Private ruling: Creditable acquisition
Date of advice: 27 November 2025
Published: 12 January 2026
Ruling period: XX XXX 20XX to XX XXX 20XX
Date scheme commenced: XX XXX 20XX

Ruling: Q1: Are you making a creditable acquisition under section 11-5 of the GST Act? | A1: Yes.

Relevant facts and circumstances: You are registered for goods and services tax (GST). You have established a business and currently are in a setup pre trading phase with no taxable supplies. All your activities will be taxable supplies once you begin trading. You expect to commence trading in late XXXX or early XXXX. To enable your operations, you will acquire intellectual property and software assets (collectively to be known as 'assets' in this private ruling), from an Australian third-party developer (supplier), which is registered for GST. The purchase price for the assets is XXXX inclusive of GST. The supplier will issue a tax invoice to you. Ownership of the assets will transfer to you upon payment and execution of the transfer deed.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 section 9-5 | A New Tax System (Goods and Services Tax) Act 1999 section 11-5 | A New Tax System (Goods and Services Tax) Act 1999 section 11-15 | A New Tax System (Goods and Services Tax) Act 1999 section 11-20

Reasons for decision: Summary: Section 11-20 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) outlines who is entitled to input tax credits. It explains that you are entitled to the input tax credit for any creditable acquisition that you make. Section 11-5 of the GST Act states: You make a creditable acquisition if: (a) You acquire anything solely or partly for a *creditable purpose; and (b) The supply of the thing to you is a *taxable supply; and (c) You provide, or are liable to provide, *consideration for the supply; and (d) You are *registered, or *required to be registered (* denotes a defined term in section 195-1 of the GST Act.) Each of the requirements in section 11-5 of the GST Act is considered below. | Detailed Reasoning - Paragraph 11-5(a) of the GST Act - creditable purpose: Section 11-15 of the GST Act states: (1) You acquire a thing for a creditable purpose to the extent that you acquire it in *carrying on your *enterprise. (2) However, you do not acquire the thing for a creditable purpose to the extent that: (a) The acquisition relates to making supplies that would be *input taxed; or (b) The acquisition is of a private or domestic nature. (3) .... Miscellaneous Taxation Ruling MT 2006/ 1 The New Tax System: the meaning of entity carrying on an enterprise for the purposes of entitlement to an Australian Business Number (MT 2006/1) in aiding entities to determine their entitlement to an ABN, considers the meaning of 'carrying on an enterprise'. Paragraph 94 of MT 2006/1 provides that carrying on an enterprise includes activities done in the commencement or termination of an enterprise. Given this definition, it follows that activities done by an entity that are part of a process of beginning or bringing into existence an enterprise are activities in carrying on an enterprise (paragraph 122 of MT 2006/1). Further, paragraphs 123 to 128 of MT 2006/1 states as follows: 123. In the Commissioner's view the term, 'doing anything in the course of the commencement....of an enterprise' describes the kind of activities undertaken. The ultimate outcome of the activities and whether or not an ongoing enterprise eventuates is not a determinative factor. An entity has to determine its entitlement to an ABN from the time of its first activities. 124. If the activities have the character of those ordinarily undertaken to commence an enterprise they will be accepted as falling within the statutory definition. This leads to a broad range of preliminary activities being accepted as an enterprise. These types of activities may still be considered to be commencement activities even where the eventual enterprise is conducted differently from the one originally contemplated. 125. An enterprise must start somewhere and the first step or steps may be minor. In Ferguson v. Federal Commissioner of Taxation Bowen CJ and Franki J expressed the point in this way: Repetition and regularity of the activities is also important. However, every business has to begin and even isolated activities may in the circumstances be held to be the commencement of carrying on business. 126. In the case of feasibility studies involving genuine business activities where, from the scale and nature of these activities it is clear that there has been serious contemplation of developing an enterprise, it will be accepted that this has been the commencement of an enterprise. 127. In contrast there is a range of activities that are of a private nature or too remote from fruition that are not the commencement activities of an enterprise. As well, commencement activities require more than an intention. For example, if a person undertakes a tour of a wine region to enhance their knowledge of the wine industry with the aim to possibly establish some future business activity, the Commissioner would not consider this to be commencement activities. 128. Activities undertaken to establish an entity, for example drawing up of a trust deed and the settlement of trust property, are not commencement activities. This is because the trust cannot commence activities until it is in existence. Your purchase of the assets would constitute commencement activities undertaken by you in carrying on your enterprise and are not input taxed or private and domestic in nature. Therefore, the requirement in paragraph 11-5(a) of the GST Act is satisfied. | Detailed Reasoning - Paragraph 11-5(b) of the GST Act - taxable supply: Section 9-5 of the GST Act provides that you (here, the supplier) make a taxable supply if: a) you make the supply for consideration b) the supply is made in the course or furtherance of an enterprise that you carry on c) the supply is connected with the indirect tax zone, and d) you are registered or required to be registered for GST. However, the supply is not a taxable supply to the extent that it is GST-free or input taxed. The requirements in paragraphs 9-5(a) to (d) are satisfied by the supplier who is registered for GST and will issue a tax invoice to you in respect of its supply of the assets to you. | Detailed Reasoning - Paragraph 11-5(c) - consideration: As set out above, you have provided or are liable to provide consideration. Therefore, paragraph 11-5(c) would be satisfied. | Detailed Reasoning - Paragraph 11-5(d) - registered for GST: You are registered for GST. Therefore, paragraph 11-5(d) is satisfied. | Detailed Reasoning - Conclusion: As all the requirements in section 11-5 of the GST Act will be satisfied, you will have made a creditable acquisition from the supplier. You are entitled to input tax credits, under section 11-20 of the GST Act, on the creditable acquisitions you make. Further, you will be able to attribute these acquisitions in accordance with section 29-5 of the GST Act.