Changes to the ABN application process

Posted on 2 June '19 by , under tax.

The ATO has made recent changes to the application process for an Australian Business Number (ABN). The changes have been made as a measure to protect the process’ integrity and identify those who are attempting to misuse it.

An ABN is a unique 11 digit number that identifies your business to the government and the wider community. The recent changes focus on:

  • Ensuring that those who are entitled to an ABN are the only ones who will receive one.
  • Identifying people going through the application process multiple times.
  • Confirming entitlement and helping people to understand their obligations.

You are only entitled to an ABN when carrying on or starting an enterprise in Australia. An enterprise includes activities done in the form of a business, including operating a charity, renting or leasing property, or acting as the trustee of a superannuation fund. It is compulsory for businesses with a GST turnover of $75,000 or more to have an ABN and be registered for GST.

There is no single test to determine cases where you are carrying on a business. However, features of a functioning business include:

  • An intention to make a profit from the activity that is demonstrated by a business plan (unlike a hobby).
  • The activity is a significant commercial activity that is a reasonable size and scale, involving the sale of goods or services.
  • The activity is organised, systemic and is carried on in a business-like manner with records kept.

The ATO’s changes better define who is eligible for an ABN, helping business owners to understand their obligations in cases where there may be doubt. Consider consulting your professional advisor if further help is required.