Is the entity entitled to an ABN?

Companies, partnerships, trusts and other organisations

Not all entities are entitled to an Australian business number (ABN). To be entitled to an ABN the entity must meet either criterion 1 or criterion 2.

Criterion 1

The entity is entitled to an ABN if it is:

a company incorporated under the Corporations Act 2001 (Cth) in Australia, or
a charitable institution or trustee of a charitable fund in Australia, or
a deductible gift recipient in Australia, or
a religious institution in Australia, or
a superannuation fund, or
a government entity.

Criterion 2

The entity is entitled to an ABN if it can answer ‘Yes’ to the following statements:

its activity is carried out in the:

form of a business
nature of trade, or
form of a regular or continuous grant of a lease, licence or interest in property

its activity is carried out in Australia or it makes supplies that are connected with Australia
its activity is not a private recreational pursuit or hobby.

And for partnerships where all or most of the partners are individuals:

there is a reasonable expectation of a profit being made.

If the entity does not meet criterion 1 or 2 it is not entitled to an ABN.

Individuals (sole traders)

If you are an individual applying for an ABN, you should check your entitlement to register here.

You are entitled to an ABN if all of the following statements are true.

Your activity is carried out in the:

form of a business
nature of trade, or
form of a regular or continuous grant of a lease, licence or interest in property.

Your activity is carried out in Australia or you make supplies that are connected with Australia.
You have a reasonable expectation that a profit will be made from your activity.

You are not entitled to an ABN if any of the following statements are true.

Your activity is carried out as an employee or in connection with earning payment as a company director, office holder or under a labour hire arrangement.

[An employee is a person who receives a salary or wage in return for work or services rendered.

You are not considered an employee for ABN registration purposes if you have your own business but also receive a salary or wage from an activity related to your business.]

Your activity is a private recreational pursuit or hobby.
Your activity is conducted as a member of a local government body, for example, as an elected member of a city, town or shire council.

The following examples will also assist you to determine your entitlement to an ABN:

Is a non-trading company entitled?

Yes. Under A New Tax System (Australian Business Number) Act 1999 (ABN Act), a body registered as a company under the Corporations Act 2001, even if it is non-trading, is entitled to have an ABN.

Is a company in liquidation, receivership, administration or controlled by another party entitled?

Yes. Under the ABN Act, a company registered under the Corporations Act 2001, even if it is an incapacitated entity is entitled to have an ABN.

Is a bankrupt (individuals only) entitled?

Yes. Individuals are entitled to an ABN providing they are carrying on an enterprise in Australia subsection 8(1) ABN Act.

For trustees appointed to administer bankrupt individuals on or after 1 April 2002, the trustee will no longer be able to use the ABN of the individual. They will have to apply for a new ABN which will be used for all matters arising under the administration.

Is a non-resident entity of Australia entitled?

There are circumstances where a non-resident entity can have an ABN. An example of this is when making supplies connected with Australia in the course of carrying on an enterprise. The main difference is in providing the evidence of identity (EOI) of a non-resident entity, as the entity behind the ‘entity’ can’t always be established. Further information may be required before a non-resident can be registered for an ABN. The Registrar will contact you if further information is required.

Information about the type of documents that may be required can be found on the Tax Office website.

Are joint ventures entitled?

Some joint ventures will not involve the establishment of a separate entity. These non-entity joint ventures are not eligible to apply for an ABN.

Non-entity joint venture means an arrangement that the Registrar is satisfied is a contractual arrangement:

under which two or more parties undertake an economic activity that is subject to the joint control of the parties; and
that is entered into to obtain individual benefits for the parties, in the form of a share of the output of the arrangement rather than joint or collective profits for all parties.

Certain joint ventures, however, can apply to be GST joint ventures. Each application will nominate an entity to be the joint venture operator. The joint venture operator is then liable for the GST on any taxable supplies and is entitled to the input tax credits on any creditable acquisitions made by the joint venture operator on behalf of the joint venture participants arising out of the activities for which the joint venture was entered into.

If you want to discuss entitlement to an ABN, phone the Tax Office on 13 28 66 between 8.00am and 6.00pm, Monday to Friday.