Non-residents and intermediaries who act on behalf of non-residents are subject to WHT on the following components of income at a rate of 15% where an effective Exchange of Information Agreement (EOI) is in place for the year ended 30 June 2014:
- Australian 'other' income
- Taxable Australian Real Property (TARP) capital gains
Where no EOI is in place, the appropriate WHT rate on the abovementioned income components is 30% for the year ended 30 June 2014.
Non-residents and intermediaries are also subject to a final WHT on any unfranked dividends (at a rate of 30%) or Australian interest income (at a rate of 10%) that they may receive. These rates may be reduced, depending on whether the investor is a resident of a country with which Australia has negotiated a Double Tax Agreement (DTA).
Where a non-resident invests directly in shares or units in a listed trust, the share registry will withhold tax based upon the information that we provide to them. However, where an intermediary invests in shares, or units in unlisted managed funds or listed trusts on behalf of the non-resident, it will be the responsibility of the intermediary to deduct and withhold any tax for which the non-resident is liable. Examples of intermediaries include custodians, other wrap platforms, trustees of family trusts and trustees of discretionary trusts.
In order for intermediaries to undertake their withholding obligations, the tax law requires that the payers of distributions to non-residents make available the components of income distributed such that the correct rates of withholding can be applied. This information can be accessed through the links to the payers' websites in our 12H and non-residents withholding tax table (link coming soon).
Where a non-resident has changed residency during the year, we have withheld tax at the correct rates, taking into account any change in residency. A residency change may include any of the following examples:
- a resident becoming a non-resident
- a non-resident moving from one overseas country to another overseas country
- a non-resident becoming a resident.
Where a non-resident has changed residency, we will continue to withhold tax in accordance with their original country of residence until we have received all completed and correct paperwork.
Once this paperwork has been received, we will update our systems to apply the correct WHT rates (as per the relevant DTA or EOI rates, as applicable) for unlisted managed funds. In relation to listed securities, we will notify the relevant share registry of any residency change when all completed and correct paperwork is received and they will then update their systems accordingly.