• Selling taxi licences and plates

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

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    What is a sale of a going concern?

    The sale of a going concern is where:

    • the sale is for consideration
    • the purchaser is registered or required to be registered for GST
    • both parties agree in writing that the sale is of a going concern.
    • all of the things necessary for the continued operation of the business are supplied to the buyer
    • the supplier carries on the business until the day it is sold.

     

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    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.

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      Last modified: 09 Aug 2016QC 16638