| Goods and Services
Tax (GST) is payable on the supply of most goods and services in
Australia (as well as some other specific items). Due to its
complex nature, the tax office often conducts GST Audits to
ensure that taxpayers and business owners are adhering to their
legal obligations and operating fairly within the system.
We have included some brief information below about GST and
GST Audits.
For more detailed or specific information regarding GST
Audits complete
and submit the Express Enquiry form on the top right hand side
of this page and we will contact you to discuss your enquiry
or call us on 1300 QUINNS (1300 784 667) to arrange an
appointment.
Micro-businesses
This year the ATO will:
- Phone and/or visit micro businesses to check the accuracy of
information submitted in 7,100 activities;
- Conduct 600 reviews and audits to deal with GST non-compliance
in property transactions;
- Undertake approximately 780 comprehensive audits of businesses
where the ATO believe there may be serious evasion and fraud;
and
- Check 55,500 refunds to improve GST compliance.
Small-medium Size Enterprises
To improve GST compliance, this year the ATO will:
- Review businesses whose GST management practices have failed to
keep pace with their growth;
- Check that public share floats and real property transactions
have been properly reported; and
- Investigate small to medium enterprises that appear to have
under-reported GST or over-claimed input tax credits.
Large Businesses
a. Refund Policy
The ATO will continue to monitor large GST refunds and undertake
pre- and post- issue verification to ensure that the correct
amounts are claimed.
b. Property and Construction
The ATO continues to look at claims that involve the use of the
GST margin scheme to ensure that:
- Valuations for the GST margin scheme are not excessive and
comply with the law; and
- Stamp duty, construction costs or other expenses are not used to
inflate valuations for acquired property.
The ATO will examine transactions to ensure GST has been
properly accounted for under the GST adjustment provisions such
as:
- Adjustments for changes in credible purpose.
- Adjustment relating to the sale of a going concern and cessation
of business.
c. GST Aggressive Tax Planning
In particular, the ATO is focusing on detecting aggressive tax
planning arrangements designed to avoid or reduce GST payable,
including:
- International arrangements, particularly where businesses
restructure to artificially sever a connection with Australia;
- Financial supply arrangements designed to produce inflated input
tax credit claims; and
- Second-hand goods arrangements that seek to circumvent the
intended operation of the law.
d. Financial supplies
Specific areas that will attract the ATO attention this year
are:
- Supplies of services to associated entities at less than market
value;
- Recovery of GST on costs relating to mergers and acquisitions;
and
- Recovery of GST using a fair and reasonable apportionment
methodology.
e. Integrity of business systems
Some large businesses have failed to keep up to date their
internal corporate governance processes and systems for GST. The
ATO continues to help large businesses address this deficiency.
During the course of audits, the ATO will pay attention to:
- Transactions processed outside of the accounts payable or
accounts receivable systems, classified incorrectly and not
captured in GST control accounts;
- Incorrect GST formula defaults or GST codes;
- Failure to report GST control accounts for reconciliation with
business activity statements;
- Failure to update GST capture and reporting systems when other
business systems are changed;
- Inadequate exception reporting to detect process or system
failure; and
- Failure to recognise an adjustment event - for example, early
payment discounts for customers.
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Our dedicated team can assist you with all your auditing
needs.
Complete
and submit the Express Enquiry form on the top right hand side
of this page and we will contact you to discuss your enquiry
or call us on 1300 QUINNS (1300 784 667) or on +61 2 9223
9166 to arrange an
appointment.
You may also wish to visit our dedicated GST website for more
information
www.gstsolutions.com.au
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