the taxpayer circumstances or GST approaches that may impact our prior level of assurance, particularly where those changes do not align with our existing understanding of the taxpayer (for example, changes to the taxpayer's business, governance, or reporting systems since the initial review)
whether the taxpayer has been applying the GST analytical tool (GAT) to reconcile the BAS to financial statements since the initial review
the GAT prepared by the taxpayer in the refresh review to target data and verification testing
the operational effectiveness testing results from a taxpayer's periodic tax controls testing program.

Third-party data testing

As at 30 June 2026, 44% of completed reviews that included data testing involved data testing by a third-party advisor, which has remained steady since 2025.

The TPDT Guide provides practical guidance on our expectations and the conditions that must be met for a taxpayer's advisor to undertake independent data testing that can be relied upon in a GST assurance review. One key condition that must be met is the independence of the advisor. Where the conditions cannot be met, we will conduct the data testing.

The scenarios in the TPDT Guide provide practical guidance on what independence means in respect to advisors undertaking data testing. These scenarios illustrate some factors that may impact on the independence of the third-party advisor, noting it isn't feasible to cover every possible scenario.

We're continuing to work closely with taxpayers and their advisors where third-party data testing is conducted to ensure that the outcomes are sufficiently robust. This provides the intended degree of confidence on correct reporting and ensures that significant delays don't arise.

Correct reporting

Table 4: Correct reporting assurance ratings by review outcomes
Assurance ratings as at 30 June 2026	Percentage of Top 100 review outcomes
High	65%
Medium	31%
Low and red flag	3% (3% and 0%)
Not rated	1%

We've seen continued improvements in correct reporting. As at 30 June 2026, 96% of taxpayers attained a medium or high level of assurance for correct reporting. The proportion of taxpayers attaining high assurance for correct reporting increased from 58% in 2025 to 65% in 2026. However, we continue to see examples of inadvertent errors or misreporting.

Some examples of reporting errors we've observed in assurance reviews completed up to 30 June 2026 are as follows:

Incorrect GST credit claims on transaction costs for significant transactions. Where businesses engage in securities transactions such as IPOs, mergers, demergers, company acquisitions or other similar activities, these activities may give rise to input taxed financial supplies. As such, there's a need for these entities to consider restricting input tax recovery on attributable costs where the financial acquisitions threshold is exceeded and, if so, to also consider whether any reduced input tax credits are available. This includes consideration of preparatory or 'set up' costs for the disposal of businesses or subsidiaries.
Errors with recipient created tax invoices (RCTIs) including RCTIs being issued to unregistered suppliers at the time the arrangement was entered into, issued without appropriate RCTI wording or deficient wording, as well as being issued with incorrect details (for example, ABN or taxpayer name). We have also identified a number of expired RCTI agreements.
Incorrect GST credit claims on non-deductible employee entertainment expenses.
Failure to apply the 'reverse charge' GST provisions on services acquired from overseas that relate to making of input taxed financial supplies (where the financial acquisitions threshold is exceeded), including supplies from parent entities outside Australia.
Incorrect processing of manual transactions resulting in either underreported GST or overclaimed ITCs.
Incorrect GST credit claims on employee entertainment expenses.

GST corrections in 2025–26, including amounts that were voluntary disclosures, were typically not material in dollar terms relative to total GST remitted and paid.

However, in some cases the error amounts were large and, in a small number of cases, failure to take reasonable care penalties applied due to the taxpayer's circumstances.

We continue to see a large number of voluntary disclosures made by taxpayers during an assurance review. Taxpayers should be continually reviewing their GST compliance for inadvertent errors or misreporting as part of their business-as-usual tax governance processes.

Importantly, many GST reporters have implemented, or have documented plans to implement, improvements to their controls, processes, and procedures to prevent the reoccurrence of these errors. Some taxpayers have continued to review their activity statements for periods outside the review periods to ensure compliance and to correct any GST errors identified. Others have expanded their self-reviews to include other GST reporters in the economic group.

Taxpayers should continue considering Division 93 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) when submitting voluntary disclosures for periods close to the expiry of the 4-year entitlement period. Submitting an amendment request is not sufficient for input tax credits to be taken into account in an assessment. The amendment request actually needs to be processed by us within the 4-year limit.

Three-tier model behaviours, events and focus areas

The three-tier model for public and multinational businesses (PMB 3TM) is a comprehensive model that leverages the OECD's 4 pillars of tax compliance (registration, lodgment, correct reporting, and payment), as well as the 'fifth pillar' of third-party reporting and payments that we focus on, to consider all areas of tax performance and the tax and super laws.

The model is made up of 3 tiers that drill down to the behaviours we observe for public and multinational business, including:

Tier 1: These are the major drivers of tax performance and non-performance for these taxpayers. These behaviours are what drives improvement or deterioration in the tax gap.
Tier 2: These are the visible events for Tier 1 behaviours. They can impact on us achieving improvements in tax performance or preventing deterioration in the system.
Tier 3: These are the specific focus areas for each Tier 2 event. This is where we intervene to address the behaviour.

For public and multinational businesses, we have identified 5 behaviours driving tax performance:

International related party dealings.
Cross-border investments structures.
Domestic tax positions and structures.
Administrative compliance obligations.
Actions that support tax compliance.

Our assurance activities target a broad range of focus areas identified within the public and multinational business three-tier model as these drive tax performance, specifically correct reporting.

The following tables show the key behaviours, events and areas of focus in our assurance reviews underpinning correct reporting. Note this is not an exhaustive list. Also, owing to wide ranging differences in business activities, models and structures, not all focus areas will apply for every taxpayer.

Table 5: Domestic tax positions and structures (Tier 1)
Events (Tier 2)	Focus areas (Tier 3)
Treatment and reporting for goods and services tax (GST) purposes	Treatment of significant or unusual transactions involving financial supplies (e.g. financial acquisition threshold) Treatment applied by financial services, investment and insurance industries (e.g. GST apportionment, reduced input tax credits, reverse charge) GST classification of food and health products Reporting of GST on low value imported goods and inbound intangibles supplies by offshore entities Treatment applied to real property transactions and accommodation

Table 6: Actions that support tax compliance (Tier 1)
Events (Tier 2)	Focus areas (Tier 3)
GST governance, systems and controls	Effective systems and controls ensure accurate GST reporting and issuance of invoices

Specific areas of concern

The following sections outline specific areas of concern and items that attract our attention. We do not see these in all cases and this is not an exhaustive list.

These matters have been grouped according to the 3TM behaviour, event or focus area(s) that they relate to.

3TM Tier 1: Domestic tax positions and structures

3TM Tier 2: Treatment and reporting for GST purposes; Tier 3: GST classification of food and health products

Table 7: GST product classification assurance ratings by review outcomes
Assurance ratings as at 30 June 2026	Percentage of Top 100 review outcomes
High	56%
Medium	17%
Low and red flag	22% (22% and 0%)
Not rated	6%

The review of entities’ product master lists has identified the incorrect GST classification of food and health products. As at 30 June 2026, 22% (29% in 2025) of reviews that considered GST product classification of food and health issues identified areas of low assurance. These issues are relatively immaterial in the context of total GST reported, and paid, and therefore in most cases did not negatively impact the overall assurance rating.

GST classification issues continue to be attributable to the following risk drivers:

inaccuracy or gaps in governance controls around onboarding of new products, processing of transactions, including 'manual data' controls
taxpayers not undertaking regular reviews of their product master data
incorrect interpretation of the GST exemptions in the GST Act
taxpayers’ reliance on a supplier’s classification without undertaking due diligence to determine the correct GST classification of the products being supplied.

We have published public advice and guidance to assist taxpayers with their GST classification decisions, including:

GSTD 2025/2 Goods and services tax: supplies of sunscreen. The determination provides guidance to help determine when sunscreen products are ‘marketed principally for use as sunscreen’. This is particularly relevant for contemporary products with dual features, for example, sunscreens with moisturiser or tint. It also makes it easier for suppliers of sunscreen products across a supply chain to determine the GST classification of their product.
GSTD 2025/1 Goods and services tax: supplies of food of a kind marketed as a prepared meal. The determination:
- outlines the Commissioner's view on the meaning of 'food of a kind marketed as a prepared meal' by reference to the principles in the Simplot Australia decision
- explains how the key principles from the decision apply across the broad range of products where this issue commonly arises
- provides practical common examples to help illustrate these principles
- outlines impact on existing ATO public advice and guidance products, including the updates we’ve made to the Detailed Food List (DFL) public ruling.
- provides a method statement and compliance approach with examples to assist taxpayers in determining whether salad products are likely to be food of a kind marketed as a prepared meal 
- includes a transitional compliance approach to the GST treatment of certain categories of prepared meal products for tax periods ending on or before 31 December 2025.
GSTD 2026/1 Goods and services tax: supplies of formula product. The determination:
- explains that supplies of formula products, or ingredients to make formula products, for children from 12 months are not GST-free by confirming
  - the term ‘infant’ means a person up to 12 months
  - that formula products are not milk, powdered milk or a beverage containing at least 95% milk or powdered milk
- includes a transitional approach: For tax periods ending on or before 30 June 2026, we will not devote compliance resources to review GST treatment of
  - formula products marketed principally for children aged from 12 months
  - products marketed principally as ingredients for formula products for children aged from 12 months.

We also published a Self-review checklist for small to medium businesses and Self-review guide for medium to large business to provide taxpayers with practical step-by-step guidance to:

undertake regular self-review of the GST classification of their supplies
assess the robustness of business system processes and controls that directly impact the decisions on GST classification of supplies.

A key focus of our reviews of financial services entities is ensuring that taxpayers correctly deny input tax credits on costs to the extent they relate to making input taxed financial supplies (and have adopted approaches in line with current ATO public guidance), correctly claim reduced input tax credits and applied the GST reverse charge on cross-border acquisitions. This also includes ensuring that relevant provisions (such as those for decreasing adjustments) are applied correctly amongst insurers.

Our observations for financial supplies and acquisitions as at 30 June 2026 follow.

Table 8: Financial services and acquisitions assurance ratings by review outcomes
Assurance ratings as at 30 June 2026	Percentage of Top 100 review outcomes
High	65%
Medium	25%
Low and red flag	8% (8% and 0%)
Not rated	2%

Table 9: Reverse charge on cross-border acquisitions assurance ratings by review outcomes
Assurance ratings as at 30 June 2026	Percentage of Top 100 review outcomes
High	59%
Medium	35%
Low and red flag	6% (6% and 0%)
Not rated	0%

Table 10: Apportionment or extent of creditable purpose including change in creditable purpose
Assurance ratings as at 30 June 2026	Percentage of Top 100 review outcomes
High	35%
Medium	29%
Low and red flag	18% (18% and 0%)
Not rated	18%

Key observations for 2025–26 follow:

Although most of the financial services market have adopted fair and reasonable GST apportionment methodologies in line with our published views in guidance (for example, PCG 2019/8, GSTR 2006/3, GSTR 2019/2, GSTR 2002/2), a small number of taxpayers in the market continue to utilise high risk apportionment practices which do not reflect an accurate relationship between costs incurred and supplies made.
We have observed an interpretation of the reduced input tax credit (RITC) regulations on the concept of 'facilitation' and 'arranging' which appears to be wider than intended. We caution taxpayers not to apply a ‘one size fits all’ approach where RITCs are claimed based on vendor as not all acquisitions may be reduced credit acquisitions. Our expectation is that such claims be assessed on a case-by-case basis to ensure RITC eligibility is in line with published guidance in GSTR 2004/1. This includes systemic errors driven by a 'set and forget' approach being applied to claiming RITCs based on general ledger codes, without conducting periodic self-review transactional analysis.
We continue to observe significant errors in the general insurance industry relating to, in particular, the availability of decreasing adjustments. General insurers should be mindful of ensuring that there are controls in place to verify or sense check the input tax credit entitlement of the insured used in calculating decreasing adjustments.
Taxpayers have now largely settled the outcome around the ability to claim decreasing adjustments for remediation payments ensuring they have evidence of a supply and an adjustment note or recipient-created adjustment note to substantiate any claim.

We encourage taxpayers to consider our published practical guidance on the:

3TM Tier 2: Treatment and reporting for GST purposes; Tier 3: Reporting of GST on low value imported goods and inbound intangible supplies by offshore entities

This risk is associated with the correct GST treatment of goods or services supplied by offshore entities to Australian consumers.

We continue to observe that top 100 taxpayers in the digital economy have related offshore entities which are liable to remit GST because they:

make sales of digital products and services or low value imported goods
facilitate supplies by offshore merchants through platforms they operate.

A key focus area is the application of GSTR 2017/1 Goods and services tax: making cross-border supplies to Australian consumers, whether large offshore businesses or platforms have implemented the permitted approaches, on a ‘supply-by-supply’ basis and beyond the initial transaction, to identify transactions made to registered Australian businesses, where the offshore entity is not required to charge GST. Top 100 taxpayers are at risk of implementing a set-and-forget approach, where they only collect the required information through the initial transaction. The public consultation of Draft GSTR 2026/D1 (update to GSTR 2017/1) has concluded, and a final update to the ruling is currently underway.

3TM Tier 2: Treatment and reporting for GST purposes; Tier 3: Treatment applied to real property transactions and accommodation

Through our continued focus on assuring the correct treatment of property transactions and supplies of accommodation, we have obtained a good understanding of the risks in the industry and coverage of key business models.

The large taxpayers are generally well across the relevant GST provisions. However, there are some areas of concern where our focus remains, such as:

eligibility for and application of the margin scheme
treatment of build-to-rent activities, any changes in intended use of the property
timing and calculations of adjustments under Divisions 129 and 135 for acquisitions of a going concern
GST classification of supplies in arrangements for the provision of short-term accommodation by the accommodation providers
use of fair and reasonable apportionment methodologies for mixed use developments
treatment of inter-group and related party arrangements
for retirement villages, characterisation of the supplies made to the residents and apportionment of costs.

Recently we published our intention to develop industry specific GST public advice and guidance for build-to-rent residential property developments at Advice under development – GST issues.

The draft update will provide further clarity on how the existing law applies to modern build-to-rent developments and assist taxpayers to determine whether their premises are residential premises or commercial residential premises.

3TM Tier 1 Actions that support tax compliance

3TM Tier 2: GST governance, systems and controls; Tier 3 Effective systems and controls ensure accurate GST reporting and issuance of invoices

Recipient created tax invoices (RCTIs) is one of our most common assurance areas reviewed. Our review outcomes as at 30 June 2026 for completed reviews that covered RCTIs are as follows.

Table 11: RCTI assurance ratings by review outcomes
Assurance ratings as at 30 June 2026	Percentage of Top 100 review outcomes
High	65%
Medium	26%
Low and red flag	9% (8% and 1%)

Although a small percentage of RCTI arrangements are rated as low assurance (8%) or red flag (1%), we've observed positive changes with taxpayers across a range of industries. They have been updating their processes to ensure they periodically check that the supplier remains GST-registered (including automated validation checks), in line with our best practice expectations. We have combined the relevant requirements into one legislative instrument LI 2023/20. An RCTI will only be valid if all the requirements are met, including that both the supplier and recipient are registered for GST at the time the invoice is issued.

Understanding the alignment between accounting and GST

We seek to understand and explain the various streams of economic activity and how they are treated for GST, which may include applying the GAT.

Ratings

We apply a consistent rating system when reviewing and assessing the alignment of accounting figures to amounts reported on the business activity statement (BAS). This includes also understanding the reasons for any variances.

Table 12: Staged ratings
Colour indicator	Rating	Category description
	Stage 3	We understand and can explain the variance between accounting figures and the amounts reported on the BAS. As a result of applying the GAT, we understand why accounting and GST results vary and this understanding is sufficiently supported by objective evidence.
	Stage 2	Further analysis and explanation are required to understand the variances between accounting figures and the amounts reported on the BAS. As a result of applying the GAT, we don't fully understand why accounting and GST results vary or this understanding isn't sufficiently supported by objective evidence.
	Stage 1	We don't understand and can't explain the variances between accounting figures and the amounts reported on the BAS.
	Red flag	We identified concerns from our analysis of the variances between accounting figures and the amounts reported on the BAS.
–	Not rated	We haven't assessed the various streams of economic activity or why accounting and GST results vary using the GST analytical tool.

Observations

The GAT is applied under this focus area. We apply the GAT in each top 100 GST assurance review except to GST reporters who are predominately input taxed, for example banks and APRA-regulated super funds.

The GAT uses a standard method statement applying a ‘top down’ approach to identify and understand key variances between accounting figures reported in audited financial statements and GST reported in the BAS’. The GAT is a useful tool for taxpayers to check how their various streams of economic activity are treated for GST purposes and have confidence in their GST outcomes.

The application of the GAT is an important component in respect of assuring the GST outcomes of taxpayers in the top 100 GST assurance reviews. As we continue to refine and enhance the GAT analysis, it's helping to provide an informed basis to drive the work program and areas of focus across assurance reviews. Identifying the key variances between accounting and tax is helping us understand the various streams of economic activity of a taxpayer and how they are treated for tax purposes. This helps us identify and target our reviews to the most important or critical GST risks.

We have recently published the GST analytical tool (GAT) guide (previously made available to taxpayers individually at commencement of a review), which along with the GST analytical tool (GAT) – frequently asked questions, support taxpayers and their advisers with their GST assurance reviews.

We have observed generally that the completion of the GAT can assist in identifying GST reporting errors. We continue to work closely with taxpayers to apply the GAT to demonstrate how understanding the variances between accounting and tax can be practically achieved.

Our approach has resulted in most taxpayers preparing their own GAT calculations for top 100 reviews and achieving either a Stage 3 or Stage 2 rating based on our analysis of those calculations. We recommend that top 100 taxpayers (who are required to prepare the GAT) embed the GAT process into their GST reconciliation and governance procedures to enable them to compare and explain variances between GST reporting on the BAS and business outcomes as reported in financial statements.

Graph 13 – GAT ratings for the most recent GST reviews completed where the GAT has been applied as at 30 June 2026

Percentage of GAT ratings: stage 3 45%, stage 2 43% and stage 1 12%.

We observed that 45% (an increase from 38% in 2025) of GST reporters with the GAT applied in their assurance review attained the highest rating for this focus area (Stage 3). This means that there is sufficient objective evidence to support our understanding on why accounting and GST results vary. In most cases, the GAT was completed by the taxpayer where calculations provided were supported by objective evidence and explanations.

A further 43% of GST reporters with the GAT applied attained a Stage 2 rating. This means that we don't have sufficient objective evidence to fully understand why accounting and GST results vary. In most cases, there was a lack of evidence provided for some key adjustments. If these adjustments were to be evidenced correctly, Stage 3 ratings could have been achieved. For many GST reporters, a Stage 2 rating will be a satisfactory rating for the alignment between accounting and GST focus area.

The remainder of GST reporters who had the GAT applied (12%) attained a Stage 1 rating.

We've observed that most GAT calculations resulted in small overall variances when comparing the adjusted revenue and expenses to the 1A – GST on sales and 1B – GST on purchases labels in the BAS. The key difference between a Stage 3 and a Stage 2 rating comes down to how well those adjustments can be explained, the quantum of overall unexplained variance and the extent to which they can be supported by objective evidence. We note that while in some cases the overall unexplained variances may be low, there can also be significant unexplained variances between the value of the adjustments and the objective evidence provided, which would mean a Stage 2 rating is provided rather than a Stage 3 rating.

A very small number of top 100 GST reporters have so far prepared documents detailing their procedures in place to perform the BAS to financial statement reconciliation (including where applicable, GAT preparation or similar methodology) as part of their MLC 7 controls within their GST governance framework. We consider this to be best practice and encourage all taxpayers to embed the GAT into their governance systems.

What a high assurance rating means for GST

An overall high assurance rating means that we obtained assurance that the GST reporter paid or reported the right amount of GST for the period reviewed.

Where a GST reporter receives a high assurance rating for a significant or new transaction, a transaction for a tax risk flagged to market, or a specific tax risk, this means that for this issue, we obtained assurance that the taxpayer reported the right amount of GST in their activity statement.

The GST reporter can therefore rely on a high assurance rating to mean we won't initiate any review (including assurance) or audit activity for the period reviewed on relevant issues in the activity statement reviewed. This is other than any issues listed as requiring further review in the future assurance plan or similar work plan. Similar work plan includes a taxpayer specific justified trust maintenance plan, issues register or annual review plan.

It will only be in exceptional circumstances that we'll apply compliance resources to review any of the relevant issues in the period reviewed. The following circumstances are likely to constitute exceptional circumstances:

Legislation is enacted, a final decision of the court or tribunal is made, or there is a precedential ATO view that applies retrospectively to the period reviewed.
A review is required to complement compliance activity or give effect to a determination, of another government agency or regulator.
There's a self-amendment or objection to the activity statement for the period reviewed (we'll review the statement in for the issue covered by the self-amendment or objection and related issue) or the issue is impacted by the taxpayer correcting an error on that issue in a later tax period.
The taxpayer has subsequently notified us of a disclosure issue or error that should be corrected. Relevant factors for consideration include materiality, potential risk to revenue and likely proliferation in the market or consistency with the policy intent.
There's a change of tax treatment or position by the taxpayer or a party to a supply in which the taxpayer is a participant in that period or in subsequent periods (other than due to a retrospective change in law or a precedential ATO view). Specifically, where it means that no GST is ever payable on a supply, there is a double input tax credit benefit (such as 2 entities claiming the same input tax credit on a supply), or that an input tax credit is available for one entity with no GST being payable by the other.
It becomes apparent to us that full and true disclosure was not made.
There's potential application of the anti-avoidance provisions.
Fraud or evasion becomes evident to us.