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February 6, 2023
Are You Still Using Your ABN?
Are you still using your ABN?
Your ABN may be flagged for cancellation if you haven’t reported business activity in your tax return, or there are no signs of business activity in other lodgments or third-party information.
If the ATO identifies your ABN as inactive, they will contact you by email, letter or SMS.
If you:
- still require your ABN, the ATO will explain what you need to do to keep it;
- are no longer in business, no action is required and the ATO will cancel your ABN.
If your ABN has been cancelled and you are still entitled to it, you’ll need to reapply.
You can reapply for the same ABN unless your business structure has changed, for example, if you were a sole trader and you now operate the business through a company.
All ABN holders have a responsibility to keep their business details up to date. This includes cancelling your ABN if your business is no longer operating. You must tell the ATO of any changes to your business details within 28 days of the change.
Tip! Your tax adviser or BAS agent can give you further advice.
Are you changing your business structure?
If you are changing your business structure, for example from a sole trader to a company, you will need a new ABN. Other situations where you need to cancel your ABN and apply for a new ABN include where changing from:
§ individual/sole trader to partnership or trust;
§ individual/sole trader to company or trust
§ partnership to company or trust.
You must ensure that your ABN details are updated on your tax invoices. This is essential as your ABN is used to:
§ identify your business identity to others when ordering and invoicing; and
§ claim GST credits.
Other businesses and entities must withhold payment at the top tax rate if the ABN quoted on the invoice is incorrect or the details do not match up.
Remember to ensure that you update your GST registration details whenever you get a new ABN.
Tip!
Talk to your tax adviser before changing your business structure as there may be significant tax consequences.
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