I run an Australian company, but we have some non-resident directors living in South Africa. We pay directors fees.
For the foreign-based directors, do they need to get a tax file number? Do I need to be withholding tax from their directors fees payments?
Hi @Melody2000
Generally when a non-resident based overseas earns employment income (or similar) from Australia this is deemed to be foreign sourced. You don't withhold from these payments unless directed by the tax treaty if one exists between Australia and their resident country.
If non-residents are paid dividends this is slightly different. Franked dividends aren't subject to withholding but unfranked amounts are. The rate depends on if they're resident of a treaty country or not. The company would withhold a final tax before the dividend is paid which means they don't need to do a tax return here.
A TFN won't be necessary if there isn't any Australian tax or super obligations.
Hi @Melody2000
Generally when a non-resident based overseas earns employment income (or similar) from Australia this is deemed to be foreign sourced. You don't withhold from these payments unless directed by the tax treaty if one exists between Australia and their resident country.
If non-residents are paid dividends this is slightly different. Franked dividends aren't subject to withholding but unfranked amounts are. The rate depends on if they're resident of a treaty country or not. The company would withhold a final tax before the dividend is paid which means they don't need to do a tax return here.
A TFN won't be necessary if there isn't any Australian tax or super obligations.
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