Enterprise

Carrying on an Enterprise

An entity cannot be registered unless it is carrying on an "enterprise". Enterprise is defined very widely. The most common example of an enterprise is a business. More specifically, an enterprise means:

• Activities in the form of a business, trade or profession. The Commissioner interprets this as including business-like activities that are not carried out for profit, e.g. by non-profit clubs or associations

• Activities in the form of one-off ventures in the nature of trade. This is intended to catch a commercial activity that does not amount to a business. The fact that a profit is made does not necessarily mean that the activity is commercial. So, for example, the sale of the family home, car and other private assets would not normally be caught

• Leasing, licensing or granting interests in property, if this is done on a regular or continuous basis. The commissioner considers that an activity is "regular" if it is repeated at reasonably proximate intervals, and "continuous" if there is no significant cessation or interruption to the activity. On this basis, the occasional letting out of a holiday home for a few weeks a year would not be regarded as regular or continuous, nor as a business. However, if the holiday home was actively advertised for lease all year round, and was actually leased for 20 weeks a year, the Tax Office considers that this would constitute leasing on a regular and continuous basis

• Activities of bodies that are eligible recipients of tax-deductible gifts

• Activities of a trustee or manager of a complying superannuation fund

• Activities of charitable or religious institutions (but these are also entitled to some exemptions)

• Activities of the Commonwealth, a State or a Territory, or corporations established for public purpose

An enterprise does not include the following activities:

• Activities carried out as an employee, or other person subject to specified PAYG withholding rules (company directors, officeholders, labour hire). This means that these people are not treated as carrying on an enterprise themselves. However, their activities are still treated as part of the enterprise of their employer or work provider

• Private recreational pursuits or hobbies

• Activities by an individual, or partnership consisting mostly of individuals, where there is no reasonable expectation of profit or gain. A reasonable expectation requires more than just a possibility

• Activities by certain members of local governing bodies, e.g. councillors

• The Government has announced that religious practitioners will not come within the GST law for their pastoral and related duties