ABN, TFN, and GST: what your company needs and when
When you register a company in Australia, there are four tax registrations you should consider applying for at the same time: an Australian Business Number (ABN), a Tax File Number (TFN), Goods and Services Tax (GST) registration and PAYG withholding registration.
An ABN is a unique 11-digit number that identifies your business to the government and community. You need an ABN to lodge business activity statements (BAS), claim GST credits, avoid PAYG withholding tax on payments received, and interact with other businesses and government agencies. Virtually every company should apply for an ABN immediately upon registration.
A TFN is a unique number issued by the ATO for tax administration purposes. While companies are not legally required to quote their TFN, failing to provide a TFN to financial institutions means interest and dividend income will be subject to withholding tax at the top marginal rate. There is no cost to apply for a TFN, and it should be obtained at the same time as the ABN.
GST registration is compulsory if the company’s current or projected GST turnover (broadly, the value of its supplies, excluding GST, input-taxed supplies and supplies not connected with Australia) is $75,000 or more, or $150,000 or more for non-profit bodies. A new company that expects to reach the threshold in its first 12 months must register within 21 days. Taxi and ride-sourcing businesses must register regardless of turnover. If your turnover is below these thresholds, registration is voluntary but may be beneficial, particularly if the company makes significant purchases that include GST, as registration allows you to claim input tax credits.
PAYG withholding registration is required if the company will employ staff or make payments to contractors who have not provided an ABN. The company must withhold tax from these payments and remit it to the ATO. PAYG withholding registration should be completed before the company makes its first payment subject to withholding. At CoSec Partners, all four registrations can be bundled with your company registration at no additional cost.
Frequently asked questions
Does a company have to register for GST?
Once current or projected GST turnover reaches $75,000, or $150,000 for a non-profit body, registration is compulsory within 21 days, so a new company that expects to reach the threshold in its first 12 months must register now. Taxi and ride-sourcing businesses must register regardless of turnover. Below the threshold, registration is voluntary. It can still be worthwhile where the company makes significant GST-inclusive purchases, because registration allows those input tax credits to be claimed.
Is a company legally required to have a TFN?
A company is not compelled to quote a TFN, but the consequence of not having one is that financial institutions withhold tax on interest and dividend income at the top marginal rate. Since the application is free and takes minutes alongside the ABN, there is no practical reason not to.
When should a company register for PAYG withholding?
Before making its first payment subject to withholding, which includes wages to employees and payments to contractors who have not quoted an ABN. Registering after the first payment means the company has already failed to withhold, which is a penalty exposure rather than a paperwork delay.
This article is general information only and does not constitute legal, financial, or tax advice. While we endeavour to keep content accurate and current, laws and regulations change frequently. For advice specific to your circumstances, please consult a qualified professional adviser. CoSec Partners Pty Ltd accepts no liability for actions taken based on this content.