There are specific GST rules for making financial supplies, including IPO’s, capital raising, mergers and acquisitions, and dealings in shares. While financial supplies are usually input-taxed and therefore do not attract a liability to remit GST, they generally have no GST recovery on expenses relating to these supplies.
The purpose of the financial acquisitions threshold (the FAT) is to allow entities that make a relatively small amount of financial supplies, as compared to their taxable supplies or GST-free supplies, to claim full input tax credits relating to those financial acquisitions.
Source: moore-australia.com.au
