Statement by Supplier Form: When NAT 3346 Holds

A statement by supplier form explains why a supplier does not quote an ABN. Accept NAT 3346 only when its reason fits the supply and you have no reasonable grounds to doubt it. Otherwise, no-ABN withholding generally applies at 47%.

When a Supplier May Give a Statement Instead of Quoting an ABN

A supplier can give a statement when a genuine exception removes the need for no-ABN withholding. Simply forgetting to register is not an exception.

The ATO’s NAT 3346 form has eight reason boxes. The conditions below explain what each covers.

Reason on the Form	What It Covers
Payer’s payment outside an Australian enterprise	The payer buys outside the course of carrying on an enterprise in Australia. A private purchase can fit this condition.
Individual under 18, paid no more than $350 a week	Both the age condition and the weekly payment limit must hold. Employee payments have their own withholding rules.
Payment of $75 or less, excluding GST	The $75 limit excludes goods and services tax (GST). It applies to all payments made or proposed for the same supply, added together.
Entire supply input taxed	The supply must be wholly input taxed under GST rules. A supplier’s lack of GST registration does not establish this.
Individual or partnership without a reasonable expectation of profit or gain	The activity must meet this condition. A loss in one period does not by itself establish the exception.
Supplier outside an Australian enterprise, without ABN entitlement	The supplier must actually lack entitlement on this basis. An eligible business that has never applied does not fit.
Entire payment exempt income	The whole payment must be exempt income of that supplier. Low income or no tax ultimately payable does not make income exempt.
Individual’s hobby or wholly private or domestic supply	The individual gives a written statement covering their hobby or the supply’s wholly private or domestic character from their perspective.

For an ordinary supplier-invoice review, start with the small-payment test and the claimed hobby or private supply. Input-taxed and exempt-income cases depend on specific tax treatment. The payer’s private-purchase box usually has little relevance to your client’s business invoices.

A statement can cover identified current and future supplies. It does not exempt every payment to that supplier indefinitely. The ATO’s ruling on no-ABN withholding recommends annual confirmation for a covered class of supplies. Reassess sooner when the activity changes.

What a Valid NAT 3346 Has to Contain

NAT 3346 is the ATO’s Statement by a supplier. The supplier completes their details, selects every applicable reason and signs the declaration. The payer keeps it with the supply records. It is not sent to the ATO.

Before relying on the form, check that it contains:

• The supplier’s name and complete address.
• An applicable reason for not quoting an ABN.
• The name of the supplier or authorised signing person.
• That person’s signature, signing date and daytime phone number.

Keep the invoice or agreement with the form so you can identify the covered supply. An unsigned declaration, a missing reason or an unidentified supplier needs correction before reliance. A missing phone number needs follow-up. A completed form still fails if its reason is false.

You can receive the signed document electronically, including a legible scan of a signed form.

For electronic signing, use a method that identifies the signer and records their approval of the declaration. The payer must consent to that method, and the method must meet the applicable reliability requirements. These conditions come from the Electronic Transactions Act. Keep the signed file and the evidence of signing together. A name typed into an ordinary contact field alone does not establish approval of the declaration.

Deciding Whether the Stated Reason Holds

You can rely on a supplier’s statement when you have no reasonable grounds to believe it is false or misleading. Compare the selected reason with the actual work, payment and information your client holds.

Ask what the supplier does, how often your client buys from them and whether the activity has commercial features. Keep the supplier’s explanation with any documents that support it. The ATO’s statement guidance requires withholding when reasonable grounds contradict the statement.

A Hobby Claim

In this fictional example, an individual invoices your client for regular cleaning and ticks the hobby reason. They advertise cleaning services and negotiate commercial fees. Those facts give you grounds to question the claim. Request their ABN or a supported explanation before payment. If no exception holds when payment proceeds, apply withholding.

A Small Payment

In this fictional example, your client buys an item for a full price of $70, with no GST charged. Because $70 is the full price of the supply, it meets the $75 limit excluding GST and no-ABN withholding does not apply. Record the amount and exception against the invoice. Assess a separate later supply on its own facts. For instalments of the same supply, test their combined total, including payments already made or proposed.

An Unregistered Supplier

In this fictional example, a subcontractor charges $1,000 for a business job and says they never applied for an ABN. They give no applicable exception. Ask them to quote an ABN before payment. If they cannot, withhold $470 and pay them $530 when the payment proceeds.

Record the invoice reference, claimed reason, enquiries, supporting facts, decision and person who approved payment. Keep contrary facts as well as the supplier’s reply. If the reason looks wrong, query it first. Agree a payment delay with the supplier if more information is needed. If payment goes ahead without an ABN or a genuine exception, withhold.

If the facts raise employee classification, resolve that separately before applying supplier rules. New employee forms covers the paperwork once the worker is an employee.

Withholding When No Valid Reason Exists

The no-ABN withholding rate is 47% of the total payment where withholding applies. The ATO’s PAYG withholding instructions confirm the rate and reporting labels.

1. Check whether your client is registered for PAYG withholding. Add the withholding account if needed before the first payment requiring withholding.
2. Calculate 47% of the total payment and pay the supplier the balance. Record the withheld amount as payable to the ATO.
3. Report the withholding at W4 on the activity statement for a small or medium withholder. Include it in W5 and pay it to the ATO under the client’s reporting cycle. Large withholders use separate electronic payment rules.
4. Give the supplier a PAYG payment summary - withholding where ABN not quoted, NAT 3283, when paying the balance or as soon as possible afterwards. Keep the payer’s copy.

The supplier uses the payment summary to claim credit for the tax withheld. The ATO’s payment-summary instructions identify the applicable form.

Prepare the no-ABN withholding annual report, NAT 3448, with known payee details, gross payments and tax withheld. Keep payment summaries with your records. Where the same amounts belong in a taxable payments annual report, avoid reporting them twice. Use contractor-payment reporting guidance to decide which reporting obligation applies.

If your client already paid the invoice in full, establish whether withholding was required at the time of payment. A later ABN or statement does not automatically erase that failure. Escalate the missed withholding for correction and voluntary disclosure. Do not create a payment summary showing tax that was never withheld.

For contractor services, failure to withhold or report can also remove the deduction and expose the payer to penalties. The ATO’s non-compliant payment guidance explains voluntary disclosure before relevant compliance action starts.

Where This Sits in the Client’s Bookkeeping

Give each no-ABN invoice a payment hold until someone records an ABN, an applicable exception or a withholding decision. Use the bookkeeping software’s approval setting or exclude unresolved invoices from the payment batch. Assign the decision to a named staff role.

When taking on a client, review existing suppliers with missing ABNs and recurring payments covered by statements. Match each statement to the supplies it actually covers. Look for changed activities, unsupported reasons and payments already made without a decision.

For suppliers who quote an ABN, use ABN checks to confirm the quoted details. Keep the result separate from your assessment of a supplier who gives a statement.

The form requires the payer to keep the statement with other supply records for five years. Keep your decision notes and supporting enquiries with it for at least the same period. Apply any longer retention obligation that affects the client’s records. Record retention covers the wider file requirements.

Before releasing a payment batch, confirm that every no-ABN invoice has a recorded outcome and that any withholding reaches the ATO reporting records.