ABN Question

Hei Guys,
Looking at moving country next year which will mean mail ordering on a regular basis - mainly tools, car/bike parts and hobby supplies.
I am finding that there is a lot of wholesalers who will supply small quantities but will only deal with ABN holders.

I've done some research, getting the ABN seems fairly straight forward, my question is what effect does having an ABN have on my personal tax.
Obviously I would have to pay GST on anything I buy direct from a wholesaler but beyond that what would be the ramifications.

I'm not looking to dodge tax, (although like everyone else I believe I pay too much and will minimise that where I can) but having an ABN would grant me access to some suppliers I wouldn't otherwise have access to, and also allow me to bypass some pretty a$$hole retailers.

In a nutshell, could I keep this fairly neutral in terms of what it would cost me, and can I do it without having to involve accountants - I've done my own tax since etax came out.
Cheers
Paul

If you're "moving country next year" means you are leaving Australia then you won't qualify to use the ABN system.

Briefly it means that you claim the GST paid as a rebate and add the GST back on your sales, thus only paying the GST on the increased value. If you don't have sales you also don't qualify.

The BAS statement regarding the GST is as easy as pie to do if you use a proper accounting package, like MYOB. You enter the sales and purchases as you incur them and at return time the program will spit out the details for entering into your Bass statement.

BTW an initial discussion to set up your affairs with a tax accountant would be worthwhile in order to avoid making costly mistakes and I would strongly recommend that instead of relying on free internet advice. ( Mine excepted of course. :U )


Peter.

When we sell to our overseas customers we sell to them tax exempt.

What you have to consider is what tax system the country you are going to live in has and what duties and taxes they have to pay.

Aus is generous in that there is a $1000.00 threshold before you pay any taxes and duties, New Zealand is only $200.00 so they get stitched up every time.

You are best to buy in volume to try and negate your freight content as well, buying ones and twos makes for expensive freight.

As Peter indicated have a good chat to your accountant, and also get a local accountant where you are going as each countries laws will be different.

Quote:

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Originally Posted by Sturdee

an initial discussion to set up your affairs with a tax accountant would be worthwhile in order to avoid making costly mistakes.

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:whs:

Sorry guys, when I say moving country, I meant moving TO THE country, I assumed that most people would realise that - if I was moving OS I would have said OS or phrased it as "moving countrys/countries".

As for so called tax experts, I have been doing my own since Etax first came out and for all those years I have seen friends and colleagues pay the experts and get less back than me.

As for the threshhold, it was announced about 2 weeks ago that they are going to drop it down to $20 to bring home all the money that's going overseas with online buying.

I had an ABN and need it when I do feelance, and contract work as a Photographer and Retoucher. The business hiring my services always require you to provide one. Technically I can operate up to $50K before needing one for tax reasons. The government sent out letters recently and it in it's wisdom has decided I haven't used mine enough and it has given out to many ABNs and needs to ratify it's system therefore it has cancelled many peoples including mine.

So to get another I will probably have to put in an application and pay some fees again for something I had and wanted to keep in the hopes it helps me get future work.

So getting an ABN may now be more difficult than it used to be, or the Gov is just underhanded revenue raising again.

Quote:

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Originally Posted by smidsy

Sorry guys, when I say moving country, I meant moving TO THE country, I assumed that most people would realise that - if I was moving OS I would have said OS or phrased it as "moving countrys/countries".

As for so called tax experts, I have been doing my own since Etax first came out and for all those years I have seen friends and colleagues pay the experts and get less back than me.

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I thought you meant that, so I answered your basic question. The point that should be made clear is that the ABN system is for those that are in business, not for the convenience of those that are not.

So your tax accountant/planner first question is to work out if you qualify, if not you will go through the trouble of registering when not qualified and the possible (now under a different government) prosecution for making incorrect applications etc. All the applications are legal documents and false documentation will get you into trouble. The tightening up of the system is the precursor.

However you know the saying that those that don't use lawyers and act for themselves have a fool as client, well the same goes for the even more complicated matters like tax law.

Doing Etax is simple and doing BAS statements is also simple but knowing why or how to establish a suitable structure is a tad more complicated. I know, as for many years I was involved in tax /business planning and the financial cost of those that came to us when things went A over T after having done it themselves was horrendous. Would have been cheaper and less heartache to see an expert first.

Peter.

Quote:

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Originally Posted by smidsy

Hei Guys,
Looking at moving country next year
Paul

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Reading above sure seem like OS to me and others, no mention of THE in there

May be time to consult the official people to get the correct advice.

Of course, if you have a friend with an ABN, use his company identity to buy goods. You pay the invoice direct to the supplier, and as he is not on-selling the goods he does not have to pay GST on them (he cannot claim the GST 'input' either) - a net nil sum for him tax wise.

I've had an ABN for a long time, but rarely use it. It's my understanding that as long as you don't want to claim the GST back (for purchases made) and don't charge GST (on sales), then there is no need to do a BAS. I think there may be dollar limit, above which, that no longer applies.

There is no need to register for GST and be required to do a BAS if your gross turn over is under $72,000. I too received a letter asking if i required my ABN so I guess they are trying to do some house keeping.

Quote:

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Originally Posted by Chris Parks

There is no need to register for GST and be required to do a BAS if your gross turn over is under $72,000. I too received a letter asking if i required my ABN so I guess they are trying to do some house keeping.

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I wish I could share your optimism that it's as simple as "house keeping".

Quote:

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Originally Posted by smidsy

Hei Guys,
Looking at moving country next year which will mean mail ordering on a regular basis - mainly tools, car/bike parts and hobby supplies.
I am finding that there is a lot of wholesalers who will supply small quantities but will only deal with ABN holders.

I've done some research, getting the ABN seems fairly straight forward, my question is what effect does having an ABN have on my personal tax.
Obviously I would have to pay GST on anything I buy direct from a wholesaler but beyond that what would be the ramifications.

I'm not looking to dodge tax, (although like everyone else I believe I pay too much and will minimise that where I can) but having an ABN would grant me access to some suppliers I wouldn't otherwise have access to, and also allow me to bypass some pretty a$$hole retailers.

In a nutshell, could I keep this fairly neutral in terms of what it would cost me, and can I do it without having to involve accountants - I've done my own tax since etax came out.
Cheers
Paul

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Paul

I have maintained my ABN, but have not used it to for business purposes for over ten years. For any supplier that wants an ABN I am able to legitimately quote mine. It has no effect on my tax and each year I complete a BAS with zero figures. I can't remember the exact process or cost of obtaining an ABN, but I think it is as simple as applying to the relevant authority and coughing up some money. You don't have to register a company name as you can trade under your own name as a sole trader.

Regards
Paul

Cancelled mine some years back and then reapplied 1 to 2 years later and got the same number back. My understanding was once you get one it sticks for life. Things may have changed. :dunno:

I also understand the same. I have used the same number over three different business ventures.