In relation to investment income, a non-resident for tax purposes is not entitled to a tax-free threshold, or to claim certain tax offsets or tax credits that are available to residents. Some income may be subject to final withholding tax as follows: 10% withholding tax of any interest earned from Australian bank accounts if a resident of a non-tax treaty country. Some agreements with tax treaty countries provide an exemption from interest withholding tax in certain circumstances. 30% withholding tax from unfranked dividends if a resident of a non-tax treaty country. Most agreements with treaty countries reduce the rate to 15%. Other rates apply if Australia has a tax treaty with that country. Check our website, for information on which countries Australia has a tax treaty with and the appropriate tax rate for residents of those countries. Income subject to final withholding tax is not required to be shown on an Australian income tax return if a tax return is required. In both situations, the investor must advise the Australian company of their overseas address so that the lower level of tax can be withheld, otherwise tax must be withheld at the higher rate of 45% and the taxpayer may have to apply to the ATO to recover the overpaid tax. When franked dividends are received, no tax is withheld as the company has already paid tax on their behalf. These dividends and franking credits are also not included as assessable income. Royalties are also paid to foreign residents and are subject to final withholding tax. The withholding rate is 30%, unless a tax treaty with that country quotes a different rate. These countries and the applicable rates are available on Most treaties reduce the rate to 10%Royalties paid to foreign residents are reported on the PAYG withholding from interest, dividend and royalty payments paid to non-residents - annual report (NAT 7187) not in the AIIR. Always report the overseas address for investors who are non-residents for tax purposes in the overseas address fields in the Investor data record. If an Australian address is also available, report it in the Australian address fields. Residential or business address details should be reported in preference to postal address. Amounts withheld from interest and dividend payments are reported at the Non-resident withholding amount deducted (7.68) field regardless of the payment type. Amounts withheld from Managed investment trust fund payments are reported at the Amounts withheld from managed investment trust fund payments (7.101) field.
In relation to investment income, a non-resident for tax purposes is not entitled to a tax-free threshold, or to claim certain tax offsets or tax credits that are available to residents. Some income may be subject to final withholding tax as follows: 10% withholding tax of any interest earned from Australian bank accounts if a resident of a non-tax treaty country. Some agreements with tax treaty countries provide an exemption from interest withholding tax in certain circumstances. 30% withholding tax from unfranked dividends if a resident of a non-tax treaty country. Most agreements with treaty countries reduce the rate to 15%. Other rates apply if Australia has a tax treaty with that country. Check our website, for information on which countries Australia has a tax treaty with and the appropriate tax rate for residents of those countries. Income subject to final withholding tax is not required to be shown on an Australian income tax return if a tax return is required. In both situations, the investor must advise the Australian company of their overseas address so that the lower level of tax can be withheld, otherwise tax must be withheld at the higher rate of 45% and the taxpayer may have to apply to the ATO to recover the overpaid tax. When franked dividends are received, no tax is withheld as the company has already paid tax on their behalf. These dividends and franking credits are also not included as assessable income. Royalties are also paid to foreign residents and are subject to final withholding tax. The withholding rate is 30%, unless a tax treaty with that country quotes a different rate. These countries and the applicable rates are available on Most treaties reduce the rate to 10%Royalties paid to foreign residents are reported on the PAYG withholding from interest, dividend and royalty payments paid to non-residents - annual report (NAT 7187) not in the AIIR. Always report the overseas address for investors who are non-residents for tax purposes in the overseas address fields in the Investor data record. If an Australian address is also available, report it in the Australian address fields. Residential or business address details should be reported in preference to postal address. Amounts withheld from interest and dividend payments are reported at the Non-resident withholding amount deducted (7.68) field regardless of the payment type. Amounts withheld from Managed investment trust fund payments are reported at the Amounts withheld from managed investment trust fund payments (7.101) field.
FINAL_AIIR_Companion_Guide_20151019_v2.docx