Private ruling: GST and IPO costs
Date of advice: 24 December 2025
Published: 9 February 2026
Ruling period: 1 January 20XX to 30 June 20XX
Date scheme commenced: 1 January 20XX

Ruling: Q1: When the company engaged the supplier to assist the company to make an Initial Public Offering (IPO) and list on the National Stock Exchange of Australia (the NSX), did the company make a creditable acquisition under section 11-5 of the A New Tax System (Goods and Services Tax) Act 1999 (the GST Act)? | A1: If the company: • is registered or required to be registered for GST • acquired the legal services for a creditable purpose • provided, or were liable to provide consideration for the supply of legal services from the supplier • did not exceed the Financial Acquisitions Threshold (the F.A.T.) and • no other provision of the GST Act made the supply GST-free or Input Taxed,the company will have made a creditable acquisition.

Relevant facts and circumstances: the company engaged the supplier to assist the company to make an Initial Public Offering (IPO) and list on the National Stock Exchange of Australia (the NSX). The company is registered for GST, effective from the XX XXX 20XX. The company has an international 100% subsidiary. Publicly available records on ABN Lookup confirm that the supplier is registered for GST from XX XXX 20XX. Tax invoices have been issued by the supplier for legal services relating to the company's IPO but have been issued to the company's International subsidiary and do not include GST.

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 | A New Tax System (Goods and Services Tax) Act 1999 section 40-5 | A New Tax System (Goods and Services Tax) Act 1999 Division 70 | A New Tax System (Goods and Services Tax) Act 1999 section 38-190

Reasons for decision: Detailed Reasoning - What is a creditable acquisition?: Section 11-5 provides that 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, for GST. Subsection a) The meaning of 'creditable purpose' is defined in section 11-15, which provides that you acquire a thing for a creditable purpose to the extent that you acquire it in carrying on your enterprise. However, you do not acquire the thing for a creditable purpose to the extent that the acquisition relates to making supplies that would be input taxed. Subsection 11-15(4) provides an exception to the rule that you normally cannot claim GST credits on acquisitions that relate to making input-taxed supplies, such as financial supplies. Paragraph (b) says that this exception applies if you do not exceed the financial acquisitions threshold. The financial acquisitions threshold (the F.A.T.) is essentially a test that measures whether the amount of financial-supply-related acquisitions your business makes is significant. If those acquisitions are relatively small, the law lets you claim GST credits on them. You exceed the F.A.T. if the GST (input tax credits) you would be entitled to claim on your financial acquisitions is more than $150,000. over the testing period, or if the input tax credits relating to your financial acquisitions are more than 10% of the total input tax credits you would be entitled to for all your acquisitions and importations over the testing period. As the legal services were acquired in carrying on your enterprise, you will meet subsection (a) provided you don't exceed the F.A.T. Subsection b) The meaning of 'taxable supply' is defined in section 9-5, which provides that the supply of the thing to you will be a taxable supply where the supplier makes a supply: • for consideration; • in the course or furtherance of an enterprise they carry on; • that is connected to Australia; and • they are registered or required to be registered for GST. However, the supply will not be a taxable supply to the extent the supply is GST-free or input taxed. Each of the above factors necessary for a taxable supply are discussed in turn below. | Detailed Reasoning - Did the supplier make a supply for consideration?: The supplier has issued tax invoices for their supply of legal services, therefore, the supplies by the supplier were for consideration for the purposes of the GST Act. | Detailed Reasoning - Was the supply made in the course or furtherance of an enterprise that the supplier carries on?: The supplier is a law firm and the supplies made were legal services in relation to the company's IPO. Therefore, the supplies were made by the supplier in the course or furtherance of that enterprise. | Detailed Reasoning - Was the supply connected to Australia?: The supply of legal services in relation to an IPO is made to the company that is listing on the stock exchange. This requirement for a taxable supply is satisfied as the supply was made to the company and was done in Australia and was made through an enterprise that the supplier carries on in Australia (paragraphs 9-25(5)(a) and (b) of the GST Act). | Detailed Reasoning - Was the supplier registered or required to be registered for GST?: Publicly available records on ABN Lookup confirm that the supplier is registered for GST from XX XXX 20XX. | Detailed Reasoning - Was the supply input taxed or GST-free to any extent?: There are no provisions of the GST Act that would have treated the supply of legal services to the company as GST-free or input taxed, however the tax invoices provided include some disbursements made on your behalf and the disbursements should not be subject to GST. From the facts provided, the supply will meet subsection (b) and be a taxable supply. Subsection c) You engaged the supplier to provide legal services in relation to your IPO in return for consideration. Accordingly, you provide, or are liable to provide, consideration for the supply. Subsection d) You are registered for GST effective from the XX XXX 2024, so will meet this subsection for supplies made on or after this date. As the tax invoices provided detail that the invoice dates and the services provided were for the period up to and including XX XXX 2024, you will not meet this subsection in relation to these tax invoices. | Detailed Reasoning - Who is entitled to input tax credits for creditable acquisitions?: Section 11-20 provides that you are entitled to the input tax credit for any creditable acquisition you make. Goods and Services Tax Ruling GSTR 2008/1 Goods and services tax: when do you acquire anything or import goods solely or partly for a creditable purpose? (GSTR 2008/1) considers the creditable purpose requirement as set out in section 11-15 of the GST Act. Specifically, example 16 (paragraphs 194 - 196) demonstrates the Commissioner's view that where the shareholders of a private company decide to list the company through an IPO, it is the company that makes supplies of interests in securities (financial supplies) when it issues the shares and the acquisitions that relate to making financial supplies are made in connection to the company's enterprise. Example 16 - initial placement offer - acquisition of arranging services 194. Noddy Industries Pty Ltd is a private company that manufactures furniture for sale thereby making taxable supplies. Noddy needs to upgrade its manufacturing equipment to remain competitive with other manufacturers. To do this it needs to raise $10,000,000. The shareholders of Noddy decide to list the company and raise the necessary capital through an initial placement offer. 195. A merchant bank is engaged to arrange the flotation. Noddy makes supplies of interests in securities (financial supplies) when it issues the shares. 196. The acquisition of the arranging service is made in carrying on Noddy's enterprise and is to raise capital through the issue of securities, which are input taxed supplies. The acquisition of the arranging service relates to making supplies that would be input taxed (issue of securities) and is not for a creditable purpose under section 11-15. Accordingly, it is the company that may have made the creditable acquisitions in relation to the supply of legal services.