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CANADA AU TAX Treaty

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Hi there, 
I recently received my DASP. The statutory AU withholding tax rate is 35% - and this is what was withheld, however it is my understanding that per the Canada AU Tax Treaty the tax on pension payments is limited to 15%. I contacted the supperannuation company I was with and they said they are not aware of this treaty and told me to contact the ATO. I am not sure how to go about finding out more about this? If you could please help I am not sure who to contact in regards to this matter but I thought I would start with Mercy Super. 
Thank you, 
 
 
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Devotee

Replies 0

Hi leaducharme

 

I googled and found the treaty I believe you're referring to.

 

Article 18 is the relevant one.

 

But this relates to pensions and annuities, not lump sum payments. ie ongoing payments from a pension fund or annuity provider, not one off payments from a super fund. I couldn't find anything in the treaty relating to the taxation of lump sum amounts.

 

Pensions and annuities are generally only payable from retirement age, age 60 or so. And the tax from age 60 on a pension or annuity is generally 0% in Australia, so the 15% upper limit rule would rarely be invoked.

 

Anyway. A DASP isn't a pension or an annuity. It's a lump sum payment. So the 15% upper limit doesn't apply to it.

 

I'm an ATO employee voluntarily providing my time here

1 REPLY 1

Most helpful response

Devotee

Replies 0

Hi leaducharme

 

I googled and found the treaty I believe you're referring to.

 

Article 18 is the relevant one.

 

But this relates to pensions and annuities, not lump sum payments. ie ongoing payments from a pension fund or annuity provider, not one off payments from a super fund. I couldn't find anything in the treaty relating to the taxation of lump sum amounts.

 

Pensions and annuities are generally only payable from retirement age, age 60 or so. And the tax from age 60 on a pension or annuity is generally 0% in Australia, so the 15% upper limit rule would rarely be invoked.

 

Anyway. A DASP isn't a pension or an annuity. It's a lump sum payment. So the 15% upper limit doesn't apply to it.

 

I'm an ATO employee voluntarily providing my time here