How to Build an Internal Indirect Tax Risk Framework: A Roadmap for CFOs and Finance Managers
Why it matters
Indirect taxes such as GST and Fuel Tax Credits are highly scrutinised by the ATO. Mistakes, even unintentional ones, can trigger reviews, penalties, and reputational damage. A formal Indirect Tax Risk Framework provides CFOs and finance managers with structure and confidence that obligations are being met.
Key Components of a Risk Framework
- Governance and Accountability
– Define who is responsible for tax decisions, reconciliations, and lodgements.
– Ensure tax responsibilities are documented and understood across the business.
- Processes and Controls
– Standardise tax treatments for recurring transactions.
– Implement approval workflows for complex or high-value items.
- Data Integrity
– Regularly reconcile BAS with financial records.
– Use technology to validate invoices, supplier ABNs, and tax codes.
- Internal Reviews
– Conduct periodic health checks to identify risks early.
– Benchmark results against industry peers where possible.
- Training and Awareness
– Equip staff beyond finance (procurement, sales, operations) with knowledge of GST requirements.
– Provide refresher training as legislation changes.
- Continuous Monitoring
– Use ATO guidelines, rulings, and industry alerts to stay current.
– Treat reviews as opportunities to refine processes.
The Benefits
Businesses with strong tax frameworks are:
✔ Less likely to face unexpected ATO adjustments
✔ Better prepared to defend their position in a review
✔ More efficient in managing tax compliance
BTG can help.
BTG International has helped some of the worlds most respected companies prepare for and/or manage an Indirect Tax review. Call us on 1300 650 258, email contact@btgi.com.au or leave your details and we will be in touch.
