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Unfranked dividend for non-resident

This post is archived and may not be up-to-date.

Enthusiast

Views 2278

Replies 4

Hi ATO community

 

Fact:

Person A became a non-resident for tax purposes from 1/1/2018.

He reveived unfranked dividend on 1/3/2018. The unfranked dividend was not CFI. No withholding tax was withheld from it.

 

Question:

1. Is the unfranked dividend assessble income?

2. How should this person declare the unfranked dividend in his 2018 tax return?

 

Thank you

Steve

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

Former Community Support

Replies 1

Hi @SteveLi,

 

Thanks for your patience whilst we received information about your query from a specialist area.

 

If a non-resident on a particular day is paid a dividend when they are a non-resident, and it's from an Australian source, this is generally not assessable income (subject to certain exceptions such as the recipient having a permanent establishment in Australia).

 

The receipt is made specifically not taxable where withholding tax is ‘payable’. It doesn't matter whether the withholding has occurred or not. Hence, in this case, subject to any relevant exception, the amount would not be assessable to the recipient. There can be tax issues arising for the payer where non-resident withholding has not been undertaken when it should have been.

 

If you have further questions, we'd encourage you to phone us on 13 28 61 between 8am - 6pm, Monday to Friday to speak with an operator.

 

Thanks, JodieH.

4 REPLIES 4

Former Community Support

Replies 1

Hi @SteveLi,

 

Thanks for getting in touch!

 

We're checking information regarding your query with a specialist area and we hope to get back to you as soon as possible with a response.

 

Thanks, JodieH.

Enthusiast

Replies 0

Thanks @JodieH 

Looking forward to your answer.

Most helpful response

Former Community Support

Replies 1

Hi @SteveLi,

 

Thanks for your patience whilst we received information about your query from a specialist area.

 

If a non-resident on a particular day is paid a dividend when they are a non-resident, and it's from an Australian source, this is generally not assessable income (subject to certain exceptions such as the recipient having a permanent establishment in Australia).

 

The receipt is made specifically not taxable where withholding tax is ‘payable’. It doesn't matter whether the withholding has occurred or not. Hence, in this case, subject to any relevant exception, the amount would not be assessable to the recipient. There can be tax issues arising for the payer where non-resident withholding has not been undertaken when it should have been.

 

If you have further questions, we'd encourage you to phone us on 13 28 61 between 8am - 6pm, Monday to Friday to speak with an operator.

 

Thanks, JodieH.

Enthusiast

Replies 0

Thanks @JodieH 

Smiley Happy

 

What would be the tax issues arising for the payer where non-resident withholding has not been undertaken when it should have been as you mentioned? 

How would ATO handle this? Are there any penalties?