We have a company that is an Australian tax resident. It has an Australian director and operates a business in Australia. The shareholder is a foreign resident. The shareholder has lent money to the Australian company and the Australian company pays interest to the foreign company. There is a double tax agreement with the foreign resident's company. However this DTA does not reduce the non-resident withholding tax from the standard 10%. Previous accountants have not advised that we need to withold tax on this interest payment. The new accountant has advised we do. Are we exempt from withholding from this payment as the party is related? Or are there any other exemptions to the withholding tax? We have reviewed the legislation and can't seem to see any.
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589 views
1 replies
Hi @Classmate,
I'm really pleased your new accountant advised you correctly.
True, there are some tax laws where the relationship of two entities are taken into consideration.
The 10% withholding from interest is still applicable in your scenario.
If you haven't seen it already we've some great information on our website about withholding from non residents.
All replies
Hi @Classmate,
I'm really pleased your new accountant advised you correctly.
True, there are some tax laws where the relationship of two entities are taken into consideration.
The 10% withholding from interest is still applicable in your scenario.
If you haven't seen it already we've some great information on our website about withholding from non residents.