Investment income and royalties paid to foreign residents

• Interest, dividends, royalties and MIT payments
• Who withholds
• When to withhold
• Withholding rate
• Obligations

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 also

• Refund of over-withheld withholding: how to apply
• Managed investment trusts – withholding rules
• Permanent establishments