tax-468440_1280Tax registrations required to trade in Australia

By Chris Warrick, Beachhead Management

As well as incorporating your Australian Proprietary Limited company, if you wish to trade in Australia, you will need to separately register with the ATO (the Australian Tax Office) for one or more of the following registrations:

  • an ABN (Australian Business Number, typically your Australian Company Number prefaced with two extra digits - registered with the Australian Business Register on behalf of the ATO)
  • GST (Goods & Services Tax)
  • PAYG (Pay-As-You-Go, an employee income tax withholding system)
  • TFN (Tax File Number)
  • FBT (Fringe Benefits Tax)

Typically, the online process of applying for an ABN will allow the applicant to simultaneously register for the latter account extensions or tax registrations. It will also allow you to register for an AUSkey, a separate identifier which allows you to transact and update your details online with the ATO, ASIC and a wide variety of other government institutions.

Tax Acronyms & Argot Explained

There is a plethora of TLAs (Three Letter Acronyms) used in business, globally and in Australia, and nowhere more so than in dealing with government and the ATO in particular.  We set out below a brief glossary of terms and a succinct business person's definition:

Acronym / TLA Term Definition Administering Authority Key Link
ABN Australian Business Number An ABN is an identifier for dealing with the ATO and other government departments and agencies. An ABN can be given to individuals, partnerships, companies, trusts, &tc. ASIC
for ABR
ABR Australian Business Register A public register which contains details of all ABN registrations. In registering an entity under the ABR, the registrar will allocate an ABN to the entity and record the applicant's details on it. ABR
ACN Australian Company Number Issued by ASIC on incorporation of an Australian incorporated entity. ASIC ACN
APRA Australian Prudential Regulation Authority An Australian Government agency which regulates super funds and other bodies in the financial sector, making sure they operate within the requirements of retirement income legislation. APRA
ARBN Australian Registered Body Number The Australian Registered Body Number (ARBN) is a nine digit number allocated by the Australian Securities and Investments Commission (ASIC) when a foreign company or registrable Australian body is registered under the Corporations Act 2001. ASIC ARBN
ASIC Australian Securities & Investment Commission The Australian Government organisation which incorporates and collects information on public and private companies and other corporate bodies registered under the Corporations Law in Australia. ASIC
ATO Australian Tax Office The Australian Taxation Office (ATO) is an Australian Government statutory agency and the principal revenue collection body for the Australian Government. ATO
BAS Business Activity Statement Businesses registered for GST use this single form to report their business tax entitlements and obligations, including GST, PAYG instalments, PAYG withholding and FBT instalments. You can offset tax payable against tax credits to arrive at an assessed net amount. ATO BAS
BAS Agent BAS Agent A registered person for business activity statement (BAS) service purposes, hired to help a person with advice, preparation and/or lodgement of their BAS. ATO
CGT Capital Gains Tax A tax on the profit obtained when selling an asset. ATO
FBT Fringe Benefits Tax Tax payable on a non-salary benefit provided to an employee. ATO FBT
Franking Credit Franking Credit Franking credits are income tax credits that a corporate tax entity can pass on to its members. Franking credits are credited in a corporate tax entity's franking account. A franking credit arises when a corporate tax entity does any of the following:
â—¦makes a payment of a PAYG instalment or income tax
â—¦receives a franked distribution
â—¦incurs a liability for franking deficit tax.
FTE Full Time Equivalents The quantum of full and part-time staff measured as ratio of full-time employees. N/A
FYE Financial Year End The standard Financial Year in Australia is from 1st July to 30th June. N/A
GST Goods & Services Tax The GST is a broad-based tax - currently set at 10% - on most supplies of goods and services consumed in Australia. ATO GST
IAS Instalment Activity Statement A form similar to the BAS but without GST and some other taxes. Businesses that are not registered for GST, and individuals who are required to pay PAYG instalments or PAYG withholding use this form to pay PAYG. ATO
ITC Input tax credit Input tax credit (ITC) is the GST that has been paid on business inputs. ATO
LAFHA Living Away From Home Allowance A tax concession benefit accorded to individuals who are living away from home as a result of their employment. ATO
PAYG Pay-As-You-Go A single, integrated system for reporting and withholding amounts of tax on business and investment income. ATO PAYG
SG Super Guarantee Contributions The amount an employer must contribute to super on behalf of their eligible employees. The rate is currently equal to 9.5% of an employee's ordinary time earnings and will be gradually increased to 12% by 30 June 2020. ATO
SGC Super Guarantee Charge A charge imposed on employers who do not make the minimum super guarantee contributions required on behalf of their eligible employees. ATO
TFN Tax File Number A unique number issued to individuals and organisations to administering tax and other Commonwealth Government systems. ATO TFN
WET Wine Equalisation Tax The WET is a value based tax levied on wine at a rate of 29% on the last wholesale sale. ATO WET

For an even deeper dive into these and even more arcane argot used at the ATO, please click through to ATO Definitions. 

Public Officer Responsibility

All locally-incorporated companies and foreign-incorporated companies registered in Australia as an ARBN must appoint a Public Officer to represent the company in its formal dealings with the ATO.  This is separate from any individuals or companies who may deal with the company's tax affairs as an accountant or registered tax or BAS agent.  The individual must be an Australian resident and must meet certain criteria.

More Info:

Specialist Contributor:  Chris Warrick, Beachhead Management

Chris is a specialist in establishing and growing companies through all stages of the corporate life cycle; he has direct experience of sourcing capital, working with founders and other stakeholders, building & motivating teams, moving companies to the next level and, ultimately, achieving a timely and profitable exit. Beachhead Management assists inward investing SME companies from all over the world establish and grow their operating presence in Australasia.  More information.