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Fully Franked dividend to non-resident

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Newbie

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Hi, I see the ATO website mentioned that "the unfranked component of each of those payments is subject to a final withholding tax." So I am wondering what is the tax situation for the fully franked dividend for a non-resident of Australia? If the non-resident is a tax resident of a country with no Tax Treaty with Australia, does he still need to pay tax/do we still have to withhold tax? Thank you 

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Devotee

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Hi @Lian,

 

Thanks for your post! If your company pays dividends to non-resident shareholders, you must issue a statement to your shareholder indicating the extent the dividend is franked, and you do not have to withhold tax from your non-resident shareholders if the dividends you pay have been fully franked.

 

Foreign residents do not have to pay us any more tax if their only Australian income is from interest, dividends and royalties which have had the correct amount of withholding tax withheld. In some circumstances, a foreign resident may require a certificate of payment to provide to the tax authorities in their home country.

 

Hope that helps!

1 REPLY 1
Highlighted

Best answer

Devotee

Replies 0

Hi @Lian,

 

Thanks for your post! If your company pays dividends to non-resident shareholders, you must issue a statement to your shareholder indicating the extent the dividend is franked, and you do not have to withhold tax from your non-resident shareholders if the dividends you pay have been fully franked.

 

Foreign residents do not have to pay us any more tax if their only Australian income is from interest, dividends and royalties which have had the correct amount of withholding tax withheld. In some circumstances, a foreign resident may require a certificate of payment to provide to the tax authorities in their home country.

 

Hope that helps!