If a supplier does not quote their ABN to your organisation and you are not satisfied that one of the exclusions applies, your organisation must withhold 46.5% of the total payment.
Your organisation should also withhold if it doubts that the ABN quoted is correct. If you are unsure, you can check the validity of a supplier’s ABN by using the Australian Business Register.
To check an ABN with the Australian Business Register:
phone the automated checking service on 13 72 26, or
If your organisation withholds from a payment, it needs to make sure it is registered for PAYG withholding.
Complete a payment summary form and give it to the supplier at the same time as your organisation pays them the net amount, or as soon as possible afterwards. The supplier will need this payment summary to claim the withheld amount as a credit when they lodge their income tax return.
If it is not yet registered, phone the Tax Office on 13 28 66.
What if the supplier has applied for an ABN?
Before you withhold, you could offer to hold back payment until the supplier has obtained and quoted their ABN. Delaying the payment is a matter for you and your supplier to work out.
You should not make full payment to the supplier on the understanding that an ABN will be quoted later. If you fail to withhold from the payment you can be held liable for the amount you did not withhold. You may also be prosecuted.
If your organisation is withholding from employee wages, it should already be registered for PAYG withholding. It may have done this when it applied for an ABN. If it did not, it can still register for PAYG withholding.
You need to add together any amounts your organisation has withheld for PAYG withholding purposes and send the total to the Tax Office with its next activity statement.
Quote your ABN on your business stationery
It is a good idea to quote your organisation’s ABN on its invoices and other stationery to avoid having amounts withheld from payments for supplies your organisation has made. If your organisation is registered for GST, other organisations will also need your organisation’s ABN on the tax invoice to claim GST credits for the GST included in the price of goods and services your organisation supplies to them.
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