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Provisions relating to international taxation

Last updated 15 April 2018

Withholding tax

The debt/equity rules will apply to Division 11A of Part III of the Income Tax Assessment Act 1936 except where the sections relate to levels of ownership. Therefore, apart from these sections, the Division will apply to a non-share dividend in the same way as it applies to a dividend.

Division 11A imposes a withholding tax on Australian sourced dividends, interest and royalties paid to non–residents. For the purpose of determining the boundary between interest and dividend withholding tax, interest withholding tax may apply to a non-equity share rather than dividend withholding tax. To the extent to which an amount is a return on an equity interest, interest withholding tax will not apply.