What is TFN (Tax File Number)? TFN (Tax File Number) Review

TFN (Tax File Number) is a unique number assigned to an individual by the Australian Taxation Office (ATO). It is usually 9 digits long and is mainly used to manage personal taxes. For example, personal income tax on wages earned in Australia needs to be paid to the Australian government through a tax number. If your salary exceeds the minimum taxable wage standard in Australia, you need to provide your employer with a tax number for tax deduction.

About TFN

The personal tax number (Tax file number - TFN) is the most basic link for the smooth collection of personal income tax in Australia. Every Australian citizen has a TFN that accompanies him or her throughout his or her life since the day of birth. Any foreigner entering Australia should apply for a TFN as long as he or she has income in Australia (including interest on bank deposits). The TFN accurately records all personal credit of the taxpayer. Australia's Data Matching System Act authorizes government agencies (including tax collection and administration agencies, social security agencies, military affairs, community services and health, employment agencies, education and training institutions) to enter citizens' personal income, family situation (including minors to be supported), credit status, etc. in detail according to the TFN and record them on file.

Get time

10-28 days

effect

1. Check the basic information of taxpayers and third parties (such as employers, pension management institutions, and investment institutions) paying taxes to the tax bureau.

2. Prevent taxpayers or tax-responsible persons from evading taxes, for example, by listing a second job or other occupation under a false name to evade personal income tax (Wuerler Bakker, Murphy Evans, 2007).

3. Exempt taxpayers from certain tax obligations. Australia's personal income tax collection and management laws stipulate that taxpayers should provide TFN to banks or employers when investing or being employed. If taxpayers provide TFN, banks or employers will withhold tax at the lowest individual tax rate within the tax amount when paying interest or wages; if they fail to provide TFN, banks or employers will withhold tax at the highest individual tax rate when paying interest or wages.

Features

1. Fairness

First, the TFN system helps to achieve horizontal fairness, that is, people in the same or similar situations can be treated fairly. For example, A and B both have an annual salary of 50,000 Australian dollars. A provided a tax number and his employer prepaid 14,000 Australian dollars in personal income tax. However, because B did not provide a personal tax number, the employer will deduct B's tax at the highest tax rate of 47%, plus an additional 1.5% welfare insurance tax. At the same time, the social welfare department also refused to pay him welfare benefits because it could not track his tax returns.

Secondly, the TFN system helps to achieve vertical fairness, that is, people in different situations can be treated differently. From the perspective of tax obligations, high-income earners naturally have a higher tax burden than low-income earners. The vertical fairness of the Australian tax system is fully realized through the TFN system. With the TFN system and the networking of information, all personal income situations of any citizen can be fully counted, and all of this is conducive to the tax collection and administration authorities to prepay taxes based on the tax number (the maximum limit is 45% of the nominal salary), which promotes fair taxation to a certain extent.

2. Simplify

The simplification of the personal income tax system lies in allowing taxpayers to pay taxes according to regulations and tax authorities to enforce and collect taxes according to regulations. If taxes can be easily and accurately calculated and the costs of the tax subjects involved are as low as possible, then the goal of simplifying taxes will be achieved. According to the relevant provisions of the TFN system, taxpayers should declare their tax numbers to third parties (such as employers, pension management institutions, and investment institutions), and the third party will withhold personal income tax. This avoids the trouble of calculating personal taxes separately and simplifies the procedure for collecting taxes.

3. Accuracy

TFN ensures the accuracy of taxation in the following two aspects. (1) Accurate tax scope. TFN helps the tax authorities to identify who is subject to taxation and who is liable for taxation. (2) Accurate tax liability. TFN can help taxpayers to easily calculate their tax liability. Since TFN simplifies the procedures and realizes the summary accounting of personal income, taxpayers can accurately calculate taxes. Without TFN, income from different industries or different sources would be complicated.

4. Efficiency

The main requirement for efficient law enforcement by law enforcement agencies is that the cost of law enforcement is not wasted as much as possible in the process of allocating personal resources to social distribution. TFN reduces the labor intensity of law enforcement agencies, directly participates in the transformation of social resources through its own bridge role, and saves social costs. For example, according to the provisions of the Taxpayer Charter, each taxpayer has only one tax number. No matter how the taxpayer's situation changes, such as inter-provincial migration, job changes, name changes, investments, or application for government benefits, the law enforcement subject does not need to re-register, and the personal tax number remains the same throughout life.

How to apply

1. On-site application

Take your passport directly to the local tax office to apply for a tax number. There are tax offices in major cities in Australia. Google the address of the tax office near you.

The tax bureau's working hours are from 8:30 AM to 4:45 PM, Monday to Friday (it is recommended to check in advance)

2. Online application

Please log in to the official website for tax number application.

3. Letter application

Go to the tax bureau website. Download the tax number application form, fill it out, print it out, and mail it to the mailing address in the application form, and wait for a reply. (Postal mail in Australia still occupies a very important part of daily communication).

Eligibility for applying for a tax number

1. Applicants must be in Australia.

2. Applicants can be foreign passport holders, permanent immigrants or temporary visitors.

3. Applicants must hold a valid work visa. The visa must be one of the following:

Permanent immigrant visa;

a visa with work rights;

Overseas student visa (international students belong to this category);

A visa that allows you to stay in Australia indefinitely.

Required documents

1. Passport.

2. Basic personal information.

3. Australian residential address.

Steps to apply for an online tax number:

Step 1: Enter the official website, confirm your eligibility to apply for a tax number, and press NEXT.

Step 2: Apply for TFN and press NEXT.

Step 3: Fill in the travel document information and press NEXT.

Step 4: Please fill in your personal information and press NEXT.

Step 5: Do you have an existing TFN or ABN? If not, please select NO. After confirming all the answers, please press NEXT.

Step 6: Please fill in your Australian mailing address. If your residential address is different from your mailing address, please fill it in the second address field below. After completing the form, press NEXT.

Step 7: Please fill in the contact information. If you want to set up a contact person, please fill in the contact information below and press NEXT after filling in.

Step 8: You have completed all the application questions. If you need to change the previous content, you can click Previous to return to the previous page. After confirming that everything is correct, please click Submit.

Enlightenment to my country

1. Establishing a personal tax number helps strengthen citizens’ tax awareness.

2. Establishing a personal tax number helps prevent companies from using wages to evade taxes.

3. Personal tax number provides strong evidence for the authenticity of citizens’ personal income.

4. Establishing a personal tax number will help improve the tax collection and management efficiency of the tax collection and management authorities.

5. Establishing a personal tax number helps achieve tax fairness.

6. Align with international tax practices to avoid double taxation.

history

In 2005, the Australian government further reformed the TFN system to improve the accuracy of TFN data and strengthened third-party data entry to improve the efficiency and effectiveness of the data matching system. For example, employers are required to disclose employee information to the tax bureau; social insurance agencies are required to disclose taxpayers' government subsidy income; and customs are required to promptly declare inbound personnel carrying cash exceeding 10,000 Australian dollars.