Tax File Number (TFN) and Australian Business Number (ABN) what they are for and why you need them.
What’s the Difference Between a TFN & an ABN
When you move to Australia, you have two options when it comes to employment – you either work for someone else as an employee, or you open a business and work for yourself. Many people tend to work for a business as an employee as it is the most straightforward method, but if you have a great business idea or you become a freelancer or drive for Uber, for example, there are some differences you need to consider.
TFN or ABN – what’s the difference?
A TFN is a Tax File Number which registers you into the tax system in Australia. You need this number whether you work for someone else or run your own business. This number allows you to file a tax return at the end of the financial year.
An ABN is an Australian Business Number and in a similar way that your TFN registers you into the tax system, an ABN allows your business to be identified to the government and community. It is also used for some tax purposes. Applying for an ABN is free, however, if you are not entitled to one because you aren’t carrying on a business, your application may be refused.
You can register a business name at the same time as registering for an ABN, so make sure you have everything prepared to go including a couple of business name options in case your first choice is taken. You can use the ABN Lookup website to search for your chosen business names; this will help you see if the name is available.
How to Apply for a TFN
You can apply for free a tax file number online through the Australian Taxation Office (ATO). As a non-citizen, you do need to meet some conditions which include:
- Being a foreign passport holder, permanent migrant or temporary visitor
- Already be in Australia (you can’t apply before you arrive)
- Have a visa in the following categories:
- Permanent migrant visa
- A visa with working rights
- An overseas student visa, or
- A visa allowing you to stay in Australia indefinitely
You will need a valid passport and travel documents to apply and your tax file number will be sent out to your address within 28 days. Once you have received your tax file number, you can start to look for employment.
How to Apply for an ABN
Applying for an ABN is a little more complicated than applying for a TFN and requires some more preparation to ensure you have all the required documents at hand. There is a range of documents you require and it is easier to have a TFN before you apply for an ABN. Some documents you may need include your foreign birth certificate, foreign passport, government identification, national photo identification or driver’s license.
You can apply for your ABN through the Australian Business Register website. Because the process can be long, make sure you take the time to read through all the requirements and get help if you need it. Remember that you will need both your TFN and an ABN before starting your business.
If you aren’t planning on working or opening a business while in Australia, you won’t need to worry about applying for either a TFN or an ABN. Unsure if you will be obtaining some work while you study or travel? It’s always best to have a TFN set up and ready to go. This ensures you can get work and be paid without any issues.
If you have any trouble understanding how to apply for a TFN or an ABN, we can assist you. Make sure you get in contact with us so that we can provide you with the information quickly and get you on your way.
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Abdullah Mohammad says
I am coming to Australia on 18th February 2023 with a business migration visa 188A. I plan to stay 15 days to complete first entry. I wanted to apply for business bank account during my stay. But I am worried as from internet it seems TFN takes long time to arrive. Without it I cannot apply for business number.
Is there any advise which you can give me? Also I have to open Bank account both personal and business. I was nominated by Queensland State and I plan to stay in Brisbane.