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lkw0113(Master)Master
11 Oct 2024

Hi, if I invest in a US domiciled ETF and earn some dividends, which are withheld by the US government at a 15% rate, by how much can I reduce the Australian taxes I have to pay? Is the offset on a dollar-for-dollar basis, i.e. the reduction in my Australian tax equals the US tax I have paid?


Also, given that the 15% tax on the dividends is a withholding tax and I don't think I have to file a tax return in the US for that (i.e. the tax money is simply grabbed by the US government when the transaction occurs, and no subsequent paperwork is involved), how can I prove to the ATO the amount of tax I have paid in the US?


Thanks a lot!

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knaresbro(Devotee)Devotee
12 Oct 2024

You're presumably declaring the various components of the ETF distribution in the capital gains (Q18) and foreign income (Q20) questions, @lkw0113 . These amounts need to include all the tax that was withheld, and you then claim the foreign tax credit in question 20E.


You don't need to prove it per se. But if you were to be asked by the ATO, your funds' or brokers' statements will show the amounts involved (each of which you converted to AUD).

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Most helpful reply

knaresbro(Devotee)Devotee
12 Oct 2024

You're presumably declaring the various components of the ETF distribution in the capital gains (Q18) and foreign income (Q20) questions, @lkw0113 . These amounts need to include all the tax that was withheld, and you then claim the foreign tax credit in question 20E.


You don't need to prove it per se. But if you were to be asked by the ATO, your funds' or brokers' statements will show the amounts involved (each of which you converted to AUD).

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