Top 1,000 GST assurance

GST assurance

From 1 July 2019 to 30 June 2026, we have completed 1,034 reviews, covering 860 taxpayers. In the 2025–26 financial year alone, we completed 141 reviews, of which 118 were for taxpayers who had not previously had an assurance review.

In scoping our assurance reviews, we have regard to all information provided by the taxpayer including documentation obtained in previous assurance reviews and responses contained within the SAGR. In the 2025–26 financial year, taxpayers had lodged a SAGR in 8% of the reviews completed. In these cases, we had regard to the SAGR responses before commencing our engagement to tailor the scope of the review and our information requests. We observed that the SAGR lodgment reduced the intensity of our assurance reviews and allowed us to further streamline our information gathering. We expect SAGR responses will in some instances provide sufficient information without the need to undertake a further review.

Population coverage

Of the taxpayers currently in the Top 1,000 program, as of 30 June 2026 we have completed 822 reviews, covering 666 unique taxpayers.

Health of the system

The table shows the current population by the latest assurance rating and the amount of GST paid and GST throughput in 2023–24 income year for the taxpayers in the ratings.

Note that the assurance ratings of individual taxpayers use the latest assurance rating (which could relate to a different year) as a proxy for the population coverage of key tax figures.

Table 20: GST population latest rating and 2023–24 income year tax figures (nearest hundred million $)

Latest assurance rating	Latest rating (%)	GST paid ($b and % share)	GST throughput ($b and % share)
High assurance	46%	$7b (46%)	$49.2b (49%)
Medium assurance	49%	$7.3b (48%)	$46.8b (46%)
Low assurance	5%	$1.0b (6%)	$5.1b (5%)

Ratings

The overall level of assurance is an evidence-based assessment of whether we consider the taxpayer has paid the right amount of GST.

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

Table 21: Ratings categories for overall levels of assurance on GST

Colour indicator	Rating	Category description
	High	We obtained assurance that the taxpayer paid the right amount of GST for the scope and period of this review.
	Medium	We obtained assurance in relation to some but not all areas within the scope reviewed. For those areas not yet assured, further evidence and/or analysis will be required before we obtain assurance that the taxpayer paid the right amount of GST.
	Low	We have specific concerns around the taxpayer’s compliance with the GST laws and the amount of GST paid relevant to the period and scope of this review.

Obtaining overall high assurance rating for GST

In the Top 1,000 program, we apply a principled approach to reaching overall high assurance (justified trust). This is based on 2 elements:

1. A quantitative threshold of more than 90% tax assured and economic activity correctly reported.

2. An objective assessment of 5 qualifying factors.

The 5 qualifying factors

1. Tax risk management and governance

Tax risk management and governance is rated at least a stage 2.

2. Tax risks flagged to market

Any material or significant tax risks flagged to market through PCGs or TAs and reviewed in the combined assurance review must each receive at least a medium level of assurance and not require any further ATO next actions based on the information provided.

3. New, significant transactions and specific tax risks

Any material new or significant transaction reviewed in the combined assurance review must each receive at least a medium level of assurance and not require any further ATO next actions based on the information provided.

4a. Alignment between accounting and tax results – GST Analytical Tool (GAT)

The 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 new areas of concern and is rated as high assurance.

4b. Correct reporting (predominantly input-taxed suppliers only)

The results of the e-audit, third-party data testing and transaction testing have been verified with objective evidence provided by the taxpayer. The data and transaction testing has not highlighted any new areas of concern and is rated as high assurance.

5. Cooperative and collaborative behaviour

The taxpayer has been engaged and collaborative throughout the process we have not observed any non-cooperative behaviour.

Overall levels of assurance

We have seen an increase in the number of taxpayers where we have assurance that they have paid the right amount of GST, with 46% of current Top 1,000 taxpayers now assured at overall high assurance as at their latest review. About half of the current Top 1,000 taxpayers (49%) obtained a medium overall assurance rating, and 5% have a low assurance rating (refer to graph 16).

In the 2025–26 financial year alone, 54% of reviews achieved a rating of high assurance, which is higher than the result for all reviews to date.

With the introduction of the SAGR, we are seeing a reduction in the intensity of assurance reviews being undertaken for taxpayers that have been reviewed before. We expect SAGR responses will in some instances provide sufficient information for us to retain a taxpayer’s previous GST assurance ratings without the need to undertake further review.

Graph 16: Overall GST assurance ratings at latest review for current Top 1,000 taxpayers – 30 June 2026

 

Comparison of previous to latest overall ratings

We have now assured 121 current Top 1,000 taxpayers for GST more than once. Graph 17 shows the movement in ratings for these taxpayers between the previous and the latest review.

Graph 17: Comparison of previous and latest overall GST assurance ratings for current Top 1,000 taxpayers – 30 June 2026

As graph 17 shows, we observe that:

• There are substantial improvements in our level of assurance over time. Taxpayers improve their assurance in subsequent reviews. Around half of current taxpayers who were at medium assurance achieved high assurance in their next review.
• The vast majority of taxpayers improve ratings and few fall backwards over time. At a population level, over 35% of taxpayers improved their overall assurance rating in their latest review compared to their previous review, whereas 4% of taxpayers saw their ratings drop.

Overall assurance rating for reviews completed by industry

Graph 18 shows the latest overall assurance ratings for current Top 1,000 taxpayers by industry.

The groupings are:

• banking, finance and investment, superfunds and insurance (FS)
• manufacturing, construction and agriculture (MCA)
• mining, energy and water (MEW)
• wholesale, retail and services (WRS).

In the 2025–26 financial year we have observed significant improvement in assurance levels in the wholesale, retail and services (44% high assurance, up from 31%) and financial services industries (50% now at high assurance, up from 36%).

Graph 18: Overall GST assurance ratings at latest review for current Top 1,000 taxpayers, by industry – 30 June 2026

Tax risk management and governance

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 risk management and governance is a key focus area for GST under the justified trust methodology. As a transactional tax that is data driven, it is important that there is a strong, board-endorsed tax governance framework and that it is 'lived' in practice.

We consider the existence, design and operation of a tax control framework for GST focusing on the 8 controls set out in the GST Governance, Data Testing and Transaction Testing Guide (GST Guide).

The GST Guide provides guidance to help taxpayers conduct a self-review of their tax control frameworks for GST purposes. Our reviews focus on the following controls aligned with the justified trust objectives:

1. Board-level control 1 (BLC 1) – Formalised tax control framework
2. Board-level control 3 (BLC 3) – The board is appropriately informed
3. Board-level control 4 (BLC 4) – Periodic internal control testing
4. Managerial-level control 1 (MLC 1) – Roles and responsibilities are clearly understood
5. Managerial-level control 3 (MLC 3) – Significant transactions are identified
6. Managerial-level control 4 (MLC 4) – Controls in place for data
7. Managerial-level control 6 (MLC 6) – Documented control frameworks
8. Managerial-level control 7 (MLC 7) – Procedures to explain significant differences.

For GST, our key focus is on BLC 4, MLC 4, MLC 6 and MLC 7 as they directly impact the correct reporting of GST.

Ratings

We apply a consistent rating system when reviewing and assessing tax governance. We consider the existence, design and operation of a tax control framework for GST. During the review, we refer to the initial areas of focus set out in the GST Guide before their review starts.

Table 22: Ratings

Colour indicator	Stage	Category description
	Stage 3	The taxpayer provided evidence to demonstrate that a tax control framework exists, has been designed effectively and is operating effectively in practice.
	Stage 2	The taxpayer provided evidence to demonstrate that a tax control framework exists and has been designed effectively.
	Stage 1	The taxpayer provided evidence to demonstrate a tax control framework exists.
	Not evidenced or concerns	The taxpayer did not provide sufficient evidence to demonstrate a tax control framework exists or we have significant concerns with the taxpayer's tax risk management and governance.

Graph 19 shows the tax governance ratings for the most recent GST assurance reviews for current Top 1,000 taxpayers as at 30 June 2026. Some 48% of taxpayers achieved a stage 1 rating for GST tax governance, while 46% received a stage 2 rating.

Graph 19: Tax risk management and governance ratings for GST at latest review for current Top 1,000 taxpayers – 30 June 2026

In the reviews completed in the 2025–26 financial year alone, we have continued to see a high number of taxpayers with effectively designed GST governance, with 55% of those reviewed achieving a stage 2 rating specifically for GST governance. A further 4% of taxpayers reviewed achieved a stage 3 rating for governance, having been able to provide evidence that their controls are operating effectively. We expect to continue to see this positive shift in governance ratings for GST.

We have also continued to observe an increase in taxpayer willingness to develop board-approved GST testing plans or, in the absence of a plan, a board-endorsed commitment to undertake controls testing within a 3–5 year rolling audit period. This increase in providing such commitments for BLC 4 is the main driver contributing to the increase in stage 2 ratings for governance in GST.

A stage 1 rating for governance is the most significant reason preventing taxpayers from achieving overall high assurance for GST. For reviews completed in the 2025–26 financial year, 90% of taxpayers that achieved an overall medium assurance rating had not yet achieved at least a stage 2 or 3 governance rating. In approximately 55% of these cases, governance was the only reason a taxpayer did not achieve overall high assurance.

Graph 20 below shows the previous and latest governance rating for current Top 1,000 population taxpayers that have been reviewed more than once. As can be seen, there is a substantial increase in the proportion of taxpayers reaching a stage 2 or 3 rating, from 30% at stage 2 or 3 for the previous review compared to 62% in their latest review.

Graph 20: Comparison of previous and latest tax risk management and governance ratings for GST for current Top 1,000 taxpayers – 30 June 2026

Areas of focus

The way in which a taxpayer's systems create, capture, collate and report GST is fundamental to the correct reporting of their GST obligations. The ATO considers the GST governance and tax control framework supporting this is one of the most significant focus areas for a GST assurance review because incorrectly reported transactions can often lead to significant GST effects over time. For example, an error in the way a supply is coded for GST purposes can extrapolate to significant GST shortfalls when replicated through large volumes of sales.

The following observations are common issues for taxpayers to focus on and improve to address their GST risk management and governance frameworks. These are specific observations from our recent reviews, and taxpayers should consider these in conjunction with the GST Guide.

In addition to these comments, we note that as more taxpayers are reaching a stage 2 rating for their GST risk management and governance framework, we are observing that more taxpayers have started to undertake periodic internal control testing. We expect that more taxpayers will commence carrying out periodic internal control testing, which includes the GST fundamental and common controls.

When assessing whether a taxpayer has GST controls that are operating effectively, we will first confirm that the controls are designed effectively, either by considering any changes to the controls since our earlier review or, where we haven't previously rated those controls at stage 2, by examining the objective evidence to support a stage 2 rating.

Taxpayers should ensure they have assessed their GST controls as meeting the requirements for design effectiveness by referring to the GST Guide before commencing periodic internal control testing.

Common controls

The following 5 controls (BLC 1, BLC 3, MLC 1, MLC 3 and MLC 7) are referred to as the 'common controls' because:

• the design elements are equally as critical for both income tax and GST
• there are common features in the way these controls are evidenced.

In situations where these common controls are not at a stage 2 for GST, it is typically due to a control being designed for income tax but not extending to GST.

We are observing that more taxpayers are addressing the GST aspects of the common controls whilst designing the income tax controls. As a consequence, an increasing number of taxpayers are obtaining stage 2 for the GST specific aspects of these common controls.

MLC 3: Significant transactions are identified

Taxpayers are generally able to sufficiently describe significant transactions and provide relevant risk criteria, i.e. non-monetary, reputational risk, etc. However, we observed that taxpayers do not always define the materiality threshold for significant transactions in monetary terms. To achieve a stage 2 for MLC 3 it is necessary that the control specifies the monetary threshold in dollar terms as either a prescribed dollar value or a calculation that results in a dollar value.

BLC 4: Periodic internal control testing

The majority of taxpayers are achieving a stage 2 rating for BLC 4 through the provision of a commitment to:

• undertake periodic internal control testing, in line with Table 1 of the GST Guide
• develop their detailed periodic internal control testing plan at a later date, before commencing the actual controls testing.

We have increased our focus on the completeness of such commitments, specifically in relation to the scope of the testing, timing, independence and reporting of testing outcomes. It is crucial that BLC 4 is designed effectively at a stage 2 before commencing any testing program.

We require that periodic internal control testing must be undertaken by a suitably qualified reviewer who is independent of the tax control owner. This can include the internal audit function, where that function sits outside of the tax function and has separate reporting lines.

Alternatively, the testing may be undertaken by a third party. Determining whether a third party is independent for the purposes of undertaking internal control testing will be a question of fact and degree. It is relevant to consider whether the third party has undertaken any of the responsibilities of the control owners, including where the third party has undertaken the design of any of the tax controls or any BAS preparation work. If the third party is not considered independent, the taxpayer will not have met the requirements for a stage 3 rating.

To evidence the outcomes of the testing, we need to be provided with:

• the testing methodology and sample size selected
• the types of source documents relied upon by the tester
• the final testing results
• an outline of the steps taken to address any issues identified in the testing
• board (or board delegate) acknowledgement of the test results and the actions that will be undertaken to address issues identified.

To achieve a stage 3 rating, a taxpayer must have:

• completed controls testing for all the GST controls (i.e. the fundamental and common controls)
• addressed any issues identified
• have a plan to continue testing into the future.

MLC 4: Controls in place for data

We are increasingly observing that taxpayers generally have robust controls in place for the set-up and maintenance of GST data for their accounts payable and accounts receivable functions (i.e. for supplies and acquisitions made in the normal course of business). However, we continue to observe that taxpayers need to focus on ensuring that there are appropriate fully documented procedures in place for addressing:

• manual adjustments that are outside the usual ledgers, including
  • unusual or 'one-off' transactions
  • adjustments to correct errors
  • routine end of month or year-end adjustments
• the implementation and maintenance of customer, vendor and product master files.

MLC 7: Procedures to explain significant differences

Taxpayers are generally able to describe the procedures for the monthly reconciliation of the BAS outcomes with the general ledger. However, we observed that most taxpayers do not undertake an annual reconciliation between the BAS outcomes and the audited financial statements. For those that do undertake this reconciliation, the process is not generally fully documented. Including this reconciliation in a governance framework and combining it with reporting the outcomes of the reconciliation in the Supplementary annual GST return may reduce the intensity of future GST reviews for most taxpayers.

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

We review the GST treatment of the taxpayer’s business activities, particularly significant and new transactions. We also review risks or concerns communicated to the market to determine if they are present.

Ratings

We apply a consistent rating system when assessing the GST treatment of taxpayer’s business activities.

Table 23: Ratings

Colour indicator	Rating	Category description
	High	We obtained a high level of assurance that the right GST outcomes were reported in the taxpayer's BAS for the scope and period of this review.
	Medium	More evidence or 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.
_	Out of scope	We have not evaluated this item and not expressed a rating.

Observations

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

Common GST risks in incorrect reporting of supplies and acquisitions often arise from inadvertent errors. Such errors are:

• commonly identified during a taxpayers’ self-review of its systems and reporting of GST
• result in the taxpayer voluntarily disclosing a GST shortfall for tax periods both within and outside the tax periods being reviewed.

It is important for businesses to have good governance and control frameworks in place that detect and remediate errors on a regular basis (even if not material in dollar terms). The transactional nature of GST means that undetected errors can compound to material amounts unless identified and addressed. We have also received voluntary disclosures where errors have occurred in relation to one-off transactions that are not core business activities.

We continue to encourage taxpayers not to wait for ATO engagement reviews to commence to undertake a review of their GST reporting. We observed that 27% of taxpayers in the 2025–26 financial year made voluntary disclosures either upon being notified of a review starting or during the progress of the combined assurance review. This is lower than the 2024–25 financial year figure (34%).

Three-tier model behaviours, events and focus areas

Our assurance activities under this pillar consider a broad range of focus areas identified within the public and multinational business three-tier model as driving 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 24: 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 25: 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

The following sections outline specific behaviours that drive tax performance and focus areas that attract our attention. We do not see these in all cases and this is not an exhaustive list. Assurance areas have been grouped according to the related 3TM behaviour, event or focus area(s).

3TM Tier 1: 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

We continue to observe taxpayers incorrectly classifying taxable supplies as GST-free. One-third (33%) of the issues that received a separate assurance rating for this risk area in the 2025–26 financial year obtained a low or red flag assurance rating.

We observe that incorrect classification of products is driven by a number of factors:

• insufficient governance controls around onboarding of new products
• failure to undertake regular reviews of the product master list to identify appropriate treatments
• incorrect interpretation of the GST legislation relating to the products
• reliance on the GST treatment by the supplier without undertaking due diligence to determine the correct GST classification of the products.

Recent public advice and guidance have been published to assist taxpayers with their GST classification decisions:

• GSTD 2025/2 Goods and services tax: supplies of sunscreen
• GSTD 2025/1 Goods and services tax: supplies of food of a kind marketed as a prepared meal
• GSTD 2026/1 Goods and services tax: supplies of formula product
• we also published a 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.

3TM Tier 2: Treatment and reporting for GST purposes; Tier 3: Treatment of significant or unusual transactions involving financial supplies (e.g. financial acquisition threshold) and Treatment applied by financial services, investment and insurance industries (e.g. GST apportionment, reduced input tax credits and reverse charge)

We continue to observe errors in the GST treatment of financial supplies. In the 2025–26 financial year, 10% of issues that received a separate assurance rating for this risk area obtained a low or red flag assurance rating. This is primarily related to at least one of these issues.

• The application of Financial Acquisition Threshold (FAT) to determine whether input tax credits can be recovered on costs, specifically in relation to mergers, demergers, company acquisitions, initial public offerings or other similar activities involving share transactions.
• Claiming Reduced Input Tax Credits (RITCs) on costs without fully assessing eligibility, including mixed supplies under IT outsourcing contracts.
• Failure to apply the reverse charge provisions to services provided by overseas based branches or related entities, such as IT and administration support services.
• Allocation of relevant costs to merger and acquisitions (M&A) transactions.

We encourage taxpayers, specifically those who do not make routine input taxed supplies, to focus on the application of the FAT in relation to one-off merger and acquisition type transactions, and to input tax credit entitlements.

We refer taxpayers impacted by the above issues to consider ATO guidance published in relation to:

• Goods and Services Tax Ruling GSTR 2003/9: Goods and Services Tax: financial acquisitions threshold
• GSTR 2004/1: Goods and Services tax: reduced credit acquisitions
• eligibility of super funds and investor-directed portfolio services investment platforms to claim reduced input tax credits on adviser fees (PDF, 107KB)This link will download a file
• application of the reverse charge provisions – findings of reviews
• GST data tests for the financial services and insurance industry

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

We continue to have concerns in relation to real property transactions, with 15% of issues that received a separate assurance rating for this risk area in the 2025–26 financial year obtaining a low or red flag assurance rating. This is primarily related to at least one of these issues:

• application of the margin scheme. For more information, see GSTR 2006/8: Goods and services tax: the margin scheme for supplies of real property acquired on or after 1 July 2000
• application of the GST-free farmland provisions
• claiming of input tax credits in relation to the supply of residential accommodation specifically in relation to supplies to employees. For more information, see GSTR 2012/6 Goods and services tax: commercial residential premises.

Recently we published our intention to develop industry specific GST public advice and guidance for build-to-rent residential property developments on 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 2: Treatment and reporting for goods and services tax (GST) purposes - Agency Arrangements

The following issues have been identified as areas of concern in respect of agency arrangements, with 22% of ratings in respect of agency arrangements in the 2025–26 financial year obtaining a low or red flag assurance rating. This is primarily related to at least one of these issues:

• insufficient or inadequate documentation to support the application of Subdivision 153-B arrangements of the A New Tax System (Goods and Services Tax) Act 1999 ('GST Act')
• claiming of input tax credits. Goods and Services Tax Ruling GSTR 2000/37: Goods and services tax: agency relationships
• incorrect application of Division 153-B to agent/principal arrangements.

Taxpayers should ensure agency arrangements are appropriately documented and periodically reviewed to confirm compliance with GST legislative requirements and ATO guidance.

3TM Tier 2: Treatment and reporting for goods and services tax (GST) purposes – Staff expenses

We continue to observe some incorrect GST treatment of staff expenses, with 10% of issues that received a separate assurance rating for this risk area in 2025–26 financial year obtaining a low or red flag assurance rating. These were primarily due to:

• errors in reporting GST on post tax employee contributions received
• incorrectly treating acquisitions as creditable, including claiming input tax credits on non-deductible entertainment expenses.

These findings are consistent with prior years and highlight the importance of reviewing GST outcomes for staff-related transactions, particularly where there is interaction with other taxation obligations, including fringe benefits tax and income tax.

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

We continue to observe some compliance issues with respect to RCTIs, with approximately 5% of taxpayers that received a separate assurance rating for RCTIs in the 2025–26 financial receiving a low assurance or red flag rating in respect of this issue. This is less than the prior year and reflects positive changes by taxpayers across a range of industries, putting in place valid RCTI agreements with suppliers and updating processes for monitoring that suppliers continue to be registered for GST.

The requirements for issuing RCTIs are outlined in Legislative Instrument LI 2023/20, A New Tax System (Goods and Services Tax): Recipient Created Tax Invoice Determination 2023.

We have also issued guidance on RCTI arrangements to support compliance and published a new Draft Goods and Services Tax Ruling GSTR 2026/D2 Goods and services tax: recipient created tax invoices.

Alignment of tax and accounting outcomes

We:

• analyse the differences between the BAS outcomes and accounting outcomes
• seek to understand and explain the various streams of economic activity and how they are treated for GST by applying the GST Analytical Tool (GAT).

This process provides an objective basis to obtain greater assurance.

The GAT is a compulsory element of the combined assurance review, other than for taxpayers predominantly making input taxed supplies. For these taxpayers, such as those in the financial services sector, we continue to undertake data and transaction testing to provide assurance for GST.

For all other taxpayers we use the GAT, combined with limited transaction testing, to provide assurance, identify key risk areas and assess whether GST is correctly reported.

Ratings

We apply a consistent rating system when reviewing and assessing the alignment of tax and accounting outcomes, as outlined below.

Table 26: Ratings

Colour indicator	Rating	Category description
	High	We understand and can explain why the various streams of economic activity and the accounting and GST results, vary.
	Medium	Further analysis and explanation is required to understand the various streams of economic activity and/or why the accounting and GST results vary.
	Low	We identified concerns from our analysis of the various streams of economic activity and/or why accounting and GST results vary.
	Red flag	We do not understand and cannot explain the various streams of economic activity and/or why accounting and GST results vary.

The ratings for the alignment between tax and accounting area arising in the GST assurance reviews completed are shown in graph 21.

We continue to observe the majority of current Top 1,000 taxpayers achieving a high assurance rating for the GAT. In the reviews completed in the 2025–26 financial year alone, 84% of taxpayers who were reviewed and were applying the GAT were able to explain any differences with reference to objective evidence.

Graph 21: GST alignment of accounting and tax ratings at latest review for current Top 1,000 taxpayers – 30 June 2026

We have observed that taxpayers who are undertaking the GAT for the:

• first time are typically able to complete the revenue side of the GAT and generally only seek assistance from the assurance team to complete the acquisition side
• second time are able to substantially complete the GAT.

A low assurance or red flag for the GAT typically occurs where a taxpayer has made minimal or no attempt to complete the GAT. Where this occurs, a taxpayer is not able to achieve an overall high assurance rating.

We have published guidance to support taxpayers when considering the application of the GAT:

• GST Analytical Tool (GAT) FAQ
• Top 1,000 GAT example.

Graph 22 below shows the previous and latest GAT rating for current Top 1,000 taxpayers that have been reviewed more than once.

Graph 22: Comparison of previous and latest GST alignment of accounting and tax ratings for current Top 1,000 taxpayers – 30 June 2026

The graph shows a significant trend of taxpayers achieving a higher rating in their latest review. We attribute this to our observation that once a taxpayer has undertaken the first GAT for their business, which may take some investment to get right, the preparation of GAT for future years becomes more routine and established.

Data and transaction testing

In our combined assurance reviews, we will undertake data and transaction testing (rather than using the GAT) for taxpayers that predominantly make input taxed supplies, such as financial services industry taxpayers (including life insurance).

Data testing involves running numerous pre-determined tests against a defined data set to identify reporting errors and exceptions for further investigation or correction.

Transaction testing involves tracing an identified transaction from its source documentation through to the financial reports to confirm the accuracy of the GST treatment, calculation and reporting of the transaction.

Where errors and exceptions are identified, further investigation or correction will be necessary.

For financial services entities and insurers, we have published bespoke tests that can be used to get greater confidence in correct reporting, see GST data tests for the financial services and insurance industry.

GST next actions

At the conclusion of a combined assurance review, if we have identified areas of concern, we will either:

• provide recommendations for the taxpayer to undertake ('Client next action')
• consider intervention through a formalised 'ATO next action' product.

Where a specific error or risk has been identified, we will typically make recommendations for the taxpayer to action (referred to as a 'Client next action'). In some instances, we will outline an expected timeline by which we require the taxpayer to advise us of what they have done to address those recommendations. During the 2025–26 financial year, 16% of GST assurance reviews resulted in specific follow up actions for the taxpayer.

In respect of GST, this is our most frequently used approach to addressing concerns identified. In considering what a taxpayer has done to address our concerns, we will also consider what the taxpayer has done to ensure the error doesn't continue into future tax periods, such as how governance controls have been strengthened. Where we see errors continue into future years, this is likely to impact on our consideration of administrative penalties and interest applied.

Taxpayers should include actions taken to address our recommendations in the CAR in the next SAGR.

Where we identify a concern that we consider requires further ATO review, we will escalate this issue for a GST risk review or audit. Approximately 1% of taxpayers reviewed in the 2025–26 financial year were escalated for further ATO next action in respect of GST. This is a slight reduction from the escalation rate in the 2024–25 financial year.