What documentation is required during an Indirect Tax Review?

An ATO (Australian Taxation Office) indirect tax review typically pertains to the Goods and Services Tax (GST), the Wine Equalisation Tax (WET), the Luxury Car Tax (LCT), and Fuel Tax Credits (FTC). When being reviewed for these indirect taxes, businesses must provide various records and documents to prove their compliance with the relevant tax laws. 

Here’s a general list of documentation and records that may be required during such an review: 

Business Records: 

• Business activity statements (BAS) and any related documents. 
• Accounting records such as ledgers, journals, and trial balances. 
• Invoices issued and received (to verify input tax credits claimed and GST collected). 
• Purchase and sales records. 
• Import and export documentation. 
• Contracts and agreements. 

Bank Records: 

• Bank statements. 
• Loan documents. 

Asset and Inventory Records: 

• Asset purchase records (to verify any input tax credits claimed). 

• Asset registers. 
• Stocktake records. 

Specific Records for FTC: 

• Purchase invoices for fuel. 
• Records showing the use of the fuel (logbooks, mileage records, etc.). 
• Calculations for FTC claims. 

Documentation Specific to LCT & WET: 

• Records of luxury cars or wine sold or leased. 
• Calculation worksheets. 

Other Relevant Records: 

• Employee and wage records (for reviews related to FBT, for instance). 
• Leases and rental agreements. 
• Agreements with contractors or subcontractors. 
• Exemption or concession documentation, if claimed. 

Electronic Records: 

• Backup data if the accounting is done on software. 
• Access to accounting software. 
• Point-of-sale (POS) system records. 

Reconciliation: 

• Reconciliations of BAS/GST return figures to accounting records. 

Evidence of Internal Controls: 

• Documentation of accounting and reporting systems, procedures, and internal controls. 

Communications: 

• Any correspondence or communication with the ATO. 

Additional Documents: 

• Any other documents requested by the reviewer to verify transactions or claims. 

It’s worth noting that businesses are legally obligated to keep certain records for a minimum number of years (generally 5 years for most tax records in Australia). Having well-organised, clear, and easily accessible records can simplify the review process and reduce potential discrepancies. 

If you’re facing a review, consider consulting with a tax professional or accountant to ensure you have all the necessary documentation and to understand your rights and obligations during the review. 

BTG can help.   

BTG International has helped some of the worlds most respected companies prepare for and/or manage Indirect Tax Reviews.  Call us on  1300 650 258, email contact@btgi.com.au or leave your details and we will be in touch.  

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