Summarise with AI
What an ABN is for
An ABN is your business's identity for tax and dealings with government and other businesses. With one you can:
- Identify your business to the ATO and on your invoices
- Register for GST and other tax roles
- Claim GST credits and energy grants where eligible
- Avoid having 47% withheld from payments to you (see below)
ABN and GST
An ABN and GST registration are related but separate. You need an ABN first; GST registration is a role you add to it. GST becomes compulsory once your GST turnover reaches $75,000, and your ABN must appear on the tax invoices you issue so customers can claim their GST credits. Businesses also lodge GST and PAYG through the BAS tied to their ABN.
No ABN: the withholding rule
If a business supplies goods or services and doesn't quote an ABN on the invoice, the payer generally must withhold 47% of the payment and send it to the ATO — the "no ABN withholding" rule. It's why quoting your ABN on every tax invoice (including a recipient created tax invoice) matters.
Key takeaways
An ABN is your business's unique 11-digit identifier — needed to register for GST, required on your tax invoices, and used across your dealings with the ATO. Without an ABN on an invoice, the payer may have to withhold 47%. An accountant or bookkeeper can help you set up your ABN and GST correctly.
