An Australian Business Number (ABN) is required by the Australian government for certain business purposes and understanding it is important to those who plan to live, work or run a business in Australia. An ABN is a unique 11 digit number that identifies a business. If you uncertain about what an ABN is, who needs one or how to get one, this article will help you understand what an Australian Business Number is and how it works.
What is an ABN?
The Australian Business Number (ABN) is a unique identifier that is needed for businesses to conduct their transactions with the Australian government. The system was established for registering business and giving them these unique identifying numbers so they could identify themselves consistently and reliably for anything related to the Australian Government and all other Commonwealth purposes. This is necessary for proper compliance with taxation laws. Prior to the establishment of the ABN, following laws was more complex. One of the main purposes of the Act was to reduce the number of government registration and reporting requirements. The system was made available to State, Territory and local government regulatory bodies.
Who Needs an ABN?
Any government entity carrying on an enterprise in Australia needs an Australian Business Number. Entity is a broad term that does not have to be specifically an individual or a group and an enterprise is a loose term that covers several possible business activities. Simply, anyone (individual or not) who carries on what is defined as an enterprise is an entity and is entitled to have an ABN. To know if you need an ABN, consider the two following lists that define enterprises and entities. This is not intended to be comprehensive, but will cover the basics. If you are an entity as defined in list A, and you are running an entity as any of the items in list B, you are entitled to and may need an ABN. Remember that entities do not have to be individuals (natural persons) or companies (legal persons).
A: Are you or is your group an entity? Yes, if it qualifies as:
- an individual
- a body corporate
- a corporation sole
- a body politic
- a partnership
- any other unincorporated association or body of persons
- a trust
- a superannuation fund
B: If you are an entity from list A, are you involved in running an enterprise? Yes if:
- Acting in the form of a business
- Involved in leasing property
- Acting as a religious institution
- Acting as an arm of the government
- Acting as a charity
- An entity that in any way acting as a superannuation fund
So, for an entity (from list A) to be entitled to an ABN, it must be:
- carrying on an enterprise in Australia that matches or is similar to the activities from list B
- carrying on an enterprise that makes supplies connected with Australia whether or not it matches activities from list B, or:
- An Australian company registered under the Corporations Act of 2001
Exceptions: You do not need an ABN to work in Australia in every case. International students should be aware that an ABN could be needed in the absence of other qualifiers. For example, initially international students will need to hold a Tax File Number (TFN) or Australian Business Number. For regular employment, the TFN is more common. The ABN would be needed for students providing services independently, since that makes them an entity running an enterprise.
How Can You Get an ABN?
To get an ABN you must apply to be registered in the *Australian Business Register. Then, you may apply yourself or someone else may apply on your behalf. If you are registered in the ABR you will be allocated and ABN and your Australian Business Number will be entered in the Register.
There are three ways to legally apply for an ABN:
- Through the Australian Business Register portal: https://abr.gov.au/
- Using the services of a Registered Tax Agent
- A paper-based application via the ATO (Australian Tax Office)