Do you need an Australian Business Number?

Anyone trying to set up a business in Australia really should have an Australian Business Number (ABN), particularly if they’re planning to service other business clients. It is an 11 digit identifying number that businesses use when dealing with other businesses, often placed on invoices and other documents relating to sales. If you don’t provide an ABN on your invoices to business customers, they may be able to withhold 46.5% of any payment for tax purposes.

Does your business need an Australian Business Number?

While an ABN is not compulsory, you will need to register for one for GST purposes. Having an ABN also has several other advantages for bookkeeping or any other business, such as:

  • facilitating single Business Activity Statements;
  • confirming your business’ identity to others when ordering and invoicing;
  • avoid other businesses withholding PAYG tax on payments you receive;
  • allows you to claim GST credits;
  • may allow you to claim energy grants credits;
  • purchase an Australian domain name (for creating a business website).

Conditions for holding an Australian Business Number

An entity is entitled to an ABN if it is one of the following:

  • company incorporated under the Corporations Act 2001 (Cth) in Australia;
  • charitable institution or trustee of a charitable fund in Australia;
  • deductible gift recipient in Australia;
  • religious institution in Australia;
  • superannuation fund;
  • government entity.

Alternatively, if one of the following statements is applicable to the entity:

  • its activity is carried out in the form of a business;
  • its activity is carried out in the nature of trade, or;
  • its activity is carried out in the form of a regular or continuous grant of a lease, licence or interest in property;
  • its activity is carried out in Australia or it makes supplies that are connected with Australia;
  • its activity is not a private recreational pursuit or hobby.

To apply for an ABN online, go to the Australian Business Register for more information.

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