In brief
Building on its October 2024 announcement and the feedback obtained from its pilot program, the Australian Taxation Office (ATO) has now released an updated Supplementary Annual GST Return (SAGR) for 2025. This updated version is accompanied by enhanced instructions and web guidance. The new SAGR will take effect from the 2024–25 financial year (FY 25) and applies to large business taxpayers who receive a GST assurance report with a GST assurance rating on or before 30 June 2024. Affected taxpayers have already been notified regarding this requirement, with the first round of lodgements due on 21 August 2025 for taxpayers with a December year end.
In detail
An overview of the revised SAGR
- Who is required to lodge the SAGR?
- Taxpayers will need to lodge a SAGR for FY 25 and subsequent years if they have obtained a GST assurance rating through specific assurance reviews (i.e., Top 100 GST assurance report, Top 1,000 GST streamlined assurance review, Top 1,000 combined assurance review (CAR) report with a GST assurance rating) on or before 30 June 2024.
- Taxpayers who do not fall into the above category will need to lodge a SAGR starting in the financial year following receipt of a GST assurance report. For example, taxpayers who obtain a GST assurance rating in a report issued before 30 June 2025 but after 30 June 2024 will need to complete a SAGR for the 2025-26 financial year and subsequent years.
- Taxpayers who have not received a GST assurance rating are not required to lodge a SAGR until they obtain one.
The ATO’s updated guidance clarifies that where a taxpayer with a GST assurance rating joins a new GST group, such as through an acquisition, a SAGR must be lodged by the new GST reporting group if they account for 50% or more of the new group’s ‘GST throughput’. ‘GST throughput’ is calculated as the total GST transactions managed by the taxpayer and other acquired entities, determined by the sum of GST on sales (1A), GST on purchases (1B), and deferred GST on imports (7A). - Taxpayers who need to lodge an SAGR for FY 25 were notified by the ATO late last year. The ATO expects formal letters and notices to be issued via email and post four months before the lodgement due date. Importantly, taxpayers with a December year end, who need to lodge an SAGR for FY 25, should expect a notice this month with the return being due on 21 August 2025.
- When is the return due?
The SAGR is generally due within seven months after the financial year-end and does not replace other GST returns. The due dates for the FY 25 SAGR are set out in the table below. Penalties may apply for late submissions, including significantly higher penalties for significant global entities (SGEs).
Due dates for the 2024-25 financial years
Financial Year End |
Due Date |
|---|---|
December 2024 |
21 August 2025 |
January, February, March 2025 |
21 November 2025 |
April, May, June 2025 |
21 February 2026 |
July, August, September 2025 |
21 May 2026 |
October, November 2025 |
21 August 2026 |
- What does the revised return cover?
The revised SAGR has the following eight sections and is made up of 15 questions (previously 12).- Section A: Details of the entity – covers the details of the entity, including the name of the entity, Australian business number (ABN), and the period the return covers.
- Section B: Actions for ATO recommendations, areas of low assurance or red flags – There are now three questions under Section B, an increase from the previous single question. While no new information is being requested, the existing question has been divided into three to enhance clarity and ensure that taxpayers address all aspects in their responses. Specifically, taxpayers are required to disclose any outstanding ATO recommendations, areas of low assurance, or red flags identified in their most recent GST assurance review, as well as in subsequent ATO interactions, and to provide explanations regarding these items.
- Section C: GST Governance – There are now three questions under section C, an increase from two previously. The first question is about material business or system changes and requires an explanation. The second question asks for a self-assessment based on three options: ‘yes – maintained,’ ‘yes – increased,’ or ‘no,’ regarding the taxpayer’s GST governance in relation to the ATO’s GST assurance report rating. The final question requests reasoning to support this self-assessment, considering governance uplifts or material changes.
- Section D: Reconciliation between audited financial statements and Business Activity Statements (BAS) – Section D retains four questions but simplifies the information requested. It asks if the GST Analytical Tool (GAT) reconciliation was conducted, and if so, it requests the effective GST rates on sales, expenses, and the net effective GST rate (previously, only the net effective GST rate was asked). It also seeks comments on the remaining variance, replacing the previous requirement to explain unreconciled amounts. If GAT was not conducted, an explanation is requested.
- Section E: Material uncertain GST positions – Minor structural changes have been made to this section. It requires taxpayers to disclose any material uncertain GST positions taken during the year, including those that contradict ATO guidance, public rulings, private rulings issued to the taxpayer, applicable ATO Taxpayer Alerts, or positions classified as moderate or high risk under an ATO Practical Compliance Guideline.
- Section F: Material GST reporting errors or credits claimed in a later BAS – Minor structural changes have also been made to this section. It requires taxpayers to report any material GST reporting errors, defined as mistakes in calculating the GST net amount on their BAS that impact periods within the four-year review period. The error is considered material if the GST amount is $250,000 or more for a Top 1000 taxpayer, or $500,000 or more for a Top 100 taxpayer. Taxpayers must provide details on the amount, a description of the error, and how it has been rectified prospectively.
It also requires taxpayers to disclose input tax credits (ITC) referable to earlier periods, defined as ITCs claimed in a BAS in the period the return covers that were originally attributable to periods prior to that period and which arise due to a change in the GST treatment of supplies or acquisitions, including changes relating to their creditable purpose under specific Divisions 11 or 70 of the GST Act. - Section G: Declaration and signature – covers the declaration and signature requirements for the Supplementary annual GST return, which includes a confirmation that the information provided is true and correct and must be signed by an authorised person of the entity.
- Section H: How to lodge your SAGR – covers the process for lodging the Supplementary annual GST return, including instructions on how to complete and submit the form via email to the ATO by the specified due date.
A number of enhanced and additional examples and have been provided in the ATOs SAGR 2025 instructions and the ATO web guidance to help. Notably, an example taxpayer SAGR which shows how to complete and answer the return is welcome and valuable guidance.
- What will the ATO do with the information provided in the SAGR?
The information provided by taxpayers in the SAGR will be used to assess the extent to which the ATO has confidence in correct reporting and determine the level of ongoing investment by the taxpayer in GST governance, which in turn will influence the scope and intensity of subsequence GST reviews under its differentiated approach. New examples have been added to the ATO web guidance illustrating what this differentiated approach could look like for a Top 1,000, and a Top 100 taxpayer based on responses provided in the FY 25 SAGR.
The takeaway
The updated SAGR and guidance reflect the ATO’s commitment to its differentiated approach to GST assurance. Taxpayers who demonstrate that their GST governance aligns with the ATO’s expectations will benefit from reduced GST review intensity. This could result in GST not being included in a future CAR, a reduced scope for GST in a future CAR, or a tailored approach that evaluates the taxpayer’s objective evidence supporting their responses in the SAGR.
Now that the final SAGR has been released, and the first round of SAGR lodgements for FY 25 are just around the corner, we recommend the following:
- Taxpayers who need to complete a SAGR for FY 25 and subsequent years should:
- promptly review and action all ATO recommendations in their most recent GST assurance review, including any subsequent interactions
- assess taxypayer eligibility to maintain or increase the GST governance rating from their most recent GST assurance review (especially in the context of system or business changes)
- document any material uncertain GST positions and assess if they require a reasonably arguable position paper or private ruling
- review for any GST reporting errors or claimed input tax credits from previous periods and ensure that there is a documented process to identify errors or credits and prepare documented position papers to support positions undertaken, and
- ensure that they hold objective evidence to support the response provided in the SAGR submitted so that it is readily available should the ATO request it in future GST assurance reviews.
- All taxpayers should complete the GAT on an annual basis (unless the GAT does not apply to you because you make predominantly input taxed supplies) and ensure that objective evidence is held to support the net effective GST rate, including for all adjustments made to arrive at the number.
- Taxpayers who are yet to have a GST assurance review should self-assess their GST governance against the ATOs published guidance to get comfort that it aligns with the ATOs evolving expectations and uplift GST governance if required.
Matthew Strauch
Mark Simpson
Andrew Howe
Shagun Thakur
Mark De Luca
Priyanka Panchal
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