Why do I need a…ABN TFN GST…?

Yes they are all TLAs (Three Letter Acronyms) but what are they for, and why do I need them?

Tax file number (TFN)

A company (or trust, partnership) needs to apply for a TFN and use it when lodging its annual tax return. Banks will also want this information to avoid collecting a withholding tax on any interest you earn. You can apply for a TFN for the company generally while lodging your ABN application form. Sole traders use their individual TFN in dealings with the ATO. More info here https://www.business.gov.au/info/plan-and-start/start-your-business/business-and-company-registration/tax-file-number

Australian business number (ABN)

An Australian Business Number identifies your business operation for a variety of services/uses in Australia, including:

• confirming your business identity to others when ordering and invoicing
• avoiding Pay as You Go (PAYG) tax on payments you receive
• claiming Goods and Services Tax (GST) credits
• claiming energy grants credits
• obtaining an Australian domain name.

A company registered under the Corporations Act 2001 is entitled to an ABN. In addition any other sort of business structure; sole trader, partnership, trust, estate, super fund can apply for an ABN. A company that is not registered under the Corporations Act may register for an ABN if it is carrying on an enterprise in Australia. Lots more info on this here https://www.business.gov.au/info/plan-and-start/start-your-business/business-and-company-registration/register-for-an-australian-business-number-abn

Goods and services tax (GST)

Goods and services tax, often known as GST, is a broad-based tax of 10% on most goods, services and other items sold or consumed in Australia. You will need to charge the GST and you can claim it back on many inputs into your business.

A company can register for GST if it is carrying on an enterprise. It can do this on the ABN application form. A company must be registered for GST if its annual GST turnover is $75,000 or more. The registration threshold for non-profit organisations is $150,000. There is a calculator here to assist with working out if you will pass the threshold https://www.ato.gov.au/Business/GST/Registering-for-GST/#WorkingoutyourGSTturnover1

If you don’t register for GST you cannot include/collect GST on your invoices. If you discover you will turnover more than the threshold you have 21 days to register.