:) Hi thank goodness some aussies I can talk to.I am new to all this so just wanted to say then first posting about readnotify.com was a great piece of info.Secondly to you both find that you can import items in Oz without having an ABN number.I just want to sell on ebay for a bit of extra cash and wondered if I had to declare anything to the tax dept or have the ABN
Any advice would be great
Thanks Tracie
You don't have to have an ABN for a bit of hobby selling. If you aren't in a fully fledged business you still have to declare your earnings to the ATO when you do your yearly tax. The ATO's rule of thumb is that any income you earn - whatever the source - is declared somewhere/somehow in your tax return. If you won Tattslotto tomorrow, you'd also have to account for that, too.
Most of the overseas suppliers that I've been contacting over the past month or so don't really worry about internationals being a registered business. I have come across a couple who won't sell to you unless you have a resell licence (or some sort of equivalent in your own country). I find this frustrating because we don't have them, we only have the ABN requirement, so how do you give them something your country doesn't even issue? In these circumstances, I find the ABN useful, as I will explain that and provide the business with my legal ABN. I haven't come across any that won't accept that. After all, they can always look me up on the register and check. or I can always fax over a copy of my certificate issued by the Australian government if they need proof.
The ABN application has a number of questions that help you determine whether you're really in business or whether you're selling as a hobby. However, the point at which you move from hobby to business isn't always clear cut. My accountant said I was borderline between hobby selling and a business, and that I could legally go either way at the moment - until I start making a lot more income with it. If you're currently hobby selling but it grows into a fully fledged business, you can apply for an ABN at that particular time.
Eventually I decided to register as a legitimate business, even though I won't really be really up and running properly or earning consistently for a couple of months because there are businesses that won't deal with you unless you do, and it also gives me a legitimate presence in the business world. Also, in Australia, if you are conducting business with other businesses and you don't have an ABN, the other businesses you deal with can charge you tax at the highest possible taxation rate. And that's not just suppliers - you can conceivably deal with overseas suppliers without that - but also applies to any B2B transaction you make.
I would ask your accountant about the ins and outs because some of the stuff in the ABN application looks like its written in another language. If you do get to the point where an ABN becomes inevitable, it doesn't cost you anything to get an ABN or nominate a trading name, anyway, and if your situation changes you can always cancel the ABN when you don't need it anymore. It's only registering an ACN (company name) as well as an ABN that costs money, but you don't need to have that, because you nominate a name that you trade under in the ABN application. In the business register, I am listed as a sole trader trading under the business name of Savvy Trading. I haven't paid for an ACN and company name, but it doesn't matter, because Savvy Trading is my legal business name. It's confusing! Probably because the ACN system was around before they brought in the ABN stuff.....
You don't have to opt into the GST system if you're earning less than $50,000 per year from your venture. If you do, you can get GST credits, and the GST is passed onto your customers. If you don't, you pay the 10% GST on all taxable items. If you do opt in to the GST system, you have to stay in it for a certain period of time before you're allowed to drop out. But then you are obliged to provide proper tax invoices to customers. My accountant said it would be better to wait at this stage of my business.
Unless you are a fully fledged company with employees, you would most likely be registered as a sole trader. There are a number of different business structures that you can choose from apart from these 2 options. Again, the ABN application form explains it all.
The down side is that accountants charge you more to do your tax, but just like personal tax, you can claim back 100% of your tax agent's fees in the following financial year.
More information to help you decide whether you need an ABN or not can be found at the following link:
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