Hi, we have a new wholly owned subsidiary which we would like to bring into the GST group. So far the new entity has not had any transactions go through. The entity plans to transact this month and we plan to group this entity into the main entity GST group (assuming meets all GST group requirements), but may be too late in receiving approval. Can we include the GST receivable/payable to the ATO in the main entity GST group prior to lodging the GST grouping form and nominate a backdated effective date of member joining the group on this form, so that we don't face penalties for any late payments? Also if these entity has had zero transactions so far, do we need to lodge paper copies given that we plan to back date the effective date of the member joining the GST group?
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Hi @Jadelynn,
No, you can't include GST receivables/payables in your main entity's GST group before the subsidiary officially joins. The representative member can only account for GST on behalf of entities that are already approved group members.
You can nominate a backdated effective date when you lodge the GST grouping form, but this doesn't allow you to treat the subsidiary as part of the group before approval. Each entity must meet all GST group eligibility requirements, including:
- being registered for GST
- having the same tax period
- accounting for GST on the same basis
- not belonging to any other GST group.
If your subsidiary has had zero transactions, it still needs to be properly included in the group through the correct process. The backdating relates to when the grouping takes effect, not when you can start consolidating GST obligations.
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