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pchyan(Newbie)Newbie
2 Sept 2023

Hi,


I'm currently a tax non-resident of Australia and wish to purchase corporate bonds as an investment. Does a non-resident need to pay tax:


(i) when receiving coupon interest from the bond?

(ii) upon sale or disposal when purchase price is less than sale/disposal price?

(iii) upon maturity when the company redeems the bond and the purchase price is less than redemption?


I've read "Sale or disposal of company bonds and convertible notes" on ATO website, but am unsure if this also applies to non-residents.


Thank you!

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CatherineATO(Community Support)Community Support
4 Sept 2023

Hey @pchyan,


It depends, is the company bond from an Australian company or overseas? A foreign tax resident only has to tell us about Australian-sourced income. A temporary resident is similar. If the bonds are overseas you won't need to declare your payments here. You can read more about foreign and temporary resident income on our website.

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Most helpful reply

CatherineATO(Community Support)Community Support
4 Sept 2023

Hey @pchyan,


It depends, is the company bond from an Australian company or overseas? A foreign tax resident only has to tell us about Australian-sourced income. A temporary resident is similar. If the bonds are overseas you won't need to declare your payments here. You can read more about foreign and temporary resident income on our website.

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pchyan(Newbie)Newbie
5 Sept 2023

Thank you Catherine.

Yes, the bonds are issued from an Australian Company

Based on ATO:

"Sale or disposal of company bonds and convertible notes" on ATO website

https://www.ato.gov.au/Individuals/Tax-return/2022/In-detail/Publications/You-and-your-shares-2022/?page=26


For a non-resident tax resident,

(i) upon sale or disposal of the bond when purchase price is less than sale/disposal price, is this considered other income and the non-resident will need to file a tax return?


(ii) upon maturity when the company redeems the bond and the purchase price is less than redemption, is this considered other income and the non-resident will need to file a tax return?


Thank you!

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Taxes on company bonds and convertible notes for non-residents? | ATO Community