With increased assurance activity under the ATO’s justified trust regime, many taxpayers are increasingly hearing about the GST Analytical Tool (or GAT), and that’s left taxpayers either confused of its application, unprepared or both.
So, what is the GAT and why should taxpayers take note?
What Is the GAT?
In short, the GAT is a tool the ATO uses to obtain greater assurance that taxpayers are paying the right amount of GST. This is the main tool the ATO applies to get comfort around the fourth focus area of its justified trust methodology, which is around understanding the differences between the accounting and GST figures reported by a taxpayer. Using the GAT, the ATO obtains a holistic view of the taxpayer’s business and enables it to get assurance over its economic activity.
…is the main tool the ATO applies to get comfort around the fourth focus area of it's justified trust methodology
Does the GAT apply to all taxpayers?
No, the GAT does not apply to all taxpayers, which may be welcome news for most. The GAT is only a requirement of the Top 100 GST assurance program (except for taxpayers who operate in predominately input-taxed industries). Having said that, the GAT is incorporated into the Top 1000 GST assurance program (or SAR), particularly for taxpayers who primarily make taxable supplies.
How often do I need to calculate the GAT?
As the GAT is used to understand variances between annual audited financials and 12 BASs, the ATO recommends that the GAT be calculated annually.
When using the GAT, the ATO will focus on the GST payable (1A) and Input Tax Credit (1B) amount disclosed on the BAS and undertake the test on a 3-month consecutive period.
I have more questions on the GAT. Is there an article that can help address these?
Absolutely. The ATO has created a useful GST Analytical Tool (GAT) FAQ page, which can be found here. And if you’re after practical assistance with the GAT, please contact BTG today
1The GAT is a tool the ATO uses to obtain greater assurance that taxpayers are paying the right amount of GST.
2The GAT is only a requirement for the Combined Assurance Reviews of the Top 100 and recommended for the Top 1000. Taxpayers who predominately operate in input taxed industries do not have to complete the GAT.
3The ATO recommends that the GAT be calculated annually.
