The Pros and Cons of GST Grouping
A GST group is a group of two or more associated business entities that operate as a single business for the purposes of GST.
How does it work?
A GST group has a ‘representative member’ that becomes wholly responsible for reporting and paying GST liabilities for the entire group, including preparing and lodging business activity statements (BAS). The representative is then entitled to claim any GST credits for all group entities, as well as liable for any GST that is due to be remitted to the ATO.
What are the advantages and disadvantages of a GST group?
Who is eligible to join a GST Group?
Companies, trusts and partnerships with common ownership or membership may operate as a group. Individuals, or family members of individuals, associated with these entities may also be part of a GST group. However, a GST group can't consist solely of individuals.
One member of the group must be nominated as the representative member. This member must be an Australian resident for tax purposes. Other members don't need to be Australian residents for tax purposes.
What are the requirements to form a group?
In order to form a GST group, each member must:
ESV has assisted many business with assessing the need for a GST group and the actual formation of GST Groups. For further information or advice on GST grouping please contact our office on 02 9283 1666.
Article by Chris Kirkwood