08 Mar 1212 GST adjustments for services where M&A transaction does not eventuate - GSTD 2012/3
On 7 March 2012, the ATO issued GST Determination GSTD 2012/3 entitled "Goods and services tax: does an adjustment for a change in extent of creditable purpose necessarily arise for services acquired in relation to a proposed merger and acquisition transaction that does not eventuate, or that does not proceed in the manner contemplated at the time the services were acquired?"
It was previously released in draft form as GSTD 2011/D3.
The answer given to the question posed is: "No. There can only be an adjustment under s 129-401 where there is a change in the extent of creditable purpose of an acquisition...An adjustment under Division 129 cannot be determined for all services acquired in mergers and acquisitions transactions simply by reference to the outcome of the transaction...On the other hand, there may be a change in creditable purpose if the services are applied or reapplied at a time when there has been a change in the intended transaction."