Every year, the ATO publishes a report naming and quantifying the largest taxpayers in the country. It’s a transparency exercise, but it’s also a useful window into where the ATO will spend its resources. This year’s report, covering the 2025 financial year, has a clear theme for high-net-worth individuals and private clients: you’re now the largest group the ATO is watching.

Why private groups are carrying more of the load

The transparency population covers any corporate tax entity with total income of $100 million or more, plus any entity paying the petroleum resource rent tax. There are 4,299 entities in the data population this year, up 189 (4.6%) on last year.

Of that population, Australian private companies now account for 43.8%, ahead of foreign-owned entities (42.4%) and Australian public entities, who trail at 13.8%. In simple terms, high-net-worth individuals and their private groups are no longer the smallest cohort. They’re the biggest by headcount, meaning the ATO will continue to focus its resources on that population.

That said, size by number isn’t the same as size by tax paid. Australian private companies contributed 12.9% of total tax payable in the 2025 financial year, while Australian public entities contributed 48.1% and foreign-owned entities 39.0%. The report also shows just how concentrated tax payable is at the very top: entities with turnover of more than $5 billion made up only 2.2% of the whole population but paid 52.7% of all tax payable, or $46.1 billion. At the other end of the population, although entities with turnover under $250 million made up 54.8% of the population, they only paid 8.4% of the tax. Ultimately that will mean more and more scrutiny by the ATO, particularly in an environment of relatively speaking limited fiscal discipline.

The gap between the size of the privately owned and wealth group population (43.8%) and the tax they pay (12.9%) will affect those groups and their owners in the years to come. The ATO’s compliance activities won’t reduce or go away any time soon. It’s the reason the ATO doesn’t treat every taxpayer the same way, and it’s the reason the ATO’s own compliance approach leans so heavily towards one-to-one engagement with the groups it considers higher or highest risk, rather than one-size-fits-all checks across the whole population.

Where private groups sit in the ATO’s engagement model

The ATO’s own commentary in the report confirms that some of the large companies captured by the transparency data are part of the privately owned and wealthy groups population, and that these groups are examined through the ATO’s private groups tax performance programs. The stated aim of those programs is to improve tax performance and compliance by focusing on the behaviours, risks and tax issues that matter most to privately owned and wealthy groups. For the private groups covered by its Top 500 program, the ATO engages directly with those groups each year to build assurance that the right amount of tax is being paid.

The part of the story the raw numbers don’t tell

The ATO is careful to flag that the transparency figures are a snapshot and not the full picture of all of the entities in the population. Figures are taken from tax returns at a point in time and don’t reflect any later ATO review, audit or settlement activity, and the report doesn’t capture the relationships between related entities, the complexity of a group’s structure, or the reasoning behind the numbers. For instance, groups may have reasonably arguable positions.

The ATO’s broader compliance approach treats a private group as a single economic unit, controlled by an individual, rather than a set of unrelated entities filing separate returns. For groups with related trusts, companies and family members, that means the ATO’s view of ‘your’ tax position is rarely limited to a single tax return.

The report is also candid that nil tax outcomes aren’t automatically a red flag. Nationally, 27% of companies paid no tax this year, the lowest proportion in the twelve years the report has run, with the main reasons being accounting losses (12%), tax losses (4%), offsets (2%) and the use of prior year losses (9%). When the ATO looks at the economic group level rather than the single entity, the nil tax proportion drops further, from 27% to 19%, because another entity in the same group was often the one that paid the tax. It’s a useful reminder for private groups that a loss-making entity in a profitable structure isn’t inherently suspicious, but it’s the kind of risk the ATO’s data mining is built to identify and ask about.

What this means for you

If your group, combined with your associates, controls net wealth exceeding $50 million or has turnover exceeding $10 million, you should assume the ATO already has an almost complete picture of your structure before anyone picks up the phone.

A few practical takeaways from this year’s report:

• Don’t rely on a single company tax return to tell your story. If the ATO is looking at your group as a whole, your explanation for a loss-making year, an unusual transaction or a related-party arrangement needs to make sense at the group level, not just on one tax return.
• Document the commercial reason behind large or one-off transactions before you lodge, not after the ATO asks. The transparency data shows the ATO already expects a wide gap between the number of taxpayers and the tax actually paid, but it’ll want a clear explanation when your group sits on the low-tax side of the tax gap.
• Treat engagement with the ATO as a two-way conversation, not a one-off or reactive audit response. High-net-worth individuals and their private groups that get ahead of a review tend to have a materially easier experience than those who wait to be asked the sensitive questions.

Clients engage HWLE Lawyers to help high-net-worth individuals and their private groups understand where they sit in the ATO’s compliance programs, to prepare for and respond to ATO reviews and audits, and to negotiate outcomes where a dispute has already started. We advise on all aspects of the ATO’s engagement with private groups, from first contact through to settlement. Clients also engage HWLE Lawyers to examine their private group and provide solutions in advance of any ATO encounter to reduce the risk the group will inevitably face once the ATO comes along.

This article was written by Vincent Licciardi, Partner, and Luke Wachinger, Associate.