Dividend Withholding Tax in Australia

Dividend Withholding Tax in Australia

Australia levies dividend withholding tax. The Australian dividend withholding tax rate on
“unfranked” distributions to foreign shareholders is 30%. “Franked” dividends are exempt from withholding tax. Franked dividends are dividends distributed from profits that have been subject to Australian corporate income tax. Unfranked dividends are dividends distributed from profits that have not been subject to Australian corporate income tax (for example profits from a tax-exempt sale of an asset). The franking system was setup to avoid double taxation (one at the company level when the profit is generated and then at the shareholder level when that profit is distributed as a dividend).

Australian dividend withholding tax recovery (forms to use, statute of limitations)

Australian dividend withholding tax may be reduced, or in some situations even eliminated, under Australia’s double tax treaties. Generally, the ATO can refund excess non-resident tax withheld if you complete and send the Refund of over-withheld withholding application form no later than four years after the date on which the withholding tax was paid to the ATO (under certain exceptional circumstances the ATO may allow reclaims up to six years after the date on which the withholding tax was paid).

How to get a refund of Australian dividend withholding tax

More detailed information can be found by clicking here.

Learn more about what dividend tax withholding is or about dividend tax withholding in other countries.

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