The Australian business number (ABN) is a unique 11 digit identifier. This number makes it easier for all levels of government and businesses to interact.
Is it compulsory to have an ABN?
It is not compulsory to have an ABN.
Why is an ABN useful?
* There are tax benefits to having an ABN. Primarily, businesses with an ABN can avoid other businesses having to withhold 48.5% from payments made.
* Many businesses will not deal with a business that does not have an ABN.
* Having an ABN shows that you are a serious business, as there are Federal Government eligibility requirements to secure an ABN.
* Having an ABN also makes it easier for other businesses to ascertain your details for ordering and invoicing.
* If you want to operate within GST (Goods and Services) system, you will need to have an ABN.
Once you have an ABN you will need to place your ABN on your invoices. In this way they will become “tax invoices”.
Examples of when you will use your ABN:
* When dealing with government agencies.
* When supplying goods and services to other businesses.
* When dealing with the ATO.
* For an activity statement when you want to offset your taxation obligations.
* If you want to be endorsed as a tax concession charity.
* If you want to be endorsed as an income tax exempt fund.
* To show that you are a registered Australian business. This builds credibility and trust when dealing with other businesses.
