Foreign resident withholding (FRW) - who it affects

Foreign resident withholding (FRW) is part of the pay as you go (PAYG) withholding system. FRW requires payers to withhold on payments made to foreign residents for particular types of activities that are listed in regulations to the Taxation Administration Act 1953. These are payments:

  • for promoting or organising casino gaming junket arrangements
  • for entertainment and sports activities
  • under contracts for the construction, installation and upgrading of buildings, plant and fixtures and for associated activities.

The rate of withholding is set at a default rate that can be varied to match the expected tax payable in particular cases by applying to the Australian Taxation Office.

The FRW does not affect existing PAYG and non-resident withholding obligations on interest, dividend and royalty payments made to foreign residents who are engaged as employees.

An annual tax return should be lodged by the foreign resident, and the FRW amounts withheld are a credit against the tax assessed.

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    Last modified: 28 Jun 2012QC 17765