Both you and the payee have obligations that you must meet with regards to withholding from investment income and royalties.
- withhold tax from the payments you pay to foreign residents
- pay the amounts you withhold to us
- issue payment summaries to your payees
- lodge a PAYG withholding from interest, dividend and royalty payments paid to non-residents – annual report.
You do not have to lodge this annual report if you have correctly reported interest or dividend payments to foreign residents in an annual investment income report (AIIR).
Foreign residents do not have to pay us any more tax if their only Australian income is from interest, dividends and royalties which have had the correct amount of withholding tax withheld.
Foreign resident payees must lodge an Australian tax return if they have assessable income other than interest, dividends or royalties in Australia.
Certificates of payment
A foreign resident payee may require a certificate of payment to provide the tax authorities in their home country.
We will issue a certificate of payment for a foreign resident payee who has had amounts withheld under Australian non-resident interest, dividend or royalty withholding where they require proof of payment to comply with their home country’s taxation requirements.
We only issue certificates of payment for payees whose country of residence has a double tax agreement (DTA) tax treaty with Australia.
Applications for certificates of payment should be:
- made by the payer who withheld tax from the relevant payments
- completed only if the payee has advised their payer they need to obtain a certificate of payment.
To request a certificate of payment, payers must:
- complete the Application for certificate of payment (NAT 6408)
- make the request at the end of the financial year of the country that needs the certificate (most countries that have a tax treaty with Australia have a financial year ending 31 December).
To meet Australian tax law requirements, a payment summary must still be issued in addition to a certificate of payment.
See alsoWithholding from interest, dividends, royalties or managed investment trust income you pay to foreign residents.