Australian Business Number
The Australian Business Number (ABN) is a unique Budget identifier issued by the Australian Business Register (ABR) which is operated by the Australian Taxation Office (ATO). The ABN was introduced on 1 July 2000 by John Howard's Liberal government as part of a major tax reform, which included the introduction of a GST.
The law requires each entity that carries on a business in Australia has an ABN and that the ABN appear on each tax invoice and other tax related documents issued by the entity.
Australian Business Register
[edit]The Australian Business Register (ABR) is maintained by the Registrar of the ABR, who is also the Commissioner of Taxation.[1] The Registrar registers entities, issuing them with an ABN,[2] while the Commissioner of Taxation issues the entity a tax file number.
Entitlement to an ABN
[edit]The Registrar issues ABNs only to entities that are entitled to an ABN,[3] which can be:
- an individual,
- a body corporate,
- a corporation sole,
- a body politic,
- a partnership,
- any other unincorporated association or body of persons,
- a trust, or
- a superannuation fund.[4]
For an entity to be entitled to an ABN, it must:
- carry on an enterprise in Australia,[5] or
- carry on an enterprise that makes supplies connected with Australia,[6] or
- be a company registered under the Corporations Act 2001 (Cth).[7]
Whether or not an entity is carrying on an enterprise is a question of fact and there are many circumstances where an entity will be carrying on an enterprise. Without being exhaustive, an entity will be carrying on an enterprise if it:
- is in the form of a business,
- leases property,
- is a religious institution,
- is a superannuation fund,
- is an arm of the government, or
- is a charity.[8]
The Registrar can refuse an entity's application to be registered.[9] Equally, the Registrar can cancel an entity's registration and thus their ABN.[10] Each of these decisions are reviewable taxation decisions.
Applying for an ABN
[edit]An entity can apply for an ABN:[11]
- online through the Australian Business Register portal,
- using the services of a registered tax agent, or
- lodging a paper-based application with the ATO.
Before applying for an ABN the entity must have a tax file number (TFN).[12]
Format
[edit]The ABN is an 11-digit number where the first two digits are a checksum. Unlike with the tax file number (TFN), the ATO has publicised the formula for checking and creating valid ABN checksums.[13] Also, the nature of the ABN algorithm means that any 9-digit number can be made into a valid ABN.
Checksum Method and Verification
[edit]The Australian Business Number (ABN) is a unique 11 digit identifier issued to all entities registered in the Australian Business Register (ABR).
The 11 digit ABN is structured as a 9 digit identifier with two leading check digits. The leading check digits are derived using a modulus 89 (remainder after dividing by 89) calculation.
To verify an ABN:
- Subtract 1 from the first (left-most) digit of the ABN to give a new 11 digit number
- Multiply each of the digits in this new number by a "weighting factor" based on its position as shown in the table below
- Sum the resulting 11 products
- Divide the sum total by 89, noting the remainder
- If the remainder is zero the number is a valid ABN
For example, to check if 51 824 753 556, the ABN of the Australian Taxation Office, is a valid ABN:
- Subtract 1 from the first (left-most) digit (5) to give 41 824 753 556
- Multiply each of the digits in 41 824 753 556 by the "weighting factor" based on its position as shown in the table below
- Sum (Digit * weight) to give a total of 534
- Divide 534 by 89 giving 6 with zero remainder.
- As the remainder is zero, 51 824 753 556 is a valid ABN.
| Digit | Position | Weighting | Digit * weight |
|---|---|---|---|
| 4 | 1 | 10 | 40 |
| 1 | 2 | 1 | 1 |
| 8 | 3 | 3 | 24 |
| 2 | 4 | 5 | 10 |
| 4 | 5 | 7 | 28 |
| 7 | 6 | 9 | 63 |
| 5 | 7 | 11 | 55 |
| 3 | 8 | 13 | 39 |
| 5 | 9 | 15 | 75 |
| 5 | 10 | 17 | 85 |
| 6 | 11 | 19 | 114 |
| Total: | 534 |
See also
[edit]References
[edit]- ↑ Section 28 of the A New Tax System (Australian Business Number) Act 1999 (Cth).
- ↑ Section 11 of the A New Tax System (Australian Business Number) Act 1999 (Cth).
- ↑ Section 8 of the A New Tax System (Australian Business Number) Act 1999 (Cth).
- ↑ Subsection 184-1(1) of the A New Tax System (Goods and Services Tax) Act 1999 (Cth).
- ↑ Paragraph 8(1)(a) of the A New Tax System (Australian Business Number) Act 1999 (Cth).
- ↑ Paragraph 8(1)(b) of the A New Tax System (Australian Business Number) Act 1999 (Cth).
- ↑ Subsection 8(1) of the A New Tax System (Australian Business Number) Act 1999 (Cth).
- ↑ Section 9-20 of the A New Tax System (Goods and Services Tax) Act 1999 (Cth).
- ↑ Section 13 of the A New Tax System (Australian Business Number) Act 1999 (Cth).
- ↑ Section 18 of the A New Tax System (Australian Business Number) Act 1999 (Cth).
- ↑ "Apply for an ABN | Australian Business Register". Archived from the original on 7 February 2016. Retrieved 10 September 2015.
- ↑ "Australian Business Number (ABN) - Information Planet Australia". www.informationplanet.com.au.
- ↑ "Format of the ABN". ABN Lookup. November 2014. Retrieved 3 January 2019.
