Tax file number (TFN)

Definition

A tax file number (TFN) is a unique identification number issued by the Australian Taxation Office (ATO) to individuals and organisations for taxation and other purposes.

What is a tax file number?

The TFN serves as a key identifier for individuals and organisations in their dealings with the ATO and other government agencies. Each TFN is unique and remains the same, regardless of changes in any circumstances. TFNs are not reissued or reassigned, ensuring the integrity and security of the taxation system.

TFNs are sensitive and confidential information protected by privacy laws. Individuals and organisations are required to safeguard their TFNs and only disclose them to authorised parties for lawful purposes.

The TFN is primarily used for taxation purposes, including:

• Filing tax returns: TFNs are used when filing  annual income tax returns with the ATO.
• Taxation of income: Employers use employees’ TFNs to report their income and withhold the correct amount of tax from their wages.
• Superannuation contributions: TFNs are provided to superannuation funds to ensure correct reporting and taxation of contributions and earnings.

In addition to taxation, TFNs may be used for other purposes, including:

• Applying for government benefits: Some government benefits and payments require applicants to provide their TFNs for eligibility and administration purposes.
• Banking and financial transactions: Financial institutions may request TFNs for identification and reporting purposes related to financial transactions, investments, and accounts.

Individuals and organisations are responsible for keeping their TFN details up to date and ensuring that they provide their TFNs to relevant parties. Failure to provide a TFN to employers or financial institutions may result in higher taxation rates or delays in accessing government services and benefits.

Example of a tax file number

Upon registration, XYZ Pty Ltd applied for a tax file number with the Australian Taxation Office. The ATO issues a unique TFN to XYZ Pty Ltd, which the business uses for taxation purposes, including filing business activity statements (BAS), reporting income, and fulfilling tax obligations.