01 Aug 1414
More on ABNs for companies with foreign ‘associates’
MEMBER 105 writes:
"We regularly set up companies for clients with an overseas background (either foreign shareholder or foreign directors). The wonderful ABR computer system that records the ABN application has its issues.
The system does not like the fact that foreign directors do not have a Tax File Number, or foreign corporate shareholders do not have an ACN or ARBN – until the 4th attempt. A helpful ATO officer (they do exist) acknowledged that the software had flaws and advised me to submit the relevant screen on the application 4 times and it would go through on the 4th attempt. The fact that this issue exists and has not been fixed could not be answered by the ATO officer, but nevertheless, she was very helpful and advised the workaround.
Can anybody tell me why the ATO needs actual documented proof (ie original certificate of incorporation, or original passport and other ID) that a foreign shareholder and director exists. The fact that an Australian subsidiary company is registered with ASIC and has an Australian director/public officer should be enough. Our foreign clients shake their heads when we incorporate an Australian company and they want to trade immediately and do the right thing, but cannot legally charge GST due to this ridiculous bureaucracy delaying the ABN application. Yet, once the ABN/GST registration eventually goes through, they have to remit 1/11th of the invoice to the ATO even though they could not legally charge it at the time.
ATO/ABR – please fix this nonsense so that Australian can truly be open for business."