Top 1,000 GST assurance

GST assurance

Since we commenced assuring taxpayers in respect of GST in 2019 as of 30 June 2025, we have completed 893 assurance reviews, covering 800 taxpayers.

As the size and composition of the population has changed since commencing the assurance approach for the Top 1,000 in 2016, we have recalibrated our approach to defining the population, bringing the focus of assurance program back to the largest 1,000 taxpayers from the largest economic groups.

For taxpayers currently in the program, as of 30 June 2025, we have completed 735 reviews, covering 643 taxpayers in the population. Unless otherwise stated, any reviews completed on taxpayers that are not in the current population are not included in our statistics in the detailed sections below. In 2025 alone we completed 158 reviews, of which 113 were on taxpayers reviewed for the first time.

Given the increasing number of taxpayers that we are reviewing for a second time for GST, and with the introduction of the Supplementary annual GST return, we will be taking a more tailored approach to our GST assurance reviews. Going forward, our approach to reviews for taxpayers that have previously been assured will be to assess the responses provided by taxpayers and consider whether the responses provided in the return, together with the assurance already attained in prior assurance reviews, continues to give us confidence that the taxpayer is correctly reporting and paying GST. We will then tailor our engagement appropriately.

In some circumstances, this may mean that an assurance review is not undertaken. For example, where a taxpayer has already been assessed as having an effectively designed GST risk management and governance framework (i.e. has achieved a stage 2 for GST governance), has no outstanding ATO or client next actions from their review, there have been no significant changes to their business or systems, and the taxpayer has undertaken a reconciliation between financial statements and BAS reporting, we may not undertake an assurance review. Similarly, we may undertake limited reviews of specific areas, such as the outcomes of periodic internal control testing where the taxpayer has indicated in their Supplementary annual GST return that this has been completed.

Health of the system

The below table shows the current population by latest assurance rating (from any review) and 2023 GST paid. This table outlines the GST reported and paid, as well as the GST throughput, in the 2023 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 in respect of the 2023 year (i.e. the 2023 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.

GST population latest rating and 2023 tax figures (nearest hundred million $)

Latest assurance rating	Latest rating (%)	Net GST (%)	GST throughput (%)
High assurance	41%	$5.3bn (44%)	$38bn (39%)
Medium assurance	54%	$6bn (50%)	$44.5bn (57%)
Low assurance	5%	$0.8bn (6%)	$4.3b (4%)

Ratings

The overall level of assurance is based on an assessment, having regard to objective evidence, as to whether the taxpayer is considered to have paid the right amount of GST.

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

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

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 (Practical compliance guidelines (PCGs), taxpayer alerts) 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 received 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 and in working with the taxpayer we have not observed any non-cooperative behaviour.

Overall levels of assurance

This year we have seen an increase in the number of taxpayers where we have assurance that they have paid the right amount of GST, with 41% of taxpayers assured now at overall high assurance at their last review. The majority of taxpayers (54%) have a medium overall assurance rating, and 5% have a low assurance rating (refer to graph 17).

In 2025 alone, 45% of reviews on taxpayers in the population achieved a rating of high assurance, which is higher than the result than for all reviews to date.

We have now reviewed 103 taxpayers for GST more than once. With the introduction of the Supplementary annual GST return, in coming years we anticipate there will be a reduction in the intensity and number of assurance reviews being undertaken for taxpayers that have already been assured. Where these taxpayers are still in the population, their ratings as at their last review remain in the analysis below.

Graph 17: Overall assurance ratings for all GST assurance reviews for Top 1,000 taxpayers reviewed as at their latest review as of 30 June 2025

Comparison of first and latest review overall ratings

We have now reviewed 103 taxpayers for GST more than once. Graph 18 shows the ratings for all taxpayers after their first review, compared to the latest rating for the 103 taxpayers reviewed more than once.

Graph 18: Overall GST assurance ratings for first review of Top 1,000 taxpayers and overall GST assurance ratings for Top 1,000 taxpayers after their latest review as of 30 June 2025

Graph 19 below shows the comparison for overall GST assurance ratings for those reviewed more than once. As can be seen, there is substantial improvement in rating for these taxpayers.

Graph 19: Comparison of first and latest overall GST assurance ratings for Top 1,000 taxpayers reviewed more than once as of 30 June 2025

Overall assurance rating for reviews completed by industry

Graph 20 shows latest overall assurance ratings for the entire population split by Industry. We continue to see lower levels of high assurance in the wholesale, retail and services industry.

Graph 20: Latest overall assurance rating for Top 1,000 taxpayers by industry as of 30 June 2025

Note that the graph shows the overall assurance ratings by the number of taxpayers for the following key industry groupings:

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

Tax risk management and governance

Tax risk management and governance is a key focus area. 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.

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.

The tax governance ratings for the GST assurance reviews for taxpayers reviewed up to the end of June 2025, as at their most recent review, are in graph 21.

Graph 21: Overall GST tax risk management and governance ratings for Top 1,000 taxpayers reviewed in their latest review, as of 30 June 2025

In graph 21, most taxpayers (52%) achieved a stage 1 for GST tax governance, as at their last review.

In the last 12 months we have continued to see a high number of taxpayers with effectively designed GST governance, with 44% of those reviewed in 2025 achieving a stage 2 rating. Further, 5% 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 and, 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 BLC4 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 2025, 41% of taxpayers that achieved an overall medium assurance rating would have reached an overall high assurance rating had they achieved a stage 2 for governance.

Graph 22 below shows the prior and latest governance rating for 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 stage 3 rating, from 28% for the prior review rating to 58% in their latest review.

Graph 22: Comparison of first and latest GST tax risk management and governance ratings for Top 1,000 taxpayers reviewed more than once as of 30 June 2025

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 on 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 Governance, Data Testing and Transaction Testing 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 and 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 reference to the GST Governance, Data Testing and Transaction Testing Guide prior to commencing periodic internal control testing.

Common controls

Five controls are referred to as the 'common controls' (BLC1, BLC3, MLC1, MLC3 and MLC7) because the design elements are equally as critical for both income tax and GST, and 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 that design doesn't extend to GST.

We are observing that more taxpayers are addressing the GST aspects of the common controls whilst designing the income tax controls and consequently 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 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 BLC4 through the provision of a commitment to undertake periodic internal control testing, in line with Table 1 of the GST Governance, Data Testing and Transaction Testing Guide (GST Guide), and to develop their detailed periodic internal control testing plan at a later date prior to commencing the actual controls testing.

We have increased our focus on the completeness of such commitments, specifically in relation to scope of the testing, timing, independence and reporting of testing outcomes. It is crucial that BLC4 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 with 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 the third party has undertaken the BAS preparation work. If they are 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
• if issues are identified in the testing, an outline of the steps taken to address those issues
• board (or board delegate) acknowledgement of the test results and actions taken to address issues identified.

A taxpayer must have completed controls testing for all the GST controls (i.e. the fundamental and common controls) and have addressed any issues identified to achieve a stage 3 rating and 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 data in relation to GST tax code set-up/maintenance 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, manual adjustments to correct errors and routine end of month or year-end adjustments
• the implementation and maintenance of customer, vendor and product master files.

MLC 7: Documented control frameworks

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, and for those that do undertake this reconciliation the process is not generally fully documented. Including this reconciliation in a governance framework, combined with reporting the outcomes of the reconciliation in the Supplementary annual GST return, may reduce the intensity of future GST reviews for most taxpayers.

Significant and new transactions, specific tax risks and tax risks flagged to market

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.

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

The following areas are key GST risk areas that result in corrections to returns and the need to correct GST reported and paid.

Common GST risks in incorrect reporting of supplies and acquisitions arise from inadvertent errors. Often such errors are identified from a taxpayers’ self-review of its systems and reporting of GST and 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 34% of taxpayers in 2025 made voluntary disclosures upon being notified of a review starting and throughout the progress of the combined assurance review. This has decreased compared to 2024 where 40% of taxpayers submitted a voluntary disclosure.

For taxpayers reviewed in 2025, approximately 30% obtained a low assurance or red flag rating across one or more assurance areas. Of all significant and new transactions, specific tax risks and tax risks flagged to market assured for GST during 2025, approximately 8% were rated as low assurance or red flags. These predominantly related to the following 5 key areas.

Staff expenses

In respect of reviews undertaking in 2025, 14% of ratings for staff expenses obtained a low assurance rating or red flag. These were primarily due to:

• errors in reporting GST on post tax employee contributions, i.e. not accounting for GST on sums received
• incorrectly treating an acquisition as creditable, such as incorrectly claiming input tax credits on non-deductible entertainment expenses.

This trend is consistent with prior years, and one taxpayers should focus on given the interaction with other taxes such as fringe benefits tax and income tax.

Classification of supply of GST-free goods

We continue to observe taxpayers incorrectly classifying taxable supplies as GST-free with 40% of issues that received a separate assurance rating for this risk area in 2025 obtaining a low or red flag assurance rating, primarily in respect of the supply of the following products in 2025:

• medical aids and appliances, including
  • wound care products where the products are widely used in the community by people without illness or disabilities
  • compression socks where the products are designed for, or widely used by, people in the general community to prevent illness or injury, or legs and feet from getting tired and swollen from prolonged standing
  • products that have a sun protection factor (SPF) but are not marketed principally for use as a sunscreen, such as a skin cream with an SPF that is also marketed as 'hydrating' and 'colour correcting', or a lip balm with an SPF that is also marketed to treat dry, chapped lips.
• food and beverages, including
  • food marketed as a prepared meal
  • fruit and vegetable juice beverages that do not consist of at least 90% by volume of juices of fruits or vegetables.

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 incorrect 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 has been published to assist taxpayers with their GST classification decisions, including the following.

• GSTD 2024/D2 Goods and services tax: supplies of sunscreen. The draft 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.

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.

Financial supplies

The following issues have been identified as areas of concern in respect to making financial supplies, with 17% of ratings in respect of financial supplies in 2025 receiving a low assurance or red flag rating for 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
• application of Division 78 on claiming a decreasing adjustment on settlement payments where general insurers do not have adequate controls in place to verify the input tax credit entitlement of the insured used in calculating decreasing adjustments
• claiming Reduced Input Tax Credits (RITCs) on costs without fully considering whether those costs are eligible for a RITC, including mixed supplies under IT outsourcing contracts
• not applying the reverse charge provisions to services provided to it by overseas based branches or associated entities, for example, information technology and administration related support services
• general insurers not having adequate controls in place to verify and sense check the input tax credit entitlement of the insured used in calculating decreasing adjustments.

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 those in the insurance sector to focus on the application of Division 78 and 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: financial acquisitions threshold
• Application of the reverse charge provisions – findings of reviews
• Goods and Services Tax Ruling GSTR 2004/1: Goods and services tax: reduced credit acquisitions
• ATO expectations on how you support your reduced input tax credit claims on complex information technology outsourcing agreements.

Attribution including rebates, discounts and adjustments

We continue to observe that taxpayers continue to make routine accounting and attribution errors, with 40% of ratings relating to attribution in 2025 receiving a low assurance or red flag rating. Areas where we commonly identify concerns include:

• incorrectly treating adjustment events associated with supplies made in previous periods, for example, in the provision of volume rebates
• incorrectly attributing supplies to later tax periods
• incorrectly claiming input tax credits without supporting documentation
• accounting and BAS reporting errors.

Recipient created tax invoices (RCTIs)

We continue to observe an ongoing compliance issue with respect to RCTIs, with approximately 14% of taxpayers that received a separate assurance rating for RCTIs in 2025 receiving a low assurance or red flag rating in respect of this issue due to:

• there being no valid RCTI agreement in place with suppliers, either as a stand-alone agreement or embedded in the invoice
• no robust procedures being in place for ongoing monitoring that suppliers continue to be registered for GST.

Legislative Instrument LI 2023/20, A New Tax System (Goods and Services Tax): Recipient Created Tax Invoice Determination 2023 was issued in 2023, outlining the requirements for issuing RCTIs.

We have also issued guidance on RCTI arrangements to support compliance, including the responsibilities of an RCTI issuer to ensure you meet all the requirements.

Alignment of tax and accounting outcomes

We analyse the differences between the BAS outcomes and accounting outcomes and 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 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 instead of the GAT.

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, which is outlined below.

Ratings

Colour indicator	Rating	Category description
	High	We understand and can explain why the various streams of economic activity and the accounting and income tax results, and 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 income tax, and accounting and GST results vary.
	Low	We identified concerns from our analysis of the various streams of economic activity and/or why accounting and income tax, and 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 income tax, and 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 23.

Graph 23: Overall GST alignment of accounting and tax assurance ratings for Top 1,000 taxpayers reviewed, in their latest review, as of 30 June 2025

We continue to observe the majority of taxpayers achieving a high assurance rating for the GAT, with 80% of taxpayers reviewed in 2025 and applying the GAT being able to explain any differences with reference to objective evidence.

We have observed that taxpayers who are undertaking the GAT for a second time are able to substantially complete the GAT.

Taxpayers 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.

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.

Data and transaction testing

We will undertake data and transaction testing for taxpayers that predominantly make input taxed supplies, such as financial services (including life insurance) industry taxpayers, in combined assurance reviews. For these entities, we don't use the GAT in our combined assurance reviews but use data and transaction testing to assess correct reporting.

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 or we may consider intervention through a formalised ATO next actions 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), and in some instances outline an expected timeline by which we will require the taxpayer to advise us of what they have done to address those recommendations.

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.

Where we identify a concern that we consider requires further ATO review, we will escalate this issue for a GST risk review or audit. Less than 1% of taxpayers reviewed in 2025 were escalated for further ATO action in respect of GST. This is a slight reduction in escalation rate as compared to 2% in the 2024 year.

Appendix 1 – Published guidance

To assist taxpayers in preparing for a combined assurance review, we provide the following published guidance.

• Top 1,000 combined assurance program
• Tax risk management and governance guides  
  • Tax risk management and governance review guide
  • Tax risk management and governance
  • GST governance, data testing and transaction testing guide
  • Governance over third-party data (large super funds, managed funds and insurance companies)
• Outline of typical questions and areas of enquiry  
  
  • Typical questions in a Top 1000 combined assurance review
• GST analytical tool – Top 1,000 GST assurance program.