Australian Tax Office (ATO) - Overview to GST Audits

The Commissioner consistently reminds practioners that the purpose of a good tax system is to provide a "robust revenue base" for the community. This philosophy equally applies the GST regime as it applies to the general taxation system.

The Commissioner's audit strategy
The Tax Office applies "a comprehensive approach to risk identification”. The Commissioner's operational processes generally divide GST audits into audit "territories" along market segments, e.g. the review of micro enterprises and specific audits in relation to property transactions.

Taxpayers facing a GST audit can also no longer expect leniency on the grounds of a lack of knowledge of the GST law. Shortfall penalties of 50% and 75% are now a matter of routine, with well justified defences in recent tax cases falling on deaf ears.

Audit selection methods

GST audit, like other tax audits, are often prompted by tip-offs. On the increase however, is the ATO’s automated selection procedure which uses the ATO’s "Risk Rating Engine" in the analysis of BAS lodgement data against key risk indicators.

Tax Audit Insurance

Clients of our firm have access to the benefits of Tax Audit Insurance. This covers our professional fees incurred from the inception of the audit activity to the completion of the audit process, subject to generous audit cost limits. Please press the link for further information. Please click here for further information.

 

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