An ABN, or Australian Business Number, is essential if you want to trade legally in Australia. It consists of 11 digits that identify your business. It provides a simple, numeric way to interact with other businesses and signifies the credibility of an established business that allows you to build positive customer relationships. Registering for an ABN is easy but first you need to understand, in a practical sense, what they are used for and whether you are eligible to apply.

Why do I need an ABN?

ABNs are generally used on day-to-day on invoices, quotes and business to business documentation. An ABN is also important for tax purposes, like GST and pay as you go (PAYG) withholding. If you don’t have an ABN, or you neglect to identify your ABN on any invoice, they payer is entitled to withhold 47% tax from their payment under PAYG stipulations. You also need an ABN if you want to register a .com.au domain.

Am I eligible for an ABN?

You are entitled to an ABN if you are starting or conducting a business in Australia. You may also be entitled if you are a foreign business trading in Australia’s indirect tax zone. This means, any business located outside Australia that operates within Australia or any business that produces supplies that are connected with Australia but not its external territories or particular offshore areas. You are also entitled to an ABN if you are a Corporations Act company, registered with the Australian Securities and Investments Commission.

What do I need to get an ABN?

Before you can apply for an ABN, you will need a TFN, or Tax File Number. Your TFN is yet another number that allows individuals and enterprises to monitor and implement tax and government services. You will need to obtain a TFN from the ATO (Australian Taxation Office) but the type of TFN you get will depend on your business structure. This is when your business plan comes in handy! If you intend on operating as a sole trader, you can simply use your personal TFN. You will already have a personal TFN if you are currently legally employed or have been legally employed in Australia in the past. If so, you can apply for your ABN immediately. If not, you can apply for an Australian TFN using the directions provided here. To apply, you need to provide certified identification documents to prove your identity. There are various documents you can provide, including (but not limited to) your driver’s licence, your passport, a marriage certificate or your birth certificate. The number of documents you provide depends on the weight of each document in terms of credibility. For example, a passport or birth certificate is worth more than photo ID. Each type of documentation is assigned a certain number of points according to their weight as proof of identification and you must provide 100 points of identification to apply for a TFN. If you plan on running your business as a company or partnership, you can apply for your business TFN at the same time you register your ABN. A partnership is when a two or more sole traders come together to run a business; a company is identified as a business whose stakeholders are separate from the company itself. In both of these instances, you will need to provide 100 points of identification with your application.

Ready to apply?

When you’re ready to apply, you can do so online here. Simply follow the steps as you click through the online form!

Small Business