• GST and floating a company

    You float a company when you list its shares on a public stock exchange.

    When you float a company, special rules apply to claiming GST credits for the GST included in the price of purchases you make to supply the securities.

    See Purchases you make during a flotation.

    Find out more

    GST definitions: GST credits, purchase

    End of find out more

    Securities

    For GST purposes, securities include (among other things):

    • debentures, stocks or bonds a company issues
    • debentures, stocks or bonds a government entity issues or plans to issue
    • documents an individual issues that would be debentures if a body corporate issued them
    • interests in a managed investment scheme.

    Find out more

    Definition of 'securities' in the 'Glossary of terms' in Schedule 1 – GSTR 2002/2External Link Goods and services tax: GST treatment of financial supplies and related supplies and acquisitions

    End of find out more

    Financial supplies

    A supply you make is a financial supply only if it is listed as a financial supply (or an incidental financial supply) in the GST Regulations. The supply of securities is:

    • a financial supply
    • input taxed unless it is GST-free.

    GST and securities you supply

    Supplying securities when you float a company can be any of the following:

    • input taxed if you supply them to Australian residents, for example, if you issue the shares domestically
    • GST-free if you issue them to non-residents outside the indirect tax zone
    • a combination of both if you issue them to Australian residents and to non-residents outside the indirect tax zone.

    You do not include GST in the price of a supply if it is input taxed or GST-free.

    However, the GST treatment of your supply of securities can affect whether you can claim GST credits on purchases you use to supply your securities.

    Attention

    As a general rule, under GST law, you cannot claim GST credits for GST you pay in the price of purchases that relate to making input taxed supplies. However, there are some exceptions to this general rule (see Claiming GST credits).

    End of attention

     

    Find out more

    Claiming GST credits

    GSTR 2006/3External Link Goods and services tax: determining the extent of creditable purpose for providers of financial supplies

    End of find out more

    Purchases you make during a floatation

    If you make purchases relating to floating a company you generally cannot claim a GST credit for the GST you pay on those purchases because they are related to making an input taxed financial supply of securities.

    However, if you do not exceed the financial acquisitions threshold you may still be able to claim a GST credit for the GST you pay on these purchases, even though you use them to make financial supplies.

    If you exceed the financial acquisitions threshold you cannot claim GST credits on purchases you use to make financial supplies, but you may be able to claim a reduced GST credit on those purchases if they are reduced credit acquisitions (see Reduced credit acquisitions).

      Last modified: 24 Jun 2015QC 17325