Tax & Accounting Blog

Justified Trust: Has GST compliance taken us to the tipping point?

Accounting Firms, Blog, Business Practices, Business Practices, Business Tax, Corporations, Events, Indirect Tax, ONESOURCE, Organisations, Our People, Technology, Thomson Reuters & You, Workflow & Processes September 24, 2018

GST Streamline Assurance reviews, the latest addition to the ATO’s whole-of-tax compliance framework, are placing a heavy burden on corporate tax teams.  We look at some of the recent developments and how the industry can be better equipped to deal with this latest wave of compliance changes ahead of the Corporate Tax Association’s GST & Indirect Tax Intensive in October.

Indirect tax is the latest addition to the ATO’s whole-of-tax compliance framework, shoring-up some of the remaining loopholes with the GST Large Business Program’s streamlined assurance reviews for multinationals and large public companies.

While Corporate Australia has embraced the Justified Trust principles – The Board of Taxation reporting recently that there were 142 signatories to the Voluntary Tax Transparency Code, and half of which have published at least one tax transparency report –  there is unprecedented pressure on corporations to do more.

The reality of managing a GST Streamlined Assurance Review amongst the raft of compliance measures already in place, is understandably a cause for concern for corporate taxpayers. The impact of which, according to Paul Suppree, Assistant Director of Corporate Tax Association, has been to “place extra strain on what are already limited corporate tax team resources”.

In a recent survey, CTA members indicated that they are expecting a 20% increase in compliance activity over the next year.  This, according to Suppree means that many are “at a tipping point as to how to manage this expected increased demand from the businesses they support, the ATO and the community more broadly.”

In response to these concerns, the CTA is hosting a GST & Indirect Tax Intensive for Corporate Tax in Melbourne over the 15th and 16th of October. The program will bring together senior ATO officers, leading advisors, and tax technology providers to give technical and practical insights into the challenges and opportunities in the current indirect tax environment. In addition, delegates will be offered “a hands-on experience” with the latest in indirect tax technology and robotic process automation, as Suppree notes, “big data and technology has an important role to play in helping manage this new reality”.

Thomson Reuters, Indirect Tax Technology specialist, Neha Mahindru agrees with this sentiment, “with the fluctuating nature of indirect tax rates, legislative changes to tax and the digital economy, automation has much to offer businesses who still use manual systems to manage GST compliance”. The benefits are many and include saving time, reducing errors and bringing transparency and integrity to tax governance systems and in turn, corporate profiles.

In August, the ATO released additional information for corporate taxpayers on what they need to provide in their GST assurance reviews, with the focus being on information and documents that should be readily available. This includes the organisation’s latest GST reporting structure,  ABN/CAN of each entity and their business activities, BAS preparation process, tax governance and controls documentation, and any tax risks flagged to the market.

However, Mahindru cautions that as with other Justified Trust tax reporting requirements, corporate taxpayers should anticipate an “increased level of detail and shorter timeframes as the program matures”, which will inevitably impact the role of corporate tax teams, placing additional pressure on their capabilities.

For a comprehensive look at what these changes mean to indirect tax professionals, join Neha for our panel discussion: Justified Trust and Indirect Tax, with the ATO’s George Montanez and Jenny Spiliotopoulos and Peter Konidaris from PwC Justified trust and indirect taxes.  And if you’re researching tax technology solutions, see our ONESOURCE Indirect Tax Compliance and Determination software solutions on our website.