ATO’s Streamlined Assurance Review *update*

The ATO has released two important communications recently that affect larger businesses and their approach to Streamlined Assurance Review’s.

  1. Recommencing streamlined assurance reviews of Australia’s top 1,000 businesses; and
  2. Released the GST Governance, Data Testing and Transaction Testing Guide.

It has advised that approximately 30 of Australia’s top 1,000 businesses are in the process of being notified that they will be the beneficiaries of a Streamlined Assurance Review commencing in August 2020.

Meanwhile, the newly released GST Governance, Data Testing and Transaction Testing Guide supplements the tax governance and risk management guide originally released in 2018.

The ATO is notifying 30 of Australia’s top 1,000 businesses that they will be the beneficiaries of a Streamlined Assurance Review commencing in August 2020.

Tax Risk Management

What is the purpose of ATO’s Streamlined Assurance Reviews?

In terms of the reviews, the ATO is seeking assurance that:

  • Appropriate tax risk and governance frameworks exist and are applied in practice;
  • None of the tax risks the ATO has flagged to the market are present;
  • The tax outcomes of a typical, new or large transactions are appropriate;
  • Businesses can explain, to the ATO’s satisfaction, the various streams of economic activity and how they are treated for tax; and
  • The above applies to all taxes, including state based payroll tax.

Businesses must be able to explain, to the ATO’s satisfaction, the various streams of economic activity and how they are treated for all taxes (including state based payroll tax).

The GST Governance, Data Testing and Transaction Testing Guide

The GST governance testing guide (which supplements the tax governance and risk management guide originally released in 2018) is a very useful guide for business that sets out:

  • The ATO approach to rating businesses;
  • The essential features of a tax control framework;
  • The approach to reviewing GST governance; and
  • A practical guide to self-review governance.

The release of this Guide, whilst very helpful for conducting a self-review, raises the bar for Top 1,000 businesses in terms of what the ATO expects of them.

Businesses should be asking themselves these (scroll to Governance Review) questions.  If the answers to some of the questions are “no” or “I don’t know”, you should seriously consider carrying out a self-review, or, at a minimum, a tax governance gap analysis.

We at Specialist Taxes Group are able to assist with all aspects of a self, or ATO, review, documentation creation and/or improvement, and process review and improvement.

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