Buying or owning a business

Your State taxation obligations relating to buying or owning a business.

If you own, represent, or are purchasing a business, the following information will assist you in understanding any related taxes and duties that may be payable or any rebates that may be available.


As a business you may be liable for duty on certain documents and transactions.

Land tax

Land tax is an annual tax that applies to all properties in Western Australia. Exemptions, concessions and rebates may apply.

Payroll tax

You may be liable for payroll tax if your business pays, or is part of a group of businesses that pays, taxable wages in excess of $850,000 per year.

Buying a business in WA

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A Western Australian business asset is dutiable property and includes goodwill and intellectual property.

Certain transactions relating to business acquisitions may give rise to a transfer duty liability if there is a dutiable transaction over business assets.

A Western Australian business is

  • a business that, at any time in the year before the transaction, has either been carried on in or from Western Australia, or has supplied commodities or services to customers in Western Australia or
  • carrying out an activity for gain or reward under a Western Australian or Commonwealth business licence.

A business asset includes

  • goodwill of a business
  • a restraint of trade arrangement
  • a business identity
  • a business licence
  • a right of a business under an uncompleted contract to supply commodities or provide services
  • intellectual property of a business
  • things that a business has that are in the nature of rent rolls and client lists, but does not include a trade debt.

Some transactions involving Western Australian business assets are not dutiable transactions.

A dutiable transaction includes circumstances where a person agrees to relinquish a business licence, or to not apply for a renewal of a licence, so that it or another similar licence can be issued to another person.

Chattels transferred with business assets

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A chattel, such as an item of plant or equipment, is dutiable property if it is being transferred with other dutiable property (such as business assets).

The following are not included as chattels

  • chattels that are stock-in-trade
  • chattels held for use in manufacture
  • chattels under manufacture
  • chattels held or used in connection with the business of primary production
  • livestock
  • a vehicle if the transfer or grant of a licence is chargeable with, or exempt from, vehicle licence duty
  • a ship or vessel.


An agreement for the sale of business assets provides that the consideration is to be paid as follows

  • Goodwill ----------------- $ 50,000
  • Plant & Equipment ---- $100,000
  • Stock --------------------- $ 80,000
  • Motor Vehicles --------- $ 20,000

As the transaction involves the transfer of stock-in-trade and licensed vehicles, the consideration apportioned to these will not be included in the dutiable value. Vehicle licence duty will be charged when the vehicle licence is transferred at the Department of Transport.

The dutiable value for the transaction is $150,000 (the consideration allocated to the goodwill and the plant and equipment).

Rate of duty

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The rates of duty below can be applied to the transfer of business assets.

General rate

The general rate of duty will be applied to the transfer of business assets unless the concessional rate applies.

Concessional rate

The concessional rate of duty applies to a transaction that is a sale of business assets if

  • the property is business property and
  • the value of the property does not exceed $200,000
  • and the purchaser is an eligible purchaser, that is, a person who is not a government body and who intends to carry on the business for an indefinite period.

See more information about rates of duty.

Valuation of business assets

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A valuation may be required for the business assets.

Related parties

valuation is required when the parties are related or not otherwise dealing at arms length.


A valuation is required when there is no consideration for the business assets, or the consideration appears to be inadequate or unascertainable.


An agreement for the sale of business assets provides that the consideration is to be paid as follows

  • Goodwill -------------------- $ 1
  • Business Licences ------- $75,000
  • Intellectual Property ----- $25,000

The agreement provides that the consideration allocated to goodwill is to be adjusted after the transfer of property and the purchaser is to pay to the vendor an amount equal to 3% of the annual sales for the three years following settlement.

Although part of the consideration is unascertainable, the Commissioner will value, or obtain a valuation of, the goodwill of the business at the date that liability to duty arose on the agreement.

Transfers in multiple jurisdictions

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In some cases, neither the principal place of business nor the head office of the Western Australian business is in Western Australia.

The dutiable value is determined using the formula DV = (CUV x WAS) / TS


  • DV is the dutiable value
  • CUV is the consideration for the transaction, or the unencumbered value of the business asset the subject of the transaction if
    • there is no consideration for the transaction or
    • the consideration cannot be ascertained when liability for duty on the transaction arises or
    • the unencumbered value is greater than the consideration for the transaction
  • WAS is the gross amount (in Australian dollars) of the commodities delivered and services provided by the business to customers in Western Australia in the last 3 completed financial years preceding the transaction
  • TS is the gross amount (in Australian dollars) of all the commodities supplied and services provided by the business in the last 3 completed financial years preceding the transaction


Substituted transferees and agency relationships

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Provide full details of the purchaser(s) of the property.

Additional duty may be payable where the transfer is not in accordance with the agreement for the transfer, or if particular details are not clearly identified.

See the substituted transferees fact sheet and Revenue Ruling DA 7.

Page reviewed 19 September 2019