What is an ABN?
An Australian business number (ABN) is a unique 11-digit number that’s used to identify businesses. If you are in business, you use an ABN to interact with other businesses and government agencies and departments, such as the ATO, and include it on documents. For example, if you charge GST (here’s an overview of registering for GST), you are required to include your Australian business number. Your business could have the same name as another business, but no other business will have the same ABN.
An ABN will not replace your tax file number (TFN). If you are a sole trader, you can use your existing personal TFN, but registering a company will require a separate TFN.
Why get an ABN?
Besides being required for businesses, an ABN makes it easy for other businesses to confirm your details when carrying out business activities such as ordering and invoicing. If you are paid by another business and you don’t have an ABN, they are required to withhold part of what they owe you as part of the pay-as-you-go (PAYG) withholding system. Once you have an ABN, anyone can confirm your ABN details by using the ABN Lookup website.
Who can get an ABN?
Not everyone is able to get an ABN. In order to qualify, you need to be carrying on a business in Australia. This means that you have started trading or have undertaken activities to commence trading. Commencement activities include advertising, setting up social media accounts, purchasing business cards, obtaining business licenses or insurance, leasing or purchasing premises, issuing quotes or bidding for work, applying for financing, and buying a business.
If you carry out work as an employee (including as an apprentice and labourer) you’re not entitled to an ABN. Potential employers should not ask for an ABN as a condition of employment. In addition, residential property investors might not need an ABN, because renting residential property doesn’t include GST or PAYG.
How to get an ABN number
The fastest way to apply for an ABN is online through the Australian Business Register (ABR) website. There’s no cost to register for an ABN. If you use the services of a tax practitioner or other service provider to complete your application, they may charge for their services. If you choose to get assistance, it’s important to use a registered tax agent or BAS agent, as they are experienced and qualified to assist with tax issues. In addition, only a registered agent can charge a fee for assisting with GST registration.
Through the ABN application process, you also can:
- Apply for a national business name
- Register for tax payments, including PAYG withholding and GST
- Get an AUSkey – this is a digital certificate that enables you to log in to a range of government online services.
If you are starting out as a sole trader, check out A Short Guide to Sole Trader Tax to find out about your tax obligations.
How long does it take to get an ABN?
If you are successful with your application, you immediately received your 11-digit ABN. If your attempt at ABN registration is not successful, you’ll get a refusal number. In addition, you will also receive a letter within 14 days to confirm that your application has been refused, why you were refused, and the options available.
What are the obligations for ABN holders?
Once you have your ABN, you are required to notify the ABR within 28 days to keep your details up to date, including your name, address and other contact details. If the ABR contacts you for information about your ABN entitlement or to confirm your identity, you are required to comply with the request. If you stop operating your business, you need to request the cancellation of your ABN (once you have met all your tax obligations).
If you change your business structure (for example, from sole trader to a company structure), you will need to cancel your existing sole trader ABN and apply for a new one.
For more details on the ABN registration process, visit the Australian Business Register website.