This article is for informational purposes only and does not constitute legal, personal, or tax advice. The information contained herein is subject to change and may vary from time to time. For specific advice applicable to your business, please contact a professional.

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What is a Tax File Number (TFN)?

A tax file number is a unique 9-digit number issued to individuals and organisations, to allow the ATO to identify you and make sure you’re paying the right taxes, pay as you go (PAYG) withholding and superannuation.

Why is a Tax File Number (TFN) important?

It’s an important part of your tax identity, and the number you’re given is yours for life whether you move, change jobs, head overseas or alter the nature of your business.

While it’s not compulsory to have a tax file number, in practice most working individuals and businesses in Australia do because it’s much harder to do certain things without one:

• You can’t file your tax return electronically with the ATO, making it harder to pay the right taxes and claim back any money you might be owed from the government

• If you want to start your own business, you won’t be able to apply for an Australian Business Number (ABN)

• You can’t change jobs easily without one

• You won’t be able to access certain government benefits

Types of TFN required for different businesses

If you’ve ever worked in Australia, then chances are you already have a number for tax purposes. And if you run your business as a sole trader, then your tax file number is used for both individual and business dealings. A company, partnership or trust will require a separate TFN. Applying for a TFN is free.

Once you’ve registered for a TFN you can give it to:

• Bodies responsible for paying interest, dividends and unit trust distributions

• Government bodies including the ATO so you can file company tax returns online

• Employers (if you’re an individual)

Individual TFN registration

If you’re self-employed or intend to operate as a sole trader you’ll use your personal TFN when filing returns with the ATO. If you don’t have one, you can apply for an individual TFN. The way you apply is dependent on your resident status:

• Australian residents with a passport – Use the online service myGovID to apply. The service is open to any passport holder aged 15 years or older. You must also have at least one other identity document, such as a driver’s licence. The whole process shouldn’t take long, and you usually receive electronic confirmation within 12 hours, with the official notification sent by post 10–28 days later.

• Australian residents without a passport – You can’t use the online service but you can submit the online form along with your identity documents at Australia Post. You can also apply at a Services Australia Centre or by post.

• Foreign passport holders, permanent migrants and temporary visitors – To apply, use Individual Auto Registration (IAR). You also need a valid visa to work.

• People living outside of Australia – If you don’t live in the country but you receive an income from an Australian source, you may need to apply for a tax file number to claim a refund on any tax withheld on interest from an Australian bank account or share dividends.

Company TFN registration

If you operate your business as a company, it is considered a separate tax-paying entity by the taxation office, and you need to apply for a business TFN through the Australian Business Register.

You can apply for a TFN for your company through the Australian Business Register at the same time as you apply for an Australian Business Number.

You may need to provide certain information depending on your circumstances, including:

• Australian Company Number (ACN) or Australian Registered Business Number (ARBN)

• Physical business locations

• Authorised contacts

• Any associate’s details, including name, date of birth and TFN

• Business activity

Either make the application yourself or have a registered tax agent do it on your behalf.

Partnership TFN registration

A partnership isn’t a separate legal entity like a company but must have its own TFN, ABN and lodge annual partnership tax returns. The partnership in its own right must lodge a tax return and individual partners must lodge personal returns. The partnership doesn’t pay income tax on any profits from the partnership, rather the individual partners list their share of partnership profits or losses on their own tax return.

If you decide to run your business this way you can apply for a partnership TFN in the same way as you would for a company.

Trust TFN registration

If you operate a trust you will also need to apply for a separate trust TFN. The trust TFN is distinct from your individual TFN whether you’re a trustee or beneficiary.

Australian Business Number

If you operate a business, then at the same time as you register for the TFN you can apply for your ABN. It isn’t a replacement for a tax file number, but rather an additional 11-digit number which identifies you to customers and the government. Use it to:

• Identify your business to customers and suppliers

• Claim PAYG credits

• Claim goods and services tax credits

• Use an Australian domain name

• Claim energy credits

Registering for a tax file number is thankfully a relatively straightforward process. It might not be the most exciting step you’ll take for your business, but it is an important one. By making sure you’re registered now, you’ll make your life much easier when it comes to filing taxes and paying the right amount.

Useful resources to help you register a tax file number

1. For individuals visit the Australian Taxation Office website for further information

2. Learn more about making an application through Australia Post.

3. Visit the Australian Business register for advice on registering as a business

4. For further information on making a postal application and what ID is accepted visit the Australian Taxation Office webpage