ATO Top 1,000 GST analytical and data expectations

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The ATO’s GST Analytical Tool (‘GAT’) and data testing has been designed to achieve high assurance in GST governance.

As part of the ATO’s continuation of activities that promote GST compliance, the ATO has reminded large businesses of the importance of using more sophisticated analytical tools to provide assurance that your business is correctly reporting GST.

These two tools—the GAT and data and transaction testing— aid taxpayers completing their combined assurance reviews (‘CARs’) and are a key tool in fourth area of the ATO’s ‘Justified Trust’ methodology, which focuses on understanding why the accounting and tax results vary.

For taxpayers seeking an overall ‘high assurance’ rating in GST, this result must also be achieved in the GAT / data testing.

How does GAT work in practice?

For businesses not predominantly input taxed, the GAT is a requirement of Top 1,000 GST assurance reviews.

The GAT uses a standard method statement applying a 'top-down' approach to identify and understand variances between accounting figures reported in audited financial statements and GST reported on the BAS.

The primary benefits of the GAT are:

  • Assurance enhancement: The ATO uses the GAT to ensure that businesses pay the correct amount of GST.
  • Insight generation: By analysing revenue and expense components, the GAT provides valuable insights into a company’s GST profile and the key drivers of GST outcomes.

Independent data testing

Data testing is utilised by the ATO in situations where your business makes predominately input taxed supplies. By conducting your own independent data testing, your business is provided a means review the tax control framework for GST purposes and ensures the business is correctly reporting GST.

The primary benefits of data testing are:

  • Insight into your tax operating model
    • Ongoing data testing provides insights into your tax operating model, including resourcing, processes, and technology.
    • Helps identify potential systems or process gaps to prevent GST control breakdowns proactively.
  • Objective evidence for justified trust
    • Data testing generates complete and defensible objective evidence that your business’s systems, processes, and controls align with the ATO’s expectations under the GST assurance programs.
    • Demonstrates your commitment to achieving a Green Stage 3 assessment and building justified trust with the ATO.

We’re here to help

Please get in touch with Grant Thornton’s team of Indirect Tax specialists to further understand these tools or find out more about how these tools can aid your business.

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