GST and Going Concerns: by Anthony Miller

GST and Going Concerns – By Anthony Miller Principal Lawyer

On any commercial transaction the question of whether the transaction is a going concern for GST purposes is always raised and considered. Having to come up with that extra 10% on the settlement date can sometimes be a deal-breaker and parties to the transaction often do what they can to invoke the going concern exemption. The ATO’s GSTR 2002/5 as updated provides the required guidance and confirms that the supply of a going concern will be GST free where:-

  1. the supply is for a consideration;
  2. the recipient is registered or required to be registered for GST purposes; and
  3. the supplier and the recipient agree in writing that the supply is of a going concern.

GST and Going Concerns – To be classed as a going concern the enterprise must be continued until the settlement date. The implications of incorrectly labelling a transaction a GST free going concern can be severe, particularly for the Seller who may be required to pay 1/11th of the settlement amount to the ATO as well as further penalties.

If you’re interested, the full ruling can be found here:-

For further information, please contact Anthony Miller on 07 5444 4750.

Located on the Sunshine Coast, Miller Sockhill Lawyers regularly advise clients on commercial law matters. Contact us today.

GST and Going Concerns