An unique number for every business
An Australian Business Number is an 11-digit number unique to each business. It’s a legal requirement for anyone who wants to start an enterprise in Australia or who wants to register for GST (Goods and Services Tax). Even if your business isn’t going to register for GST, you still need an ABN.
Apply for an ABN through the Australian Business Register (ABR) – it’s free to apply. Your business will use its unique number to identify itself when dealing with the government, other businesses and the public.
Apply for an ABN if you intend to run a business
You’ll be asked to provide lots of information when you apply for an ABN. The information you provide will determine if you receive one or not.
To be issued with one, your business must be one of the following types (also called entities):
- individual/sole trader
Every business entity (whether a sole trader, partnership, company or trust) that applies for an ABN only needs the one number. However, you can choose to run more than one enterprise with a single ABN – for example, a furniture shop, a curtain outlet, and a fabric supplier could all use the same number if they’re part of the same business entity. But if any of the operations are run by a different business entity, they’d require a separate ABN.
So it’s important to choose the right structure for your business. You should always seek professional advice from your accountant or lawyer before making any decisions about registering for an ABN or choosing your business structure. Read more about choosing your business structure on the ATO website.
The advantages of having an Australian Business Number
One of the main advantages is that you’ll save time and money. That’s because other businesses are legally required to withhold tax from payments to you if your business doesn’t quote an ABN on invoices. And in this case, they must withhold it at a rate of 46.5 percent. So even though your business can claim back any excess tax paid in the tax return at the end of the year, it’s not ideal for your cashflow.
Having an Australian Business Number also means your business can:
- claim GST credits (when registered for GST)
- claim fuel tax or energy grants credits (if you qualify)
- stay compliant and be able to lodge activity statements (BAS/IAS) with the ATO
- confirm your business identity to others when ordering and invoicing
- avoid pay-as-you-go (PAYG) tax on payments you receive (see below)
- obtain an Australian domain name (for your .au website)
- deal with other businesses more seamlessly.
Registering an ABN is a separate process to registering a business name.
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