About the Top 100 GST assurance program
The Top 100 GST assurance program:
- seeks greater assurance that top 100 taxpayers are reporting the right amount of goods and services tax (GST)
- supports and expands on existing compliance approaches, including justified trust reviews for income tax, further enhancing confidence in these taxpayers.
What to expect during your initial GST assurance review
We gain assurance, or identify areas of GST risk, by engaging with you through a GST assurance review (initial review), and subsequent tailored engagements.
When commencing an initial review, we will:
- notify you before we start a review
- give you time to consider making a voluntary disclosure of any tax shortfalls.
We encourage you to review your GST systems and records to check you haven't made any mistakes before we commence our review.
GST assurance review framework
A Top 100 GST assurance review typically involves initial discussions with a tax officer to establish the framework in which we will conduct the review.
You will be provided with a GST assurance review framework. This is a living document that will be updated during the review as required and will include the scope of the review.
Areas of review
During the initial review, we review 4 focus areas and look for evidence that:
- GST controls within your tax governance framework (including the design of business systems to create, capture and report transactions correctly for GST purposes)
- exist (Stage 1)
- are designed effectively (Stage 2)
- are operating in practice (Stage 3)
- none of the GST risks we have flagged to the market are present
- the GST outcomes are correctly reported, and atypical, new, or large transactions are appropriate
- we can understand and explain the various streams of economic activity and how they are treated for GST. This will include applying the GST analytical tool (GAT) unless you are a taxpayer with predominantly input taxed supplies.
How we undertake these activities is tailored to your circumstances, having regard to:
- your overall GST performance
- the type and size of your business activities
- your tax control framework for GST purposes
- our understanding of your business or transactions from prior engagements including income tax pre-lodgment compliance reviews (PCRs).
Ongoing discussions and disclosures
We encourage taxpayers to make disclosures about material new transactions and business changes prior these occurring. You can make disclosures as part of any regular discussions and interaction in ongoing income tax PCRs. We may also identify and raise issues for discussion.
To understand more about our expectations for disclosures and how we will action these, see Top 100 Pre-lodgment disclosure framework.
What to expect following your initial review
Once the initial review is concluded, we will provide each reporter with a tailored assurance approach that seeks to build upon and leverage as far as possible from previous assurance activities.
At the conclusion of the initial review, we will share our findings with you in writing. This includes discussing:
- the overall assurance rating, including a summary of assurance attained or refreshed across the 4 focus areas of justified trust
- a summary of objective evidence relied upon
- our proposed future assurance plan, including our expectations of actions to be taken prior to the next review.
Our overall assurance rating guides our future engagement with you. An explanation of assurance ratings is provided in our Findings report – Top 100 income tax and GST assurance programs.
What to expect in your subsequent reviews
If you attain overall low assurance in your initial review, we will continue annual reviews until overall high or medium assurance is attained.
How we will focus our efforts each subsequent year is explained in our Tailored approach to attaining, maintaining and refreshing GST assurance.
When you attain an overall high or medium level of assurance, we:
- may undertake targeted assurance activities, where necessary
- will otherwise take a monitoring and maintenance stance for the next 3 financial years
- will conduct either a refresh review or an assurance check-in in the fourth year, based on eligibility.
More information about our monitoring stance and future engagement approaches, including eligibility for an assurance check-in, is outlined in our guidance, Future GST engagement after initial GST assurance review.
Preparing for a GST assurance review
Engaging early with you includes information on our expectations around pre-lodgment disclosures.
GST governance framework
The GST Governance, Data Testing and Transaction Testing Guide contains detailed guidance on how the justified trust methodology is applied. It explains how:
- the justified trust methodology helps conduct a self-review of your tax control framework for GST purposes before the start of an initial or refresh review
- to undertake data and transaction testing to ensure your business systems are creating, capturing and correctly reporting GST.
GST analytical tool
The GST analytical tool (GAT) is one of the tools we use to have greater assurance you are paying the right amount of GST.
The GAT helps us to:
- understand the reasons for the key differences arising between accounting and GST figures
- verify these differences with objective evidence if possible.
The GAT isn't intended for use if you are a taxpayer with predominantly input taxed supplies.
The GST analytical tool FAQ and Top 100 GAT example will help you when considering the application of the GAT.
Using an independent third-party advisor for data testing
You may be considering engaging the services of an independent third-party advisor to undertake data testing for a notified top 100 GST assurance review.
Our Guide to independent data testing by third-party advisers is available to give you practical guidance on:
- our expectations
- the conditions that the third-party adviser must meet to undertake the independent data testing.
This is so we can rely on the independent data testing in a GST assurance review. Make sure you speak with us before engaging an independent third party advisor for data testing.
Top 100 Findings report
We publish our Findings report – Top 100 income tax and GST assurance programs annually. The report covers our key findings from income tax and GST assurance reviews completed in the previous year.
Our findings will help you understand how we apply the justified trust methodology to:
- obtain greater assurance that top 100 taxpayers are paying the right amount of income tax or GST
- identify areas of tax risk for further action.
More information
For more information about the Top 100 GST assurance program, email Top100@ato.gov.au.