We now have some non-resident investors in the fund and am not sure whether we should be withholding some interest on loan for tax on their monthly payments or do they need to address this themselves with the ATO? They are Australians who are currently working overseas so the bank accounts we pay into are domestic, but I understand they are non-residents for tax purposes, could you please advise on below questions:
- Are we required to withhold tax on interest payments made to non-resident investors under Australian tax law, even if the bank accounts we pay into are domestic?
- How do we confirm and document the tax residency status of these investors for withholding tax purposes?
- if withholding tax is required, what is the applicable withholding tax rate for non-residents on interest payments, and are there any specific reporting or remittance requirements?
- Are there any exemptions or reduced rates for withholding tax that apply under double taxation agreements (DTAs) if these investors are working in countries that have tax treaties with Australia?
- If withholding should have been applied but wasn’t, how do we rectify this for past payments to ensure compliance without penalties?
- Is it sufficient to inform the investors of their tax obligations with the ATO, or do we, as the fund, have an obligation to manage withholding and remittance to the ATO?
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180 views
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