Legal Entity Identifier (LEI) vs Tax Identification Number (TIN) in Australia
The Legal Entity Identifier (LEI) is a standard identifier that provides verified data on legal entities and is registered on a centralized system, the Global LEI System. The Tax Identification Number (TIN) in Australia is referred to as the Tax File Number (TFN). The TFN is used by individuals and entities that have a need to interact with The Australian Taxation Office (ATO).
Legal Entity Identifier (LEI) in Australia
The LEI is a 20-character alphanumeric code that is based on the ISO 17442 standard developed by the International Organization for Standardization (ISO). LEI number is used as a reference to important information that offers transparency when taking part in financial transactions such as trading with stocks, bonds, or forex.
LEI connects to key reference information that enables a clear and unique identification of legal entities participating in financial transactions on a global scale. Each LEI contains well-structured reference data which is categorized into 2 sections: Level 1 – who is who and Level 2 – who owns whom.
Level 1 data includes entity registration details, such as legal name, number of registration, legal and HQ address, etc. Level 2 contains information about an entity’s ownership structure and thus answers the question of who owns whom.
Simply put, the publicly available LEI data pool transfers unstructured entity registration data into a standardized global directory, which helps to enhance transparency in the global marketplace.
How to get an LEI in Australia?
An LEI number needs to be obtained through an LEI service provider, this could be a Local Service Provider (LOU) or a Registration Agent (RA). The Global LEI System (GLEIS) is designed to encourage competition between LEI issuers and registrators for the benefit of legal entities seeking to obtain an LEI. Generating a price for issuing and maintaining an LEI has therefore been left to the organizations themselves. This explains why some companies charge double the price of their competitors.
Where to find LEI-s in Australia?
Any interested party can access and search the complete global LEI data pool free of charge. You’ll be able to quickly source information on who is who and who owns whom.
LEI Register – Number One Registration Agent Worldwide
LEI Register is an official Registration Agent – we have been helping legal entities apply for new LEI codes or transfer and renew existing LEI codes since early 2018. We have successfully pursued our goal to make the LEI registration process simple, automated, fast, and affordable. At LEI Register we keep our profit margins low and believe in building long-term business relationships.
LEI Register has built a loyal customer base by offering the lowest prices on the market, all whilst keeping active 7 days a week customer support in a local language in 35 countries.
Tax Identification Number (TIN) in Australia
Tax File Number (TFN)
The TIN in Australia is referred to as the Tax File Number (TFN). The TFN is used by individuals and entities that have a need to interact with the ATO. For example need to report information to the ATO, lodge income tax returns, or interact in the superannuation (retirement income) system.
A TFN can be issued to individuals or non-individual entities (companies, trusts, partnerships, and superannuation funds). A TFN is issued under the Income Tax Assessment Act 1936 (ITAA 1936) upon application by the client or as required by the ATO for internal purposes.
The TFN is an eight or nine-digit number compiled using a check digit algorithm to allow accurate data capture of the TFN in ATO systems.
How to get a TFN?
Applying for a TFN can be completed online or via paper channels. TFN will be issued after sufficient proof of identity has been provided. For individuals, this includes one primary document (birth certificate, passport, citizenship certificate) and up to two secondary documents (driver’s license, Medicare card, bank statement, firearms license, student card, proof of age card, student examination certificate). Proof of identity requirements for partnerships, companies, and trusts include establishing the identity of the partners, director(s), and public officer and trustee respectively.
Australian Business Number (ABN)
Australian businesses use the Australian Business Number (ABN) as a single identifier for all business dealings with the ATO, for tax identification purposes, and for dealings with other government departments and agencies. Businesses need an ABN to register for the goods and services tax and other elements of The New Tax System (Goods and Services Tax) Act 1999.
The ABN is a unique 11 digit number formed from a nine-digit unique identifier and two prefix check digits.
How to get an ABN?
Similar to TFN, the application process for an ABN can be completed online or via paper channels. Additionally, registration for the Goods and Services Tax (GST) can be completed simultaneously with an ABN application. The Australian Government introduced the ABN in response to the Small Business Deregulation Task Force Report, which called for a single identifier to simplify business dealings with the Australian Government. A client’s ABN is available to State, Territory, and local government regulatory bodies to streamline registration requirements.
Where to find TINs in Australia?
An individual or entity is advised of their TFN or ABN in writing upon finalization of the application and the number will be visible in private online interfaces. A TFN may also be found on employment payment summaries, share statements, health insurance documentation, and superannuation statements. The TFN or ABN can also be used as a reference on certain ATO correspondence and assessments.
Australia TIN (2022) [online].
Available at: https://www.oecd.org/tax/automatic-exchange/crs-implementation-and-assistance/tax-identification-numbers/Australia-TIN.pdf [Accessed 5th April 2022]