Most business sales in Australia are GST-free as the sale of a going concern. That means no GST is added to the price, but only if five conditions in the GST law are all met. If one is missed, the sale becomes taxable and the seller can be left owing 10% GST to the ATO. This guide explains the conditions, what happens if one fails, and how to protect yourself in the contract.
In short
The phrase is used in two different ways, which is the source of a lot of confusion.
| In a business sale (GST) | In accounting | |
|---|---|---|
| What it means | The whole business is sold in working order, so the buyer can carry on without a break. | An assumption that a business will keep operating for the foreseeable future, usually at least 12 months. |
| Where it matters | Whether GST is charged on the sale price. | How financial statements are prepared and audited. |
| Says anything about profit? | No. A struggling business can still be sold as a going concern. | Yes. Doubt about it signals financial difficulty. |
The rest of this guide is about the GST meaning. A “going concern” label in a sale contract does not tell a buyer anything about how healthy the business is. That is what due diligence is for.
Under the GST Act, the sale of a business is GST-free as a going concern only if all five of these are met.
Enter the agreed price and untick any condition you are not sure about. The checker shows whether GST is likely to apply and how much.
Tick the conditions that apply to your sale. All five must be met for the sale to be GST-free.
Estimate only. It doesn't cover mixed supplies, residential premises or businesses trading across states. Confirm with your accountant before you sign.
The duty base is the price stamp duty is calculated on. Where duty applies, it generally includes any GST charged.
The sale still goes ahead, but it becomes a taxable sale. GST of 10% applies, and the ATO looks to the seller for it.
A Queensland business sells for $600,000. Here is the difference between a sale that qualifies as a going concern and one that does not, where the contract lets the seller add GST.
| Going concern | Not a going concern | |
|---|---|---|
| Price excluding GST | $600,000 | $600,000 |
| GST | $0 | $60,000 |
| Buyer pays at settlement | $600,000 | $660,000 |
| Queensland transfer duty | $20,025 | $22,725 |
| Extra cost to the buyer after GST credit | $0 | $2,700 duty |
If the contract is silent on GST and the sale fails the conditions, the $600,000 is treated as GST-inclusive. The seller owes $54,545 in GST and keeps $545,455.
Duty is calculated differently in each state. See our guides for Queensland, New South Wales, Victoria, Western Australia and South Australia.
If you sell the shares in a company that owns the business, the going concern rules do not apply. A share sale is an input-taxed financial supply, so no GST is charged on it. Your accountant can explain how this affects your GST credits.
Your solicitor and accountant should confirm these before the contract is signed.
More on the steps of a sale: selling a business with Benchmark, selling a business with a lease and selling a business that carries stock.
It is the sale of a whole business in working order, with everything the buyer needs to keep trading. If it meets the five conditions in the GST Act, the sale is GST-free.
Only if it qualifies as the sale of a going concern. The sale must be for payment, the buyer must be registered for GST, both parties must agree in writing, the seller must supply everything needed to run the business, and the seller must keep trading until the day of sale.
GST-free. The seller charges no GST and can still claim GST credits on the costs of selling. Input taxed is different: it applies to financial supplies, such as selling shares in a company.
The seller is liable to the ATO. Whether the seller can recover it from the buyer depends on the contract. Without a clause allowing GST to be added, it comes out of the sale price.
Yes. The buyer must be registered, or required to be registered, at the time of the sale. A buyer can register before settlement. Check their registration on ABN Lookup.
Often, yes, if the buyer can still run the business without them. Leaving out something essential, such as the premises or key equipment, can mean the sale does not qualify.
Possibly. Going concern status only affects GST. Capital gains tax applies to any gain on goodwill and other assets, though small business concessions can reduce or remove it.
No. In a sale, “going concern” is a GST term about the business being sold as an operating whole. It says nothing about profit. Buyers should check the financials in due diligence.
Our brokers structure sales so the going concern conditions are met from the first offer. 50+ specialist brokers in 8 offices across Australia. Confidential and no obligation.
Find a valuer near you: Brisbane, Sydney, Melbourne, Perth, Adelaide, Gold Coast, Sunshine Coast.
This guide is general information, not tax or legal advice. GST outcomes depend on the facts of each sale, so confirm your position with your accountant or solicitor before you sign.
Sources: ATO, selling a going concern; A New Tax System (Goods and Services Tax) Act 1999, section 38-325; ATO, small business CGT concessions; Queensland Revenue Office transfer duty rates. Checked 11 October 2026.
