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Investment income and royalties paid to foreign residents

Withholding from interest, dividends, royalties or managed investment trust income you pay to foreign residents.

Last updated 5 December 2022

You may be required to withhold tax from investment income and royalties paid to foreign residents.

If you pay interest, dividends, royalties or managed investment trust (MIT) payments to foreign residents, you will generally withhold the final tax amount. For dividend payments, you will only withhold from the unfranked component.

If the amount you withhold is not the same as the amount the payee owes, they:

  • can apply for a refund if the amount of withholding tax paid to us is greater than tax owed
  • must make a top-up payment if the amount previously paid to us is less than the tax owed.

Australian payers:

  • must withhold amounts from the payments they make
  • can be an Australian resident or foreign resident with a permanent establishment in Australia.

See Refund of over-withheld withholding: how to apply, Managed investment trusts – withholding rules and Permanent establishments for more information.

If you pay investment income or royalties to foreign residents, you may need to withhold tax.

In certain circumstances you must withhold tax from the interest or royalties you pay.

Learn when you should withhold tax from interest, dividends and royalties you pay to a foreign resident.

Find out about withholding rates for Joint accounts and Australian resident living overseas temporarily.

Both you and the payee have obligations you must meet with regards to withholding from investment income and royalties.