Sam Mohammad
Sam Mohammad
Partner

On 16 February 2022, the Australian Taxation Office (“ATO”) published the Top 100 GST program: Future GST engagement after initial GST assurance review.

This latest publication seeks to provide guidance on what Top 100 taxpayers can expect from the ATO in relation to its future engagement approach as part of the existing Top 100 GST assurance program On 16 February 2022, the Australian Taxation Office (“ATO”) published the Top 100 GST program: Future GST engagement after initial GST assurance review.once an overall rating was decided.

As expected, the guidance confirms that a tailored approach will be followed, based on the level of risk of non-compliance perceived by the ATO and the ATO’s overall risk rating. As summarised in the table below, taxpayers with an overall high assurance rating can expect (subject to exceptions) to see ATO only once every four (4) years, whilst taxpayers with a low assurance rating can be assured of frequent and close attentions.

Approach for Top 100 taxpayers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Approach for Annual Compliance Arrangement (“ACA”) taxpayers

The ATO is proposing to revert to an annual ACA review for top 100 ACA taxpayers who have reached an overall high or medium level of assurance. In accordance with the ACA framework:

  • The ATO will address the disclosures made and will take steps to resolve any tax risks or issues placed in the Issues Register that are yet to be finalised; and
  • Taxpayers are required to make disclosures of:
  • Significant or new transactions;
  • Any changes in tax treatments or positions that have previously been assured;
  • Any new tax risks flagged to the market;
  • Any changes to various streams of economic activity and how they treated for GST purposes;
  • Any changes to the design of the tax governance framework; and
  • Any other matters requiring disclosure under a specific taxpayer’s ACA terms of arrangement.

What’s next for Top 100 taxpayers?

The publication provides further support and incentive for taxpayers to strive for the highest assurance rating.  While this publication is specifically aimed at Top 100 taxpayers, we expect the ATO to apply the same logic to those taxpayers in the Top 1000 and Next 5000 review programs.

Putting in the hard work upfront, including:

  • Implementing a well-designed, fit for purpose tax risk management framework
  • Having an independent gap analysis reviewed performed of the better practice suggested by the ATO in its Tax Risk Management and Review Guide (dated 18 April 2018) and a taxpayer’s tax risk management framework
  • Periodically testing that the GST controls are designed correctly and operate as intended
  • Having a plan that is operationalised to regularly perform data analytics and transaction testing in accordance with the ATO’s Data and Transaction Testing Guide (dated 15 July 2020)

not only provides confidence to the wider community (and the ATO) that a taxpayer is paying the right amount of net GST, but will ensure less frequent and detailed scrutiny from the ATO.

For more information

If you require further information, please reach out to your local RSM office. 

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