Australian Business Number

Last updated

The Australian Business Number (ABN) is a unique 11-digit identifier issued by the Australian Business Register (ABR) which is operated by the Australian Taxation Office (ATO). The ABN was introduced on 1 July 2000 by John Howard's Liberal government as part of a major tax reform, which included the introduction of a GST.

Contents

The law requires each entity that carries on a business in Australia has an ABN and that the ABN appear on each tax invoice and other tax related documents issued by the entity.

Australian Business Register

The Australian Business Register (ABR) is maintained by the Registrar of the ABR, who is also the Commissioner of Taxation. [1] The Registrar registers entities, issuing them with an ABN, [2] while the Commissioner of Taxation issues the entity a tax file number.

Entitlement to an ABN

The Registrar issues ABNs only to entities that are entitled to an ABN, [3] which can be:

For an entity to be entitled to an ABN, it must:

Whether or not an entity is carrying on an enterprise is a question of fact and there are many circumstances where an entity will be carrying on an enterprise. Without being exhaustive, an entity will be carrying on an enterprise if it:

The Registrar can refuse an entity's application to be registered. [9] Equally, the Registrar can cancel an entity's registration and thus their ABN. [10] Each of these decisions are reviewable taxation decisions.

Applying for an ABN

An entity can apply for an ABN: [11]

Before applying for an ABN the entity must have a tax file number (TFN). [12]

Format

The ABN is an 11-digit number where the first two digits are a checksum. Unlike with the tax file number (TFN), the ATO has publicised the formula for checking and creating valid ABN checksums. [13] Also, the nature of the ABN algorithm means that any 9-digit number can be made into a valid ABN.

In the case of companies, the ATO determines the ABN by using the company's Australian Company Number (ACN) to which the two-digit checksum is prefixed.

See also

Related Research Articles

<span class="mw-page-title-main">Partnership</span> Arrangement in which parties agree to cooperate to advance their mutual interests

A partnership is an arrangement where parties, known as business partners, agree to cooperate to advance their mutual interests. The partners in a partnership may be individuals, businesses, interest-based organizations, schools, governments or combinations. Organizations may partner to increase the likelihood of each achieving their mission and to amplify their reach. A partnership may result in issuing and holding equity or may be only governed by a contract.

A pay-as-you-earn tax (PAYE), or pay-as-you-go (PAYG) in Australia, is a withholding of taxes on income payments to employees. Amounts withheld are treated as advance payments of income tax due. They are refundable to the extent they exceed tax as determined on tax returns. PAYE may include withholding the employee portion of insurance contributions or similar social benefit taxes. In most countries, they are determined by employers but subject to government review. PAYE is deducted from each paycheck by the employer and must be remitted promptly to the government. Most countries refer to income tax withholding by other terms, including pay-as-you-go tax.

The Australian Taxation Office (ATO) is an Australian statutory agency and the principal revenue collection body for the Australian Government. The ATO has responsibility for administering the Australian federal taxation system, superannuation legislation, and other associated matters. Responsibility for the operations of the ATO are within the portfolio of the Treasurer of Australia and the Treasury.

A tax file number (TFN) is a unique identifier issued by the Australian Taxation Office (ATO) to each taxpaying entity—an individual, company, superannuation fund, partnership, or trust. Not all individuals have a TFN, and a business has both a TFN and an Australian Business Number (ABN). If a business earns income as part of carrying on its business, it may quote its ABN instead of its TFN.

<span class="mw-page-title-main">Goods and services tax (Australia)</span> Type of value added tax used in Australia

Goods and Services Tax (GST) in Australia is a value added tax of 10% on most goods and services sales, with some exemptions and concessions. GST is levied on most transactions in the production process, but is in many cases refunded to all parties in the chain of production other than the final consumer.

A national identification number, national identity number, or national insurance number or JMBG/EMBG is used by the governments of many countries as a means of tracking their citizens, permanent residents, and temporary residents for the purposes of work, taxation, government benefits, health care, and other governmentally-related functions.

The constitutional basis of taxation in Australia is predominantly found in sections 51(ii), 90, 53, 55, and 96, of the Constitution of Australia. Their interpretation by the High Court of Australia has been integral to the functioning and evolution of federalism in Australia.

Income tax in Australia is imposed by the federal government on the taxable income of individuals and corporations. State governments have not imposed income taxes since World War II. On individuals, income tax is levied at progressive rates, and at one of two rates for corporations. The income of partnerships and trusts is not taxed directly, but is taxed on its distribution to the partners or beneficiaries. Income tax is the most important source of revenue for government within the Australian taxation system. Income tax is collected on behalf of the federal government by the Australian Taxation Office.

Superannuation in Australia or "super" is a savings system for workplace pensions in retirement. It involves money earned by an employee being placed into an investment fund to be made legally available to fund members upon retirement. Employers make compulsory payments to these funds at a proportion of their employee's wages. From July 2023, the mandatory minimum "guarantee" contribution is 11%, rising to 12% from 2025. The superannuation guarantee was introduced by the Hawke government to promote self-funded retirement savings, reducing reliance on a publicly funded pension system. Legislation to support the introduction of the superannuation guarantee was passed by the Keating Government in 1992.

Capital gains tax (CGT), in the context of the Australian taxation system, is a tax applied to the capital gain made on the disposal of any asset, with a number of specific exemptions, the most significant one being the family home. Rollover provisions apply to some disposals, one of the most significant of which are transfers to beneficiaries on death, so that the CGT is not a quasi estate tax.

Australian Transaction Reports and Analysis Centre (AUSTRAC) is an Australian government financial intelligence agency responsible for monitoring financial transactions to identify money laundering, organised crime, tax evasion, welfare fraud and terrorism financing. AUSTRAC was established in 1989 under the Financial Transaction Reports Act 1988. It implements in Australia the recommendations of the Financial Action Task Force on Money Laundering (FATF), which Australia joined in 1990.

An Australian Company Number is a unique identifier required by every company registered under Australia’s Corporations Act 2001 (Cth). The ACN is a nine-digit number issued by the Australian Securities & Investments Commission (ASIC) to every Australian company. The number is usually printed in three groups of three digits, and preceded by the letters ACN must be quoted on all correspondence and invoices issued by the company.

<i>Cridland v Federal Commissioner of Taxation</i> Judgement of the High Court of Australia

Cridland v Federal Commissioner of Taxation, was a 1977 High Court of Australia case concerning a novel tax scheme whereby some 5,000 university students became primary producers for tax purposes, allowing them certain income averaging benefits. The Australian Taxation Office held this was tax avoidance, but the test case was decided in favour of the taxpayer, one of the students, Brian Cridland.

Cherry picking tax avoidance was a form of tax avoidance used in Australia in the 1970s and early 1980s. Company contributions to a superannuation fund were claimed as tax deductions, but the money immediately went back to the company.

Income taxes are the most significant form of taxation in Australia, and collected by the federal government through the Australian Taxation Office. Australian GST revenue is collected by the Federal government, and then paid to the states under a distribution formula determined by the Commonwealth Grants Commission.

<i>Fairfax v Commissioner of Taxation</i> Judgement of the High Court of Australia

Fairfax v Commissioner of Taxation is a High Court of Australia case that considered the scope of the taxation power in section 51(ii) of the Constitution.

<span class="mw-page-title-main">Australian corporate law</span>

Australian corporations law has historically borrowed heavily from UK company law. Its legal structure now consists of a single, national statute, the Corporations Act 2001. The statute is administered by a single national regulatory authority, the Australian Securities & Investments Commission (ASIC).

Indian tax forms are used to document information in compliance with the Income Tax Act of 1961 and in accordance with the Income Tax Rules, which govern the process of filing income tax returns in India.

'Google tax' is a popular term used to refer to anti-avoidance provisions that have been passed in several jurisdictions dealing with profits or royalties that have been diverted to other jurisdictions with lower or nil rates.

<span class="mw-page-title-main">AUSKey</span> Australian authentication software

AUSKey was a piece of software designed as an alternate, more secure authentication method for businesses and users of Australian Government websites. The software was developed by Verizon Business, and launched by the Australian Taxation Office in April 2010 to replace client certificates. In January 2020, it was announced that AUSKey would be retired and superseded in March that year by the newly released myGovID. On April 1, 2020 AUSKey was retired. AUSKey was available primarily as a browser extension for Firefox, Chrome, and Safari, as well as a special Firefox based web browser designed for use with a USB flash drive. AUSKey was available in two flavours, the "administrator" and "standard" types, designed for organisation administrators and users respectively.

References

  1. ↑ Section 28 of the A New Tax System (Australian Business Number) Act 1999 (Cth).
  2. ↑ Section 11 of the A New Tax System (Australian Business Number) Act 1999 (Cth).
  3. ↑ Section 8 of the A New Tax System (Australian Business Number) Act 1999 (Cth).
  4. ↑ Subsection 184-1(1) of the A New Tax System (Goods and Services Tax) Act 1999 (Cth).
  5. ↑ Paragraph 8(1)(a) of the A New Tax System (Australian Business Number) Act 1999 (Cth).
  6. ↑ Paragraph 8(1)(b) of the A New Tax System (Australian Business Number) Act 1999 (Cth).
  7. ↑ Subsection 8(1) of the A New Tax System (Australian Business Number) Act 1999 (Cth).
  8. ↑ Section 9-20 of the A New Tax System (Goods and Services Tax) Act 1999 (Cth).
  9. ↑ Section 13 of the A New Tax System (Australian Business Number) Act 1999 (Cth).
  10. ↑ Section 18 of the A New Tax System (Australian Business Number) Act 1999 (Cth).
  11. ↑ "Apply for an ABN | Australian Business Register". Archived from the original on 7 February 2016. Retrieved 10 September 2015.
  12. ↑ "Australian Business Number (ABN) - Information Planet Australia". www.informationplanet.com.au.
  13. ↑ "Format of the ABN". ABN Lookup. November 2014. Retrieved 3 January 2019.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.