GST Going Concern Compliance Checklist for Business Buyers in Australia
The GST going concern exemption is one of those things every Australian business buyer needs to understand — not because it's complicated, but because missing it is expensive. If you buy a business that qualifies as a going concern and the sale is structured correctly, no GST is payable on the purchase price. If you get it wrong, the seller has to charge 10% GST on top of what you agreed to pay.
On a $400,000 business, that's $40,000. On a $1 million deal, it's $100,000. The good news is the exemption is well-established in Australian tax law (section 38-325 of the GST Act) and the conditions are clear. The bad news is there are four of them, and all four must be satisfied simultaneously.
Most buyers assume the exemption applies automatically and leave it to their solicitor to sort out the contract. That works most of the time — but I've seen deals fall over when the buyer hadn't yet registered for GST, when the contract didn't include the right clause (because someone used an old template), or when the seller had let a key contract lapse before settlement. Any of those breaks the exemption.
This checklist is designed to be worked through before you sign contracts, not the week before settlement. The earlier you check, the more time you have to fix problems without creating panic.
For the full explanation of how each condition works and where buyers typically get caught, read the GST going concern exemption guide. This checklist is the action companion to that article.
The going concern exemption sits in Module 6 of the Playbook — the deal structure and financing module — because how you structure the transaction affects how much you actually pay. A well-structured deal can save you tens of thousands in GST, stamp duty, and tax. For a broader look at deal structuring decisions, the deal structure comparison framework is a useful companion to this checklist.
Before you sign anything, also check your tax due diligence — the going concern exemption is one part of a larger picture that includes CGT, stamp duty, and how you structure ownership of the business going forward.
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