• 10.3. Is a foreign bank with a representative office in Australia entitled to an ABN under section 8 of the ABN Act?

    For source of ATO view, refer to paragraph 233 of MT 2006/1External Link - The New Tax System: the meaning of entity carrying on an enterprise for the purposes of entitlement to an Australian Business Number

    Yes, a foreign bank with a representative office in Australia is entitled to an ABN under section 8 of the ABN Act.

    Paragraph 170 of MT 2006/1 provides that an enterprise includes an activity, or series of activities, done in the form of a business. The phrase 'in the form of a business' is broad and has as its foundation the longstanding concept of a business. The definition clearly includes a business and the use of the phrase 'in the form of' indicates a wider meaning than the word 'business' on its own. We consider that the liaison activities carried on by a foreign bank at its representative office in Australia have the character of such activities and therefore constitute an enterprise. The decisions in Anglo Australian Foods Ltd v Credit Suisse (1989) 1 ACSR 69 and South India Shipping Corp Lt v Export-Import Bank of Korea (1985) 2 All ER 219 support this view. A foreign bank with a representative office in Australia is therefore entitled to an ABN under paragraph 8(1)(a) of the ABN Act.

    A foreign bank with a representative office in Australia will also be entitled to an ABN under paragraph 8(1)(b) of the ABN Act if, in the course or furtherance of carrying on its enterprise, it makes supplies that are connected with the indirect tax zone.

    A foreign bank with a representative office in Australia makes supplies that are connected with the indirect tax zone if it supplies services that are performed in the indirect tax zone or if it provides advice or information that is prepared, produced or created in the indirect tax zone. If the services are performed outside the indirect tax zone – or if the advice or information is prepared, produced or created outside the indirect tax zone – then the supply of the service, advice or information is not connected with the indirect tax zone. This is so even if the end product is delivered to a recipient in the indirect tax zone.

    A foreign bank with a representative office in Australia also makes supplies that are connected with the indirect tax zone if it makes supplies of things other than goods or real property through an enterprise which it carries on through a permanent establishment (as defined) in Australia.

      Last modified: 24 Jun 2015QC 16359