‘Clear guidance, detail’: CA ANZ backs ATO in Top 100 GST program improvements
Following proposed changes to be made by the Tax Office to its Top 100 GST program, CA ANZ has rallied its support behind the refreshed approach.
CA ANZ is welcoming the ATO’s initiative to streamline GST reviews for the Top 100 taxpayers and provide meaningful incentives for taxpayers with high assurance ratings.
As the ATO has proposed to make changes to its Top 100 GST program following the introduction of the supplementary annual GST return (SAGR), the professional accounting body has weighed in on its suggestions to ensure the changes are delivered as effectively as possible.
Susan Franks, CA ANZ Australia leader of tax, superannuation and financial services, said the body appreciated the opportunity to provide feedback and welcomed further engagement with the Tax Office as the revised program was developed and implemented.
“We support efforts to reduce compliance burdens for organisations that demonstrate strong tax governance and controls,” Franks said.
“The proposed changes to the Top 100 GST program to check-ins every four years represent positive steps towards a more efficient, tailored and collaborative compliance environment. Clear and practical guidance will be essential to ensure the success of the new approach and to support ongoing high levels of GST assurance among Australia’s largest taxpayers.”
In its submission to the ATO, CA ANZ noted it wanted changes to the areas of exclusion of input taxed reporters, insurance taxpayers, guidance on tax control testing expectations, definition of significant business or system change, guidance on material tax risk and interaction with special GST reviews.
The body said it requested the Commissioner to give further consideration regarding the exclusion of input taxed reporters from the revised program purely on the basis that those taxpayers did not prepare the GST analytical tool (GAT) and the approach only applied to those in the top 100 who had achieved high assurance.
CA ANZ said that according to the results in the Top 100 income tax and GST assurance report, 14 out of 15 taxpayers in the financial services industry had achieved high assurance status.
“This demonstrates that taxpayers in this sector are working hard to maintain strong GST controls and assurance, even without the use of the GAT and that the ATO has been able to gain high assurance that these taxpayers are correctly reporting the right amount of GST,” Franks said.
“In light of these efforts, we believe in cases where these entities have demonstrated high assurance through alternative means, it is appropriate to consider their continued eligibility for the proposed check-in program.”
In addition to this, the body recommended that taxpayers should have the option of “opting in” to the “assurance check-in” as a minimum.
In terms of insurance taxpayers, the body noted that due to inherent complexity with undertaking the GAT in the general insurance industry, based on the proposed approach of the ATO, these taxpayers would not be able to take advantage of the reduced ATO focus.
CA ANZ said it requested further consideration on how these taxpayers could take advantage of the proposed approach.
The submission also made note that “it would be helpful for the ATO to provide clear and updated guidance on its expectations for tax control testing, particularly in relation to engagement with the ATO.”
“With the increased reliance on independence tax control testing, it would also be helpful for the ATO to clarify whether annual control testing reports need to be submitted with the SAGR or simply made available for review if requested as part of the four-year check-in.”
“Clear guidance on the process and timing for providing these reports may help taxpayers understand their obligations and ensure a smooth transition to the new approach, while also supporting greater transparency and disclosure in the assurance process.”
It was also recommended that the ATO provide clear guidance on what parameters constituted a “significant business or system change” for the program, more detailed guidance or examples were given on what constituted “material tax risks” to avoid uncertainty, and further information on how the revised program and the SAGR would interact with any special GST reviews the ATO wished to conduct.
Franks said CA ANZ appreciated the opportunity to provide feedback and would welcome further engagement with the ATO as the revised program was developed and implemented.
“Clear guidance on these points will help taxpayers understand their ongoing compliance obligations and the scope of ATO engagement.”
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