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ATO tightens GST assurance on top 1,000 companies

Tax

An analytical tool cross-checks BAS against audit outcomes to ensure the correct amount is paid.

By Josh Needs 11 minute read

The ATO is tightening its GST assurance on the top 1,000 large public and multinational companies by introducing a compulsory measure called GAT, or GST analytical tool. 

ATO assistant commissioner Megan Croaker said businesses seemed to have understood the additional tool and had made only a few requests for assistance. 

“Pleasingly, clients are providing near complete GAT templates, with some assistance needed from us on more complex areas such as expense variances, timing difference and provision of objective evidence to support variances,” said Ms Croaker. 

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The tax office said GAT would be used to analyse variances between BAS outcomes and the audited financial statement accounting outcomes. 

It said taxpayers might need help getting evidence to support the information in GAT where it could not be substantiated in financial statements.

Ms Croaker said it was vital businesses accurately completed GAT templates with accurate evidence to achieve a positive assurance rating. 

“It’s important to remember that to achieve a high assurance rating, we require objective evidence to support the GAT figures and adjustments,” she said. 

“We encourage tax teams to engage with their finance teams when completing this aspect of the GAT, as their knowledge of these issues will greatly assist with the GAT workings.” 

She said implementing GAT had equipped the ATO to better understand the transactions underpinning a business’s economic activities.

“The GAT has streamlined our assurance review process and helped identify where we can work with clients on improving their GST assurance outcomes,” said Ms Croaker. 

The ATO said industries that were currently predominantly input-taxed were excluded from applying the current GAT because the tool was inappropriate. 

“The four key steps to the GAT are grouping variances, non-GST bearing items (permanent differences), balance sheet and cash flow items (temporary differences), and other adjustments (offsetting items/industry specific),” said the ATO.

The increased focus on improving GST assurance outcomes at the top end of town follows the ATO – alongside the AFP – acting against more than 53,000 people and preventing more than almost $2.5 billion in wrongful refunds due to GST fraud.

Josh Needs

Josh Needs

AUTHOR

Josh Needs is a journalist at Accountants Daily and SMSF Adviser, which are the leading sources of news, strategy, and educational content for professionals in the accounting and SMSF sectors.

Josh studied journalism at the University of NSW and previously wrote news, feature articles and video reviews for Unsealed 4x4, a specialist offroad motoring website. Since joining the Momentum Media Team in 2022, Josh has written for Accountants Daily and SMSF Adviser.

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