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10 Jun 08 Art collector carrying on GST enterprise

The AAT has held that a corporate taxpayer was at all relevant times carrying on an “enterprise” for the purposes of s 9-20 of the GST Act, and was thus entitled to be registered for GST under s 23-10(1) of the GST Act. In the AAT’s opinion, the taxpayer’s acquisitions of artwork as a process of acquiring and consolidating a valuable collection of sound saleable artwork, in order to turn it to account profitably, including the sale of some pieces which were found to be below the requisite standard, all took place as part of carrying on an enterprise, and not as the Commissioner argued only as an investment and hobby or recreational pursuit.

The AAT noted, in particular, at para 190 "...that the definition of “enterprise” in s 9-20 does not exclude an activity or series of activities which may represent an investment in property if that is carried on in the form of a business or in the form of an adventure or concern in the nature of trade. In that regard the acquisition of an object, even by way of a long term investment, is still the acquisition of an object with the purpose of eventually disposing of it by way of or in the course of business..."

"The Taxpayer" and FCT [2008] AATA 461 (AAT, Sweidan SM, 28 May 2008).

For a copy of the decision, go here

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