In brief
In September 2025, the Australian Taxation Office (ATO) released its latest Findings Report on the income tax and goods and services tax (GST) assurance reviews conducted for Australia’s Top 100 taxpayers. The data in the 2025 Findings Report covers tax assurance reviews finalised in the 12 months ended 30 June 2025.
This Findings Report outlines how the ATO assesses whether Australia’s largest public and multinational businesses are paying the correct amount of income tax and GST, and highlights the increasing focus on real-time engagement, improved tax governance, and the benefits of achieving high assurance ratings. Levels of tax compliance continue to trend upwards with 83% of Top 100 taxpayers now holding a medium or high overall assurance rating for income tax and 97% for GST.
While the direction of travel is positive, the ATO flags a number of recurring risk areas – particularly transfer pricing, related-party financing, GST product classification and the robustness of tax control frameworks. High-assurance taxpayers will move to lighter-touch, ‘real-time’ engagement. Those still sitting at medium or low assurance can expect more intensive reviews until gaps are closed.
In detail
The Top 100 population covers public and multinational groups and APRA-regulated superannuation funds that together:
- Generate roughly 42% of all corporate income tax collections (A$59.2bn in FY23), and
- Remit around 13% of national GST (A$10.3bn in FY24).
Key statistics from the Top 100 reviews the ATO has undertaken in the year to 30 June 2025 include:
- Overall assurance ratings
| High | Medium | Low | Not yet rated | |
| Income tax | 64% | 19% | 13% | 4% |
| GST | 38% | 59% | 2% | 1% |
- Governance: 41% of groups now demonstrate their income tax controls are operating effectively through achieving a Stage 3 rating. In comparison, only 12% have reached a Stage 3 rating for GST. Despite this, 58% of the Top 100 GST reporters have obtained either a Stage 2 or Stage 3 GST governance rating. The remaining 42% of these reporters are still sitting at a Stage 1 rating.
Areas attracting the ATO’s attention
The ATO’s latest Findings Report on the Top 100 population has identified several areas that attract close scrutiny. These are summarised below.
Income tax hot-spots
As part of the ATO’s Top 100 assurance reviews, it checks on an annual basis, the accuracy and completeness of disclosures made in tax returns, accompanying schedules (including the reportable tax position (RTP) Schedule), country-by-country (CBC) reporting statements and financial statements.
Although the ATO has observed that over time many taxpayers who have previously been engaged in high-risk arrangements now have either: no new tax risks flagged to market, fall in the low risk or white zone of ATO practical compliance guidance, or have been given high assurance, the following areas are examples of areas that are still of concern for others:
- Transfer pricing: Mischaracterisation or under-pricing of cross-border dealings, especially marketing/procurement hubs, related-party loans and digital distribution models.
- Related-party financing: One of the largest assurance areas for the Top 100, PCG 2017/4 risk zones continue to drive queries around interest rates, guarantee fees and hybrid instruments.
- Structured arrangements: Schemes designed to shift profits or avoid withholding tax (e.g. IP migration, ‘inversion’ or ‘top-hat’ restructures).
- Capital allowances and R&D: Self-assessed effective lives, project pools, apportionment of overheads and substantiation of R&D nexus.
- Hybrid mismatch: A common reason the ATO sees as contributing to medium or low assurance ratings continues to be a lack of evidence or any substantial effort being made to comply with obligations in respect of the hybrid mismatch rules, in particular, the imported hybrid mismatch rule.
- Thin capitalisation: The new thin capitalisation and debt deduction creation rules will be a key focus area in upcoming reviews. The ATO expect taxpayers to implement strong processes to deal with the new thin capitalisation provisions, including appropriate consideration of the matters set out in its guidance products.
GST hot-spots
- GST governance: The ATO has observed that incorrect reporting of GST obligations often occurs where there is poor governance (i.e. there is a breakdown in the processes or systems used to capture, collate, report, and reconcile the data determining GST obligations, or when inadequate controls exist to address the application of GST special rules, such as the reverse charge provisions, financial acquisition threshold, and input tax credit estimators).
- Correct reporting errors: The most common errors relate to incorrect input tax credit claims on transaction costs relating to IPO, M&A or similar activities, employee entertainment expenses, as well as incorrect processing of manual transactions, incorrect application of the reverse charge rules, or errors with respect to recipient created tax invoices (RCTIs), over-claimed input tax credits, under-reported output tax and failure to apply reverse-charge rules on cross-border services.
- GST product classification: Incorrectly classifying food and health products as GST-free. These issues were attributed to GST governance gaps, lack of regular reviews of product master data, misinterpretation of GST exemptions and reliance on suppliers GST classification of products and not undertaking their own due diligence.
- Financial services and insurance: The ATO has observed and is concerned about the following:
- the use of high-risk apportionment practices where they do reflect the relationship between costs incurred and supplies made.
- the interpretation of ‘facilitation’ and ‘arranging’ in the reduced input tax credit regulations being applied more broadly than intended.
- errors in decreasing adjustments claimed in the general insurance industry as well as remediation payments.
- invalid RCTI agreements or the supplier is unregistered at the time the RCTI was issued.
- International GST risk: The focus is on taxpayers in the digital economy that have related offshore entities which make supplies to Australian customers and ensuring that they are remitting the correct amount of GST, including having the required data to support the position that a customer is a registered Australian business which means that no GST liability arises.
- Real-property sector: The ATO’s focus remains on the eligibility and application of the margin scheme, GST treatment of build-to-rent activities, including changes in intended use, timing and calculation of Division 129 and 135 adjustments for going concern acquisitions, apportionment methodologies for mixed use developments, inter-group and related party arrangements and for retirement villages, the characterisation of supplies made to residents and apportionment of costs.
- GST analytical tool (GAT): The ATO observes that most GAT calculations have a small overall variance, but the key difference between a stage 3 and stage 2 rating is how well those adjustments can be explained, the quantum of overall unexplained variance and the objective evidence supporting the adjustments.
The tailored assurance program – what to expect next
The ATO has been applying the justified trust approach to the Top 100 population since 2016. The following table is a summary of the likely approach taken by the ATO after an assurance rating is given to a taxpayer and the practical implications of that assessment.
| ATO rating | Engagement approach | Practical implications |
| High assurance | ‘Monitoring & maintenance’ for next three years then fourth-year refresh review. Requirement to make ongoing disclosures in ‘real-time’ with respect to significant new transactions and material business changes. Detailed enquiries made on an ‘exceptions basis’ strictly to verify the tax outcomes from material new transactions, or changes to the business. |
No further ATO review (including assurance or audit activity) for the transaction, tax risks flagged to market or specific tax risks for the income year reviewed, other than in exceptional circumstances. Reduced compliance costs. Top 100 groups will need to be proactive through pre-lodgment engagement and providing evidence in a timely manner. |
| Medium assurance | Follow-up reviews are targeted at unassured areas (often governance design gaps or specific transactions). | Need to close identified gaps – e.g. independent control testing, better transfer-pricing evidence, product master data reviews. |
| Low assurance | Annual justified trust reviews and, where necessary, formal audits. | Increased compliance costs through intensive information requests. Potential for penalties and amended assessments if gaps are not remediated. |
It is clear the ATO is shifting its focus to real-time reviews, aiming to assess transactions and business changes as they occur, rather than retrospectively. Over 90% of Top 100 taxpayers now have current-year justified trust reviews underway and legacy years are being cleared. The ATO anticipate more than 80% of taxpayers will have no past year justified trust reviews by the end of 2025. However, a small number of these taxpayers may have other investigations in relation to specific matters, including audits.
From a GST perspective, from FY 2025, large GST reporters that have received a GST assurance rating must lodge a Supplementary Annual GST Return (SAGR) which is an annual statement covering GST governance changes, GAT results, material uncertain GST positions and significant GST errors or input tax credits from past periods. The ATO will use these disclosures to conduct more targeted and efficient reviews and may decide that a GST assurance review is unnecessary in some cases. This is expected when:
- a taxpayer has an overall medium or high GST assurance rating and a Stage 2 or 3 GST governance rating
- previous recommendations have been properly addressed, and
- the information assures the ATO that GST governance investment continues and GST is correctly reported.
Taxpayers meeting these criteria may benefit from less intensive or no GST assurance reviews.
The ATO has been consulting on proposed changes to its Top 100 GST assurance program for high assurance GST reporters following the introduction of the SAGR. Under the proposed changes, the ATO intends to transition the GST refresh reviews for high assurance reporters who prepare their own GAT prior to lodgment of the SAGR to an assurance check-in every 4 years. The assurance check-in will focus on the completed independent tax control testing reports, actions taken to address recommendations, the completed GAT as well as new or significant transactions or risks not assessed in prior GST assurance reviews. Importantly, Top 100 taxpayers who received a medium or low GST assurance rating, as well as taxpayers who make predominantly input taxed supplies who are exempt from the GAT will not be eligible for the assurance check-in.
The takeaway
The 2025 Findings Report for the Top 100 confirms the ATO’s confidence in the large-market tax system and demonstrates its resolve to encourage and incentivise all Top 100 taxpayers to attain high assurance. Boards and finance/tax teams should:
- Validate governance: Ensure tax control frameworks are fully documented, independently tested and cover both income tax and GST.
- Pressure-test risk areas: Revisit transfer-pricing files, related-party financing terms, GST product codes and apportionment models against current ATO guidance and practical compliance guidelines.
- Embed real-time processes: Adopt the ATO’s pre-lodgment disclosure protocols; be ready to evidence new transactions and business model changes as they occur.
- Leverage the benefits: High assurance unlocks lighter touch engagement, faster certainty and lower compliance costs. For groups still at medium or low assurance, targeted remediation plans can deliver tangible savings.
Our team is already working with clients on tailored ‘justified trust health checks’ across both income tax and GST. Please contact your PwC tax adviser if you would like to discuss how the Findings Report may impact your organisation or to benchmark your current assurance position.
Contact us
Sarah Saville
Partner, Tax Reporting and Innovation, PwC Australia
Mark Simpson
Partner, Tax, PwC Australia
Matthew Strauch
Partner, Tax Reporting and Innovation, PwC Australia
Chris Vanderkley
Special Counsel, PwC Australia
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