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Foreign Resident Fully Franked Dividends - Is WHT applicable

Newbie

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An individual is considered a foreign resident for tax purposes in Australia.  They receive a dividend from an Australian company, e.g. BHP.  The dividend statement indicates that the dividend was fully franked: 

 

Franked Amount:     A$1,023.66

Unfranked Amount:  A$0.00

Gross Payment:       A$1,023.66

Franking Credit:       A$438.71

 

1.)  Is any WHT payable on this dividend in Australia? 

2.)  Does the individual omit this dividend from their Australian tax return as it is fully franked?

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Taxicorn

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@ConfusedAc 

 

If you are a non-resident of Australia, the franked amount of dividends you are paid or credited is not subject to Australian income and withholding taxes.

 

The unfranked amount will be subject to withholding tax. However, you are not entitled to any franking tax offset for franked dividends.

 

You cannot use any franking credit attached to franked dividends to reduce the amount of tax payable on other Australian income and you cannot get a refund of the franking credit. You should not include the amount of any franked dividend or any franking credit on your Australian tax return.

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Most helpful response

Taxicorn

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@ConfusedAc 

 

If you are a non-resident of Australia, the franked amount of dividends you are paid or credited is not subject to Australian income and withholding taxes.

 

The unfranked amount will be subject to withholding tax. However, you are not entitled to any franking tax offset for franked dividends.

 

You cannot use any franking credit attached to franked dividends to reduce the amount of tax payable on other Australian income and you cannot get a refund of the franking credit. You should not include the amount of any franked dividend or any franking credit on your Australian tax return.

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Newbie

Replies 1

Thanks. This is what I thought. So as my dividends have all been fully franked, I do not need to disclose them in my Australian tax return as foreign resident.

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Taxicorn

Replies 0

@ConfusedAc 

 

"You should not include the amount of any franked dividend or any franking credit on your Australian tax return".