Do I have to pay GST to buy or sell a business?

Posted by James Price | JPAbusiness on 04-Nov-2020 02:00:00

When working with clients who are either buying or selling businesses, we’re often asked: ‘Will I have to pay GST?’

The short answer, according to the Australian Tax Office (ATO), is:

No GST is payable on the sale of a going concern if certain conditions are met. (A ‘going concern’ is a business that is operating and making a profit.) However, as the seller, you may be able to claim input tax credits for GST you paid on expenses relating to the sale.

Of course, it’s never as simple as one paragraph when it comes to tax, so we’ve asked our business analyst Shirley Jin, who is also a CPA, to clarify those ‘certain conditions’ mentioned, and when you can and can’t claim input tax credits for GST paid on sale expenses.

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Topics: Buying a business, business advice, selling a business, Business advisor, James Price, JPAbusiness, Parramatta, taxation, GST, Central West NSW, business sale, business sale transaction advisor, tax advice

How do earnouts and contingency payments work? [video]

Posted by James Price | JPAbusiness on 02-Sep-2020 02:00:00

If you are considering selling a business at the larger end of the SME market, with a longevity of orders and forward earnings, it’s important to consider the concept of earnouts and contingency payments, because it will come up from interested parties.

It’s also important to recognise that earnouts as part of the purchase price have capital gains tax implications, so expert advice is essential.

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Topics: Buying a business, Capital gains tax, business advice, selling a business, Business advisor, James Price, seller earnouts, JPAbusiness, Parramatta, contingency payment, Central West NSW, transaction advice, business sale transaction advisor

 
Disclaimer: The information contained in this blog is general in nature and should not be taken as personal, professional advice. Readers should make their own inquiries and obtain independent, professional advice before making any decisions, taking any action or relying on any information in this blog. 
 
 

 

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