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What is a TFN in Australia

Understanding what identification numbers are in use in Australia is crucial for those planning to conduct business in the country. TFN is one of the most vital numbers, and it's essential to have a clear picture of its significance. In this article, we aim to explore what is a TFN, who needs to obtain it, and how to do so.

What is a TFN in Australia

Posted 6 November 2023

Summary

Australian Taxation Office (ATO)

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Understanding TFN

TFN stands for Tax File Number. It is a personal identification number used in the Australian taxation and pension systems, assigned by the Australian Taxation Office (ATO).

ATO issues TFNs to all taxpayers, including individuals, companies, partnerships, pension funds or trusts. However, not all entities are required to have a TFN. It’s crucial to understand that without a TFN you may end up paying more taxes, won’t be able to file tax returns online, apply for government benefits, and, most importantly, you won’t be able to obtain an Australian Business Number (ABN).

Once issued, the TFN remains the same even if your name changes or you move to another country.

Basis for obtaining a TFN

The TFN serves several essential purposes:

  • It allows your identification within the taxation and pension systems;
  • The TFN is a crucial part of your tax identity;
  • It enables you to pay fewer taxes, apply for benefits and pensions, obtain an ABN for a registered business or a foreign enterprise making supplies in Australia;
Interesting:

In case the payee doesn’t have a TFN, the payer is legally required to withhold tax at the source (with a maximum rate of 47%), which will be later reflected as the “TFN amount.” The taxpayer must file an income tax return to get the withheld tax amount back.

  • You cannot work in Australia without a TFN;
  • A foreign entity planning to make supplies in Australia cannot do so without an ABN, which, in turn, requires a TFN.

Therefore, whether or not to obtain a TFN is a personal decision, but it’s a fact that a TFN makes life in Australia way easier.

Procedure of obtaining a TFN

The procedure of obtaining a TFN depends on the category of individuals who require it. The process varies depending on the following groups:

  • Foreign citizens residing in Australia, migrants, and temporary visitors: to obtain a TFN, you must reside in Australia and have a valid passport and a basis for being in Australia, usually a visa;
  • Foreign residents not living in Australia: in most cases, a TFN is required when there is a source of income in Australia;
Note:

If a foreign resident in Australia is only receiving interest, dividends, or royalties, obtaining a TFN is not mandatory.

  • Australian citizens: or them obtaining a TFN is straightforward. All that is required is to fill out a form, receive a reference number, and visit an Australia Post outlet within 30 days of completing the form.

TFN processing time

According to the official Australian Taxation Office (ATO) website, the processing time for a TFN is 28 days. This period may be extended if there are missing documents or additional information is required.

Important:

If you have a myGov account, you can easily find your TFN through your account. However, if you don’t have an account, you need to make a request to the ATO (Australian Taxation Office) to obtain your TFN.

Conclusion

Obtaining a Tax File Number (TFN) in Australia is an important step, often a necessity. While getting a TFN is relatively simple, it’s important to note that the official processing time can be up to 28 days.

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