Withholding tax and rates for foreign investors policy

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(Initiate)Initiate

14 Aug 2024

I am a foreign investor living in Hong Kong and have bought the shares of four Australian enterprises as investment. Lately I was advised by one of the enterprises that I need to pay withholding tax @45% if I choose to receive their final dividend payable in September 2024. And no indication of withholding tax was indicated on their document if I choose to reinvest. However, I have been charged with a 30% withholding tax in March this year as I had opted for reinvestment. While I do not need to file any tax return to the ATO and have not sold any shares of that enterprise up till now, would you please advise if I am entitled to claim a refund of the withholding tax paid for 2024?

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knaresbro

(Devotee)Devotee

16 Aug 2024

It sounds like you may not have the correct information linked to your shareholdings if you're seeing different behaviour, @Ask-Wong .

If the taxes are correct, you'd presumably declare them in your local tax return and get a credit for the tax paid. (In an ATO return it's a "foreign tax credit".)

Take a look at the following ATO page and any relevent treaty to see what should be happening.

https://www.ato.gov.au/individuals-and-families/investments-and-assets/interest-unfranked-dividends-and-royalties

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knaresbro

(Devotee)Devotee

16 Aug 2024

It sounds like you may not have the correct information linked to your shareholdings if you're seeing different behaviour, @Ask-Wong .

If the taxes are correct, you'd presumably declare them in your local tax return and get a credit for the tax paid. (In an ATO return it's a "foreign tax credit".)

Take a look at the following ATO page and any relevent treaty to see what should be happening.

https://www.ato.gov.au/individuals-and-families/investments-and-assets/interest-unfranked-dividends-and-royalties

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Ask-Wong

(Initiate)Initiate

23 Aug 2024

Thank you for your kind response. The question is I don't have to file any local tax return with ATO.

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Matt_ATO

(Community Support)Community Support

18 Aug 2024

Howdy @Ask-Wong,

As a foreign investor, you may be entitled to claim a refund of over-withheld withholding tax.

If too much withholding tax has been withheld from your dividend payments, you can apply for a refund. This applies to:

both interest and
dividend payments.

You need to complete the “Refund of over-withheld withholding application form” (NAT 75265). This form is specifically for non-residents and can be completed online or printed and mailed to us.

Ensure you attach all necessary evidence to support your application. This includes documentation showing: