What is a going concern for GST purposes?
A “going concern” is an Australian Tax Office (“ATO”) invention that allows the sale of a business to be a GST-free transaction. It is always highly desirable to both buyer and seller in a sale of business – it means no GST, and it gives certainty to both parties as to what they are paying and what they are receiving.
Does GST apply to Goodwill?
GST It is a supply of the premises & goodwill for consideration (a part of the $X): s 9-5(a). It is in the furtherance of their enterprise of [enterprise] as termination is included in carrying on their enterprise: s 195-1 (s 9-5(b)). OR [However, GST-free supplies are not taxable supplies.
What does it mean if a business is sold as a going concern?
Firstly, selling a business as a going concern means that all employment contracts or contracts outsourcing certain functions of the business will be transferred under the same conditions from the previous employer/owner to the new employer/owner.
What is the going concern exemption?
The sale of a business as a going concern may be exempt with respect to GST purposes if the payment is made for the sale of the business, the purchaser is registered for GST, you have agreed in writing that the sale is of a going concern and you supply all things necessary for the continued operation of the business.
Is a going concern a taxable supply?
Generally, a sale of a going concern is GST-free if all of the following apply: the sale is for payment. the purchaser is registered or required to be registered for GST. the purchaser and seller have agreed in writing that the sale is of a going concern.
Is a sale and leaseback a going concern?
The sale and leaseback of a commercial building is not a going concern, Mr Wolfers said. This type of transaction has been increasingly popular in recent years as companies offload their property assets but offer them for sale with a leaseback to themselves so they can remain as a tenant in the building.
What are the implications of insolvency for a going concern?
Insolvency will probably mean that your business will cease trading and if you are a limited company go into liquidation. If you are a sole trader or partnership you may go bankrupt and lose your personal assets such as your home.
Is GST payable on the sale of a going concern?
What is a going concern clause?
A going concern is a business that is assumed will meet its financial obligations when they fall due. Hence, a declaration of going concern means that the business has neither the intention nor the need to liquidate or to materially curtail the scale of its operations.
What makes a sale of a going concern GST free?
Generally, a sale of a going concern is GST-free if all of the following apply: the sale is for payment the purchaser is registered or required to be registered for GST the purchaser and seller have agreed in writing that the sale is of a going concern.
What is the implication of GST in India?
Going by the idea and intent behind GST, it has been envisioned to make the Indian tax regime more efficient and attractive. GST is expected to create a wider tax base and diminish the multiple tax regimes and irrational distribution of the taxes amongst the States and Center.
What is at stake in the Australian GST ruling?
At stake will be 1/11 th of the contract price. The clearer the ruling, the less likely the risk of disputes. However, no matter how clear the ruling is, disputes will still occur. Thirdly, the Australian GST is claimed to be world best practice.
What do you need to know about GST invoices?
If you are claiming GST, has the vendor paid it etc. Documentation is the key. You must get the claim in for the correct GST period. If your timing is wrong, penalties will be enforced as an unacceptable tax position. This will result in a penalty of 20%. All invoices must be dated correctly. Everything must coincide.