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Do You Need an ABN to Sell on Facebook Marketplace in Australia? Clearing Up the Confusion

28/03/2023 by
The Marketing Team
Facebook marketplace is an online platform that allows individuals and businesses to buy and sell goods and services. It has become increasingly popular in recent years due to its convenience and accessibility. However, there is often confusion surrounding whether an Australian Business Number (ABN) is required to sell on Facebook Marketplace in Australia. In this […]
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Facebook marketplace is an online platform that allows individuals and businesses to buy and sell goods and services. It has become increasingly popular in recent years due to its convenience and accessibility. However, there is often confusion surrounding whether an Australian Business Number (ABN) is required to sell on Facebook Marketplace in Australia. In this Business Kitz article, we will explore this topic in detail and provide clarity on whether or not an ABN is needed to sell on Facebook Marketplace in Australia.

What is an ABN?

An Australian Business Number (ABN) is a unique 11-digit number that identifies your business or organisation to the government and the wider community. It is a requirement for businesses and organisations operating in Australia to have an ABN, as it is used for tax and other business-related purposes.

The importance of an ABN:

Having an ABN is important as it allows you to:

  • Register for Goods and Services Tax (GST) if your business has a turnover of $75,000 or more
  • Claim Goods and Services Tax (GST) credits
  • Identify your business to the government and other businesses
  • Register for an Australian domain name
  • Deal with other businesses
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Is an ABN required to sell on Facebook Marketplace?

The answer to whether an ABN is required to sell on Facebook Marketplace in Australia is not straightforward. According to the Australian Taxation Office (ATO), if you are selling goods or services online with the intention of making a profit, then you are considered to be running a business. As a result, you will need to have an ABN.

However, if you are selling items that you no longer need or want, such as second-hand clothes, furniture, or toys, and are not doing so on a regular basis, then you may not need an ABN. The ATO considers these types of sales to be a personal transaction and not a business transaction.

It is important to note that the line between selling items as a hobby and running a business can be blurry.

What is considered a business?

According to the ATO, a business is an activity carried out for commercial reasons with the intention of making a profit. This includes activities such as buying and selling goods or services, renting out property, or providing professional services. If you are carrying out any of these activities with the intention of making a profit, you are considered to be running a business.

If you are unsure whether you are running a business or selling items as a hobby, it is best to seek advice from a qualified accountant or the ATO.

Applying for an ABN

If you have determined that you do need an ABN to sell on Facebook Marketplace in Australia, the next step is to apply for one. You can apply for an ABN online through the Australian Business Register (ABR) website.

To apply for an ABN, you will need to provide the following information:

  • Your name or the name of your business
  • Your business structure (e.g., sole trader, company, partnership)
  • Your contact details
  • Your tax file number (TFN)
  • Information about your business activities
  • The date you started or acquired your business
  • Details of any associates or partners

Once you have submitted your ABN application, it can take up to 28 days to receive your ABN. It is important to note that there is no cost associated with applying for an ABN.

Conclusion

In conclusion, whether or not you need an ABN to sell on Facebook Marketplace in Australia depends on whether you are running a business or engaging in a hobby. If you are selling goods or services as a hobby and not with the intention of making a profit, you do not need an ABN. However, if you are running a business and selling goods or services with the intention of making a profit, you will need to register for an ABN. Applying for an ABN is free and can be done online through the Australian Business Register website. It is important to consider the legal and tax implications of selling goods online and to seek professional advice if necessary.

Legal Advice

If you have any questions regarding the legal implications of selling goods online or any legal matters, please do not hesitate to contact our sister company, Legal Kitz. The Legal Kitz team are happy to assist you. You can request to book a free 30-minute consultation with their experienced and highly qualified team via our website now. Additionally, you can also check out the Business Kitz subscription service today to access our full range of legal, commercial and employment documents to begin your business with a solid foundation that ensures compliance.

About
The Marketing Team
Business Kitz Marketing team are experts in their field. You can expect the best business guides and updates on employment law here.
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