ATO assurance update: Navigating the unified compliance strategy for Australia’s largest and wealthiest groups

For both large corporate groups and private wealth taxpayers, proactive compliance is no longer just about meeting obligations, it’s about locking in certainty, protecting reputation, and securing a trusted position with the Australian Taxation Office (ATO) for the years ahead.

The ATO is requiring a single, strategic framework, known as Justified Trust, from all significant taxpayers. This unified approach applies equally to multinational corporations in the Top 1,000 program and complex family offices in the Private Wealth (Top 500/Next 5,000) segments.

Achieving Justified Trust is no longer optional; it is the essential strategy for securing a “lighter touch” from the ATO, reducing audit risk, and obtaining greater tax certainty.

The corporate benchmark – Top 1,000 assurance metrics

The ATO’s engagement with the Top 1,000 population (public, multinational, and largest private entities) demonstrates the measurable value of proactive compliance.

Latest ATO Top 1,000 Key Assurance Findings 

The reward: A differentiated approach

For taxpayers in the Top 1,000 who achieve a Medium or High overall assurance rating and have a minimum Stage 2 governance rating, the ATO promises a differentiated assurance approach. This means future engagements will be significantly tailored, focusing primarily on the most recent tax year and new, high-risk transactions.

The private wealth dimension – Top 500 and next 5,000

Through its streamlined assurance reviews in the Next 5,000 program, the ATO has verified the correct reporting of more than $36 billion in significant economic activities, confirming the material nature of this program’s scope.

The Private Wealth programs focus on groups with net wealth over $50 million (Next 5,000) and are characterised by complex structures involving trusts and private companies. The ATO applies the same Justified Trust principles, but with an emphasis on wealth flows and domestic structures.

ATO private groups key findings and hotspots

The unified compliance strategy for all groups

The statistical data from both programs points to a clear, actionable mandate for all significant taxpayers:

1. Elevate tax governance immediately (The stage 2 mandate)

The Tax Risk Management and Governance rating is the gateway to low-risk status. If you are currently at Stage 1 (undocumented/informal controls), you are considered a high priority for review.
Action: Formally document and implement the key controls for both income tax and GST. Ensure there is a separation of duty between the tax return preparer and the reviewer, and that processes are documented for identifying and communicating significant transactions.

2. Proactively address ATO risk areas

You must be able to demonstrate that you have reviewed and appropriately managed any risks flagged by the ATO in public guidance.

Top 1,000 focus: Review the GST Analytical Tool (GAT) reconciliation and ensure robust documentation supports all Transfer Pricing positions, especially related-party financing.
Private wealth focus: Review the documentation and application of all Division 7A agreements and ensure you have contemporaneous valuation evidence for all significant related-party transactions (e.g., property transfers).

3. Embrace transparency and disclosure

The ATO reported raising $4.11 billion in total liabilities from compliance activities last financial year. A significant portion of this included penalties.

Action: If a potential error or under-reporting is identified, a voluntary disclosure made before the ATO notifies you of a review can secure a significant reduction in penalties and is viewed favourably as evidence of cooperative behaviour.

Conclusion

The ATO’s assurance programs now operate as a single, interconnected framework defining what “low risk” means in practice. Effective tax governance is the primary defence against costly and time-consuming compliance engagements.

Need help aligning your governance framework with the ATO’s Justified Trust expectations?
Our tax governance specialists can help design and implement practical control frameworks that stand up to ATO review and deliver lasting assurance.