Selling taxi licences and plates

Terms we use When we say sale, we are referring to the GST term supply.

The sale of a business, including taxi plates and licences, is GST-free if the sale is of a going concern.

What is a sale of a going concern?

The sale of a going concern is where:

• all of the things necessary for the continued operation of the business are supplied to the buyer, and
• the supplier carries on the business until the day it is sold.

When is a sale GST-free?

GST is not payable on the sale if the following requirements are met:

• the sale is for consideration
• the purchaser is registered or required to be registered for GST, and
• both parties agree in writing that the sale is of a going concern.

Example

Sale of taxi business

You are an owner/driver and decide to sell your taxi business, which is made up of a taxi licence, motor vehicle and meter. The sale includes all things necessary to continue operating the business, including the licence, the motor vehicle and the meter. You continue to operate the business until the buyer takes over. This is a sale of a going concern.

If the licence, the motor vehicle or meter is sold on its own, it is not a sale of a going concern as all things necessary to continue operating the business have not been supplied.

Example

Sale of taxi licence/plate

You own a taxi licence which is leased out. You sell the taxi licence to a third party with the original lessee intact. The activity of leasing a taxi plate is an enterprise. As the sale will include all things necessary for an enterprise to continue to operate, it will be a sale of a going concern.

The sale of a taxi licence to the lessee of the licence, or the sale of the taxi licence to a third party without a lease intact, would not be a sale of a going concern.

More information

For more information refer to:

• GST for small business (NAT 3014)
• Goods and Services Tax Ruling GSTR 2002/5 - when is a supply of a going concern GST-free?

For general information or a copy of our publications:

• phone 13 28 66
   
• write to us at
  Australian Taxation Office
  PO Box 3524
  ALBURY  NSW  2640, or
   
• email GSTmail@ato.gov.au

If you do not speak English well and want to talk to a tax officer, phone the Translating and Interpreting Service on 13 14 50 for help with your call.

If you have a hearing or speech impairment and have access to appropriate TTY or modem equipment, phone 13 36 77. If you do not have access to TTY or modem equipment, phone the Speech to Speech Relay Service on 1300 555 727.