Since all objects on the celestial sphere appear to be at the same, arbitrarily large distance from the observer, it is usually not necessary to know the object's true distance.
The reference point on the celestialequator is defined with the aid of another plane, the plane of the Earth's orbit, called the ecliptic.
That intersection where the Sun appears to cross the celestialequator from south to north is chosen as the reference point and is known as the vernal equinox.