Fund income tax return instructions 2009

Foreign resident withholding

Subdivision 12-FB of Schedule 1 to the Taxation Administration Act 1953 (TAA 1953) inserted two withholding events for payments made to foreign residents. Only payments prescribed in the Taxation Administration Regulations 1976 are subject to this withholding measure.

Payers are required to withhold at the relevant rate prescribed in the appropriate regulation. The Tax Office may grant a variation to the rate of withholding in special circumstances.

Existing withholding events continue to apply - for example, a foreign resident employee would continue to have an amount withheld under the existing withholding provisions. The existing PAYG machinery will apply to these new withholding obligations. This withholding is not a final tax. These new withholding requirements will not affect existing income tax obligations for foreign residents deriving assessable income in Australia, such as the requirement to lodge a tax return. Any amounts withheld will be available as a credit against the income tax assessment. Gross regulated income subject to foreign resident withholding will not be taken into account in determining the fund's instalment income.

For more information, visit Foreign resident withholding (FRW) - who it affects or phone the Business Infoline on 13 28 66.

Sections within General information

• Election to become a regulated fund
• Switching regulators or changing trustees
• Record keeping requirements
• Foreign exchange (forex) gains and losses
• General value shifting regime
• Debt and equity rules
• Trans-Tasman imputation
• Foreign resident withholding
• Foreign currency translation rules
• Self-determination of foreign income tax offsets
• Assessment
• Objection to self-assessment
• Private rulings by the Commissioner of Taxation
• Payment arrangements