Who is mandated to possess a TFN?

A Tax File Number (TFN) is an essential identifier when it comes to tax obligations in Australia. The primary function of the TFN is to help the Australian Taxation Office (ATO) manage taxpayer responsibilities efficiently.

Australian residents and foreign residents earning income in Australia are mandated to possess a TFN because it is crucial for the processing of tax returns, ensuring that the correct amount of tax is withheld, and allowing individuals to access government services. Anyone who earns income within the country is required to have a TFN to comply with tax laws, making it necessary for both local citizens and non-citizens who are residents for tax purposes.

While businesses and corporations, as well as Australian citizens, do need TFNs, it is specifically the combination of Australian residents and foreign residents earning income in Australia that highlights the broad scope of the TFN requirement. Foreign travelers visiting the country, on the other hand, do not require a TFN unless they engage in a form of income-generating activity that necessitates tax compliance. Thus, option C encapsulates the inclusive nature of who needs a TFN based on their earning status in Australia.