In this series, we review a range of common questions we receive regarding when you need to register for an ABN. eBay stores are a common starting spot for budding ecommerce entrepreneurs, although many are not sure of what they’ll require to be compliant.
Do you need an ABN to Sell on eBay?
The answer to this question is based on your profit and intentions for your Ebay Store Account when selling on Ebay.
Are you running a business or is it a hobby? Anyone can apply for an ABN, but you will only receive one if you are entitled.
You are entitled to an ABN if you are:
- carrying on an enterprise in Australia;
- in the course of carrying on an enterprise make supplies connected with Australia; or
- have undertaken sufficient activities to commence an enterprise;
- able to demonstrate that you have a business structure is in place;
A hobby is not an activity that is considered an enterprise. However, if you have a business plan in place and carry on in a businesslike manner and records are kept it is considered an enterprise. Hence the decision will be up to you and how you conduct your Ebay Store Account. It is advised to acquire an ABN due to the benefits; the ability to claim back goods and services tax (GST) credits, claim fuel tax credits you quality for, register to use the pay-as-you-go withholding system, be able to offer fringe benefits to employees, and making dealing with other businesses a smooth process. Whilst you will still need to claim profit using your Tax File Number for your hobby if you don’t have an ABN it is also a matter of being future focused and not getting caught out with tax when your “hobby” takes off.
You must register for GST if your Ebay Store makes over $75,000 in a financial year, this process will require an ABN.
Ebay or PayPal can provide an invoice for your customer.
If you are still unsure about whether selling on Ebay is a Business or a Hobby please refer to our legal blog on Do You Need an ABN for a Hobby?
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