Field notes
GST When Buying a Business in NZ: Questions to Ask
GST can materially change the cash required to complete a business purchase. The treatment depends on the parties, the assets, the agreement and whether the transaction qualifies as a going concern, so never rely on a casual assumption.
Questions to ask early
- Is the seller GST registered and what exactly is being sold?
- Is the price stated inclusive or exclusive of GST?
- Could the transaction qualify for zero-rating as a going concern?
- Which assets, stock, deposits or liabilities are included?
- Who is responsible if the agreed GST treatment is later challenged?
Why the agreement matters
GST wording belongs in the sale and purchase agreement, alongside conditions, warranties and completion adjustments. Your accountant should model the cash-flow effect and confirm the tax treatment. Your lawyer should make sure the wording matches the deal structure.
Read current guidance from Inland Revenue, and do not treat an online article or valuation tool as tax advice. OpenBiz can help you understand the commercial numbers; your adviser should confirm the tax outcome before you sign.