Collection of TFNs is authorised, and its use and disclosure is regulated by the tax laws and Privacy Act. Investors are not required to provide their TFN and declining to do so is not an offence. However, if an investor does not provide a TFN (including both TFNs for joint accounts) or claim an exemption, then we are required to withhold tax (at the highest marginal tax rate plus the Medicare Levy) from any income earned on their account (eg interest, dividends and distributions). For further information, please contact the Australian Taxation Office.
TFN WHT represents the amount of tax withheld from income where no TFN has been provided by the investor. The amount of TFN WHT will be disclosed on the Tax Reports. As noted above, tax will be withheld at the highest marginal tax rate plus the Medicare levy for the current year.
TFN WHT will be deducted where the investor does not provide any one of the following:
- a TFN
- an Australian Business Number (ABN)
- an exemption reason (eg they are a charity).
TFN WHT will be deducted at the time that the dividend, interest or distribution payment is made.
No. For example, if a husband and wife hold an investment jointly, neither will be regarded as having quoted a TFN in relation to the investment unless both have quoted a TFN, ABN or an exemption reason. As a result, where only one account holder has quoted their TFN, TFN WHT will be required to be deducted on the whole income amount.
If a non-resident holds a joint account with an Australian resident, the resident must quote their TFN, ABN or claim an exemption reason in order to avoid TFN WHT being deducted. Other non-resident withholding taxes will be deducted as appropriate. In these circumstances, the resident may be entitled to a credit for these amounts.
Taxpayers who are subject to non-resident withholding should advise of their non-resident status and provide their overseas address. Where no overseas address is provided for the non-resident account holder, a higher rate of tax may be withheld from the whole income amount.