Is online selling a hobby or a business? When you start asking yourself this question, there’s usually no straightforward answer. Many online businesses begin as hobbies, and at some time, you’ll be able to claim it’s either. An accountant can help you identify the distinctions between a commercial business and a hobby, so you know you’re filing the correct papers.

This questionnaire compiled by the Australian Taxation Office (ATO) helps you determine whether your online selling is more of a business than a hobby:

  • Did you set up your online store with the intention of becoming a business?
  • Did you start your online venture to turn it into a business?
  • Do you pay a fee to maintain your online selling presence?
  • Is one of your primary objectives to make a profit?
  • Do you make consistent profits/sales?
  • Do you charge a premium on items you make yourself?
  • Are your items similar to merchandise sold in an actual “brick-and-mortar” store?

If you responded “yes” to most of these questions, you’re likely running a business, and your incomes are taxable.

The Next Step: Apply for an ABN

You’ll almost certainly need to apply for an Australian Business Number (ABN). An ABN allows you to conduct your internet business like a company and is sometimes needed by law. Aside from that, you’ll need one to register for most Australian website names.

What Exactly Is an ABN?

We’ll go through some of the advantages of having an ABN for your business and when it could be helpful.

  1. Getting a Rebate on GST Paid on Local Purchases

When you’re registered for GST, one obvious benefit is the opportunity to claim GST back on purchases made in Australia, including Amazon seller fees. And you need an ABN to register for GST. To maximise the advantages of claiming GST tax credits, apply for an ABN.

  1. Tax Credits

There are business costs that you may claim as tax deductions while setting up and managing your firm. To claim business expenditures when filing your next tax return, you must obtain an ABN. If you don’t have an ABN, you won’t be able to claim legal business deductions such as motor vehicle expenditures, travel expenses, operational expenses or any applicable capital expenses.

  1. Purchasing an Australian Domain Name

The Australian Domain Name Authority manages domain names that end in, and .au in Australia (auDA). Most often known as country code Top Level Domains (ccTLDs), these domains require an ABN before you can purchase them. On the other hand, other domains, such as .com and .org, do not require an ABN and can be acquired by just about anybody.


Selling online, more often than not, is a business. The ATO has begun to data match numerous online marketplaces against information in people’s tax returns in the past years to ensure all relevant revenue is disclosed.

New Wave Accounting is an accounting firm in the Gold Coast dedicated to helping small businesses keep their books and financial figures in check. Make sense of your business numbers by getting in touch with us today!