ABN Registration

An Australian Business Number (ABN) is a unique 11-digit identifier allocated for business dealings with the Australian Tax Office (ATO) and other government departments and agencies.

Australia Company Numbers (ACNs) and Australian Registered Body Numbers (ARBNs) are 9 digit numbers issued by the Australian Securities & Investments Commission (ASIC).

An ACN is issued to an entity when it registers as a company under Corporations Law.

An ARBN is issued to an entity when it registers with ASIC other than as a company, for example, foreign companies and registrable Australian bodies.

An ABN is not the same as a Tax File Number (TFN).

A TFN is your personal number for dealings with the ATO and an ABN, whilst 'attached' to your TFN on ATO systems, is a public number used in business dealings.

You’re entitled to an ABN if all of the following statements are true:

• Your activity is carried out in the:
  
  
  • Form of a business
  • Nature of a trade
  • Form of a regular or continuous grant of a lease, licence or interest in property
• Your activity is carried out in Australia or you make supplies connected with Australia.
• You have a reasonable expectation that a profit will be made from your activity.

You’re not entitled to an ABN if any of the following statements are true:

• Your activity is carried out as an employee or in connection with earning payment as a company director, office holder or under a labour hire arrangement. (An employee is a person who receives a salary or wage in return for work or services rendered).
• You’re not considered an employee for ABN registration purposes if you have your own business and you receive a salary or wage from an activity related to your business.
• Your activity is a private recreational pursuit or hobby.
• Your activity is conducted as a member of a local government body, for example, as an elected member of a city, town or shire council.

As an independent contractor, you operate a business entity that produces a result for an agreed price. There are key differences between independent contractors and employees.

In most cases you’re an independent contractor if you:

• Are paid for results achieved.
• Provide all or most of the materials and equipment required to complete the work.
• Are free to delegate work to others.
• Have freedom in the way you work.
• Provide services to other businesses.
• Are free to accept or refuse work.
• Are in a position to make a profit or loss.

In many cases, the income you get for your work may be classified as personal services income (PSI).

PSI is income that’s mainly a reward for personal efforts or skills and is generally paid either to you either as a contractor or to a personal services entity (a company, partnership or trust).

In any one contract, if more than 50% of the income you get from delivering services comes from your skills, knowledge, expertise or efforts, rather than the materials supplied and / or equipment you use to complete the job, then the income for the contract will be classified as PSI.

To qualify for an ABN, you must meet one of the criterion in each list below:

Criterion 1. The entity is:

• A company incorporated under the Corporations Act in Australia
• A charitable institution or trustee of a charitable fund in Australia
• A deductible gift recipient in Australia, or
• A religious institution in Australia

Criterion 2. The entity can answer yes to the following statements:

• Form of a business
• Nature of trade, or
• Form of a regular or continuous grant of a lease, licence or interest in property
• The activity is carried out in Australia or makes supplies that are connected with Australia
• The activity is not a private recreational pursuit or hobby
• There is a reasonable expectation of a profit being made (only for partnerships where all or most of the partners are individuals)

• If you represent an entity, you can apply for an ABN without having an entity TFN, however you’ll need to provide the entity's public officer TFN and all entity associates TFNs and addresses. You can apply for an entity TFN along with your entity's ABN application.
• If you’re an individual, you can apply for an ABN without having a TFN, however this will slow down the processing of your application.
• You’ll also have to provide certified identification documents. If you have a TFN, there’s no need for identification documents, as you provided identification when you applied for your TFN.

• If you’re an individual, you can’t obtain a TFN along with your ABN. You’ll need to file a separate TFN application. Applying for an ABN without a TFN may slow down the processing of your application. We recommend you obtain your TFN before your ABN.
• If you represent an entity, you can apply for entity TFN along with your ABN registration. Along with your ABN, you can also register about GST and PAYG Withholding.

In Australia, goods and services tax (GST) is charged on the supply of most goods, services and other things - for example, supplies of rights or the sale of certain property. The GST rate is set at 10%.

You may voluntarily register for GST only if you’re carrying out an enterprise or intent to carry an enterprise and your GST turnover is $75,000 or less. If your GST turnover is more than $75,000, you’re required by law to register for GST.

If you provide taxi or limousine travel for fares you’re required to register for GST irrespective of your GST turnover amount.

Pay as you go (PAYG) withholding is a system for withholding amounts from payments you make to employees and other businesses so they can meet their end-of-year tax liabilities.

You’ll have withholding obligations if you:

• Are an employer, or
• Operate a business that has other workers, such as contract workers and you enter into voluntary agreements to withhold amounts from payments you make to them, or
• Make payments to other businesses that don’t quote their Australian business number (ABN)

If you make payments subject to withholding, you must:

• Register for PAYG withholding
• Withhold amounts from wages and other payments
• Lodge activity statements and make payments to us
• Provide payment summaries to workers
• Provide us with a PAYG withholding payment summary annual report

Every company is required to appoint a public officer (for tax purposes) within three months of commencing a business.

A public officer must be at least 18 years of age, appointed by a company and answerable for all actions on behalf of the company for tax-related purposes. Examples include record keeping and submitting company tax returns. The public officer should be an Australian resident for tax purposes.

An individual is an Australian resident for tax purposes if the following applies:

• Individual has always lived in Australia or
• Individual moved to Australia and lives there permanently or
• Individual has been in Australia continuously for six months or more, and for most of the time has been in the same job, living in the same place

A company is considered an Australian resident for tax purposes if the following applies:

• Incorporated in Australia, or
• Not incorporated in Australia, but carries out business in Australia and has either its central management and controls in Australia or its voting power is controlled by shareholders who are residents of Australia.
• For shareholders, partners or other entity associates, individual residency requirements apply.

A non-profit organisation is an organisation that’s not operating for the profit or gain of its individual members, direct or indirect. This applies both while the organisation is operating and when it winds down.

Any profit made by the organisation goes back into the operation of the organisation to carry out its purposes and not distributed to any of its members.

Non-profit organisations operate in many areas of society and can include:

• Church schools
• Churches
• Community childcare centres
• Cultural societies
• Environmental protection societies
• Neighbourhood associations
• Public museums and libraries
• Scholarship funds
• Scientific societies
• Scouts
• Sports clubs
• Surf lifesaving clubs
• Traditional service clubs.