Australian Expat Taxes Explained : Non-Resident Withholding Tax

non-resident withholding tax australian expats australian expat taxes

If you are a non-resident for Australian tax purposes, then you will be liable for non-resident withholding tax on certain types of income in Australia.  We explain.

Non-resident withholding tax applies to interest and unfranked dividends earned in Australia by a non-resident taxpayer.

If you are a non-resident for Australian tax purposes, you need to advise the company (usually through the share registry) or financial institution (that you earn unfranked dividends or interest from) that you are a non-resident, as well as advising them of your country of residence.

The usual non-resident withholding tax rate is 30%, however this may be reduced if the country you are residing in has a double taxation agreement with Australia.  The company (in the case of dividends) or the financial institution (in the case of interest) will withhold tax at the time of payment.

Non-resident withholding tax is a final tax, and you will not need to include this income in an Australian tax return, nor pay any further tax on the income in Australia.

As a non-resident for Australian tax purposes, if your only Australian-sourced income is from dividends and interest, and you have had non-resident withholding tax correctly withheld from your income, then you may not need to file an Australian tax return.  Our article, Do Australian expats need to file an Australian tax return? has more information.

Countries With Which Australia Has Treaty Countries with which Australia has no Treaty
Interest 0-10%** 10%
Unfranked Dividends Most agreements 15% 30%
Franked Dividends* 0% 0%

* Franking credits are not available to non-residents

** Exact non-resident withholding tax rate depends on country of residence

A list of countries Australia has entered into a double taxation agreement / international tax treaty is found here.

Disclaimer : This information is for educational purposes only and does not constitute financial or taxation advice. As this information is not advice and has been prepared without taking into account your objectives, financial situation or needs you should, before acting on this information, consider its appropriateness for your circumstances. Independent advice should be obtained from an Australian financial services licensee before making investment decisions, and a registered (tax) financial advisor/accountant in relation to taxation decisions. To the extent permitted by law, we exclude all liability for any loss or damage arising in any way.

Are you a non-resident needing Australian taxation advice?

If you need to file an Australian tax return, or need tax planning advice as an Australian expat, contact our partners at GM Expat Tax using the form below.  GM Expat Tax is a firm of accountants specialising in assisting Australian expats living and working around the world.

GM Expat Tax

  • GM Expat Tax Inquiry Form

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About the author

Craig

Craig is an Australian Expat and the founder of The Australian Expat Investor. Craig is passionate about investing, and while Craig cannot give personal financial or tax advice, Craig enjoys sharing investing, tax, and other tips for Australian expats to help them to build their wealth while living abroad and get the most out of their time living overseas. Get his free ebook on 9 Financial Surprises That Could Cost Australian Expats Thousands of Dollars

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