An Australian Business Number (ABN) is a unique 11-digit number that identifies businesses in Australia and is used for various tax and business purposes. ABNs are issued by the Australian Business Register (ABR), which is managed by the Australian Taxation Office (ATO). The ABN system was introduced in July 2000 as a part of the Australian Government’s tax reform agenda, which included the introduction of the goods and services tax (GST).

The ABN represented a big step in streamlining Australia’s taxation and business regulation systems—the country had over 2.5 million actively trading businesses as of June 2023. Before the ABN system, businesses in Australia had to use multiple identification numbers for different government departments and agencies, which was a complex and inefficient system. The ABN system was designed to simplify these interactions, making it easier for businesses to interact with the government.

The ABN serves several purposes. Businesses identify themselves via their ABN in dealings with both the government and other businesses, improving business efficiency by providing a unique identifier through which business details can be confirmed. Businesses also use their ABN to register for the GST and to lodge income tax returns, simplifying the tax filing process. Having a single business identification number has simplified several business transactions across Australia.

This guide will cover what businesses in Australia need to know about why ABNs are useful, when they should apply for one, and what that application process looks like.

What’s in this article?

• When would a business need an ABN?
  
• How do businesses apply for an ABN?
  
• Possible outcomes after you apply for an ABN
  

When would a business need an ABN?

If you’re a business in Australia, it’s generally always a good idea to get an ABN even if the business is small or part time. An ABN makes your business look more professional, allows you to access certain benefits, and simplifies your tax reporting. Businesses that want to register for GST, want to deduct business expenses from their income tax, or want to register for a “.au” domain name require an ABN to do so.

Businesses will need to apply for ABNs if their annual turnover exceeds $75,000 (before GST) and they consequently are required to register for GST, or if they receive payments from other businesses that require an ABN. Instances where Australian businesses will need to have ABNs are outlined below.

• Sole traderships: If you’re operating as a sole trader, you generally need an ABN if you are required to register for GST (i.e., if you expect your annual turnover to exceed $75,000, before GST), if you want to register a “.au” domain name for your business website, or if you want to access other business benefits such as certain grants or discounts.
  
• Partnerships: Partnerships are required to apply for an ABN to use for all of its business activities.
  
• ASIC companies: All companies registered with ASIC automatically receive an Australian Company Number (ACN), which businesses can use to apply for an ABN.
  
• Companies that offer specific services: Some business services such as taxi driving require you to register for GST regardless of your turnover, and therefore necessitate an ABN.
  

How do businesses apply for an ABN?

Getting an ABN for your Australian business is straightforward. The ATO and ABR websites offer comprehensive information and resources to guide you through the ABN application process, and if you have any confusion about what’s required, you can consult a registered tax or business activity statement (BAS) agent for guidance. Professional help may be particularly useful if you have a complex business structure.

The ABN application process is outlined in detail below.

• Check your eligibility: First ensure your eligibility for an ABN. The Australian Business Register’s website offers helpful information to determine your eligibility, so check this first to avoid unnecessary applications and any potential legal repercussions. You may face legal action if you apply for an ABN, register for GST, and claim GST credits when you’re not eligible. Remember that you’ll generally need an ABN if you carry on business activities (even part time), if you are required to register for GST (i.e., your expected annual turnover exceeds $75,000, before GST), if you want to register for a “.au” domain name, or if you receive payments from other businesses requiring an ABN.

• Gather necessary information: To apply, you’ll need documents and details handy including personal details such as your full name; date of birth; residential address; and contact information, as well as business information such as your legal name; business structure (sole trader, partnership, company); commencement date; business activities; and estimated annual turnover. Certain business structures will require the submission of your associates’ information as well, such as the partners in a partnership or directors in a company, and you should verify your business structure’s specific requirements before beginning the application. You’ll typically also need to submit proof of identity such as an Australian passport, driver’s license, birth certificate, or Medicare card.

• Choose your application method: You can apply for your ABN online in one of two ways. If you already have a myGovID account linked to your Australian Taxation Office (ATO) profile, the quickest and easiest option will be applying through myGovID. You can also apply directly through the Australian Business Register (ABR) website, but you’ll need to create an ABR account first.

• Complete the application: Follow the prompts on your chosen platform, accurately entering the gathered information. Double-check all details before submitting the application to avoid potential delays or rejections due to inaccuracies. Once satisfied, submit your application.

• Review application response: If your application is successful, you’ll receive your 11-digit ABN and a confirmation document immediately, which you should print or save for future reference. If the application needs to be manually reviewed, you’ll need to track your application status over the next few weeks, regularly checking your email, spam folder, and the ABR website. If the ABR requests additional information, provide it promptly to expedite the process.

• Verify ABR details: Once your ABN is assigned, your details will be added to the ABR. You can request privacy options for certain business information if needed, and you should keep the ABR updated with any changes to your business information, structure, or contact details.

• Determine GST obligations: Obtaining an ABN doesn’t automatically mean you need to register for GST. Research your obligations based on your expected turnover and activities.

Possible outcomes after you apply for an ABN

There are a few possible outcomes after submitting an ABN application, each with a different processing time. If your application is electronically approved, both myGovID and the ABR website will send your 11-digit ABN immediately upon completion. If your application requires further verification or additional information is needed, the Australian Business Register will need to manually review it, which can take up to 20 business days and potentially longer for complex cases. After manual review, the application may be either rejected or approved. Applications submitted during holidays may also experience further processing delays due to limited staffing.

The potential outcomes after submitting an ABN application are outlined below.

• Immediate approval: This is the most desired outcome, where your application is instantly processed and verified. You’ll receive your 11-digit ABN immediately along with a confirmation document, and you can start using your ABN right away for relevant purposes like claiming GST, registering for taxes, or accepting payments.

• Manual review: If your application requires further verification or additional information, it will be flagged for manual review and you’ll receive a reference number and notification indicating this. The ABR may need to manually review your application if it cannot confirm your identity based on the provided documents, if your application is missing important information, or if your business structure is complex or unusual. The ABR will contact you if it needs further details during the review process. If you don’t receive any updates on your application within the expected time frame, consider contacting the ABR for clarification, and note that you may be able to access certain services associated with ABN even during a “Pending” application status by providing your reference number.

• Approval after manual review: If the ABR successfully verifies your information during their manual review, you’ll receive your ABN in the same way as with immediate approval. You can then use your ABN as usual.

• Rejection after manual review: In rare cases, your application may be rejected if the provided information is inaccurate, incomplete, or doesn’t meet eligibility requirements. The ABR will provide detailed reasons for the rejection via email and on its website. You can choose to rectify the issues and reapply or seek professional help for addressing the concerns.