If you run your business in Australia, you may need to apply for an Australian Business Number (ABN), a Tax File Number (TFN), and register for other taxes. You may have to register for goods and services tax and other taxes based on the type of business you are operating. If any of these taxes apply to you, you must register for them. If you are applying for an Australian Business Number (ABN), you can register for taxes, such as Pay As You Go (PAYG) withholding and GST, at the same time (if you are liable to).
When you start a business
When you start a business in Australia, you are liable to apply for an Australian Business Number (ABN) and a Tax File Number (TFN). Additionally, you may also need to register for:
- Goods and services tax (GST)
- Pay As You Go (PAYG) withholding
- Fringe Benefits Tax (FBT).
These other registrations completely depend on the type of business you run.
Applying for a TFN
All businesses in Australia are required to have a TFN. If you run your business as a sole trader, you are allowed to use your personal TFN. For other business structures, you can receive a TFN when you apply for an ABN.
Getting an ABN
An ABN is the number used by businesses when dealing with other businesses, the government, and the ATO. You are required to get an ABN to operate in the GST system and apply to claim GST credits. You are required to include it on your invoices. If you fail to do so, other businesses will withhold tax at the highest rate from any payments they make to you. To get an ABN:
- Apply online through the Australian Business Register
- Apply through registered BAS agents or taxation accountants.
When you apply for an ABN, you can register your business name and taxes like PAYG withholding and GST at the same time. In case your business details change, such as address or contact details, you need to advise the ATO within 28 days.
Your Business Structure
When you start a business in Australia, you must choose a business structure. There are primarily four main ways businesses are set up in Australia – partnership, sole trader, company and trust, and each one comes with different tax responsibilities. A sole trader is a simple business structure and easy to set up. Many businesses decide to choose a sole trader business structure. However, you must choose what’s ideal for you. The structure you choose can later on affect things like how debts are treated and the tax you pay. You can also change the structure later if you want to. If you need help to decide which business structure will be right for you, you can take advice from a registered tax professional or a reliable business accountant Melbourne.
If you plan to operate your business as an Aboriginal and Torres Strait Islander corporation, you must register your corporation with the Office of the Register for Indigenous Corporations (ORIC). If you plan to operate your business through a company, you must register your company and get an Australian Company Number (ACN). When you start your company, you do this with ASIC. You need to receive your ACN before you can get your ABN and tax registrations.
Getting a Director Identification Number
You must have a director identification number (director ID) if you want to be a director or are already a director of:
- An Aboriginal and Torres Strait Islander corporation registered under the Corporations Act 2006 (CATSI Act).
- A company, a registered Australian body or a registered foreign company under the Corporations Act 2001.
Registering Your Business Name
Most businesses are required to apply for a registered business name with the Australian Securities & Investments Commission (ASIC). You don’t need to do this if you use your own name as the business name. To apply for a registered business name, you need to have an ABN or be applying for one.
Conclusion
The blog shares information on common business structures and registration requirements for businesses in Australia. For more information on business structure and tax obligations, you can get in touch with Reliable Melbourne Accountants.