Australian Business Number (ABN) system explained
Australian Tax Commissioner Michael Carmody launched a new guide this week to help business to understand the Australian Business Number (ABN) quotation requirements that apply from 1 July 2000 under the Pay As You Go system.
“The latest Tax Office production, ‘Should your suppliers quote their ABN? … a guide for business’ takes a business through the steps it should follow before paying for business related goods or services,” Mr Carmody said.
“Businesses should now be well aware that under the new tax system, the ABN of a supplier should be secured before paying for those goods or services. If not, 48.5 per cent of the payment must be held back and sent to the Tax Office.
“This new one page guide provides the simple steps to follow, including the manner in which a supplier can quote their ABN and what to do if the supplier does not quote an ABN.
The ABN quotation rules only apply to those suppliers who are eligible for an ABN. The guide also acts as a mechanism for other suppliers to state that they are not a business and therefore should not have any amount withheld.
“If the supplier is selling an item in their private capacity, or is providing goods or services that arise through a hobby, they would not be entitled to an ABN,” Mr Carmody said.
“This guide provides these suppliers with a facility to make a statement to the purchaser to avoid having an amount withheld. A similar statement can be made by a non-resident supplier who is not entitled to an ABN.”
The electronic version of the new guide and accompanying statement was made available from Monday 19 June on the Australian Taxation Office website at www.taxreform.ato.gov.au. It can also be obtained from the Australian High Commission in Wellington by emailing a request to firstname.lastname@example.org
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