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New ATO data highlighting the income tax and GST challenges and complexities faced by Australia’s highest-performing businesses could have ramifications for organisations of all sizes.
RSM Australia National Head of Tax Services Sam Mohammad said the ATO’s Top 100 and Top 1000 findings reports released this week covered public and multinational businesses with the highest levels of turnover.
“It’s been almost a decade since the ATO established the Tax Avoidance Taskforce in 2016, putting Australia’s largest public companies under more intense scrutiny with measures like regular assurance reviews,” Mr Mohammad said.
“These latest findings from across the Top 100 and Top 1000 income tax and GST assurance programs reveal that while improvements have been made across these groups, there are still some areas of concern.”
ATO findings highlight tax and GST challenges for Australia’s top businesses
The ATO reported that in 2025, high ratings for GST assurance were achieved by 38 per cent of the Top 100 and 41 per cent of the Top 1000 at their latest reviews.
The new ATO data also revealed the majority (64 per cent) of the Top 100 group achieved a high overall assurance rating for income tax in 2025, up from 59 per cent in 2024. For those in the Top 1000 group, 26 per cent achieved a high assurance rating for income tax at their latest review, with 63 per cent achieving the medium rating.
“While both groups saw stability in levels of assurance for income tax, the top-tier businesses continue to do better, which makes sense considering the resources available to Top 100 businesses, the significant efforts by the ATO to engage with them and the ATO’s long-standing efforts to lift the performance of Top 100 businesses in regards to their tax-related systems, people, processes and technologies,” Mr Mohammad said.
“As these higher expectations continue to yield improvement, the focus is likely to extend more intensely to the next ranks of high-earning businesses and those that may form part of those groups in the future.
“Given the Top 100 and Top 1000 groups reflect Australia’s largest businesses, they are generally reflective of our broader economy in terms of the types of businesses and sectors performing well, and thus may change given shifts towards technology and service-based businesses in the future.”
Assurance ratings, sector trends, and key risks shaping future compliance
From a sector perspective, the Top 100 ATO data suggested a higher proportion of businesses within the financial services segment had high overall assurance ratings at their last income tax review, as opposed to the manufacturing, construction and agriculture segment which recorded the lowest proportion of such.
Amongst the Top 1000’s four industry groupings, the manufacturing, construction and agriculture group recorded the joint highest levels of income tax low assurance at first review, however this group also recorded the highest levels of income tax high assurance at their latest reviews.
The ATO was allocated funding for expansion and extension of the Tax Avoidance Taskforce as part of the 2025-26 Federal Budget.
“Looking forward, I would suggest that the areas of continued focus will move away from an initial emphasis on documentation of tax policies towards ensuring businesses have both controls and regular testing for those controls to minimise errors and risks across income tax and GST,” Mr Mohammad said.
“For any business, but especially those high-growth businesses likely to come under additional scrutiny, making sure you are designing and testing controls is critical.
“For example, as part of preparing the monthly business activity statement, large businesses will have a range of reconciliations, transaction testing and other controls in place to ensure the lodgement is correct. The ATO expects that large businesses will regularly undertake testing of these controls to ensure no errors are made in regards to the lodgement and any payment of tax. If there are any major errors identified during this control testing, these need to be escalated to the Board and improvements to the processes and controls made to refine and update those processes.”
As in previous years, the ATO highlighted key areas of concern and focus across the Top 100, including transfer pricing and related party sales.
“For these issues to be the most prevalent across our larger businesses, it’s likely these are the same areas of risk and error across the full business spectrum, especially for those newer or fast-growing businesses that might not have sophisticated systems and processes yet in place,” Mr Mohammad said.
“As our larger businesses increasingly improve their assurance ratings, it’s highly likely that attention will turn towards those entities still coming up in the turnover ranks, including larger private companies and high net worth individuals with a varying range of risk profiles.
“It’s imperative that any business that currently has exposure to international tax systems and offshore activities, or plans to in the future, understands their reporting obligations or risk falling foul of the ATO.
“In terms of international tax and transfer pricing, this means being aware of changes in international tax law and the latest developments to address the continued Base Erosion and Profit Shifting (BEPS) initiatives including the Pillar 2 “global minimum tax” framework and Public Country by Country Reporting.
“The “debt deduction creation rules” – which can deny interest deductions relating to certain related party debt – are also an area of uncertainty, particularly regarding the extent to which taxpayers have to trace the original purpose of their debt financing, even where it has been on foot for some time.”
FOR MORE INFORMATION
If you would like to learn more about the topics discussed in this article, please contact your local RSM office.
