Hi there,
I am trying to figure out if a relative of mine (non-resident)has to pay taxes on his bank interests.
I am Quoting the ATO website:
Financial institutions automatically withhold tax from interest earned on accounts held by foreign residents.
If you've given the financial institution your overseas address, the tax will be withheld at the rate of 10%. Without your overseas address, tax is withheld at 47%.
You don't include this interest as income on your Australian tax return.
My relative is getting a 10% withholding for the interest paid to him every month.
However,
- I noted the tax withheld is rounded to the nearest number. Say if interest is $56.91 Only $5 is withheld and not $5.69
- In recent years where monthly interest is low and does not exceed $10s, none is withheld ( I assume that minimum withholding is $1). So there was no interest withheld for some years as the annual interests were very low (~$20)
Am I correct to assume that any monthly interest that is not >$10 will not be liable for tax withholding? and that there are no decimals required for tax withholding? or is the bank just bad at calculating interests?
1,404 views
6 replies