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Withholding rules

MITs and AMITs must withhold income tax when making certain payments to a non-resident member.

Last updated 23 July 2025

The tax withheld is a final tax on the non-resident's Australian earnings and will usually match the amount of the taxpayer's subsequent tax liability on the income.

The rate of tax to be withheld from payments to non-resident members will vary according to whether the member is a resident of a country that has a tax treaty or exchange of information agreement with Australia, and whether the amount is either:

  • a payment of dividends, interest and royalties (DIR)
  • a 'fund payment'.

A member is generally subject to withholding where their residential address or the place of payment is outside of Australia.

 

The withholding obligations for a MIT or an AMIT depend on whether or not it is a withholding MIT.

How aspects of the attribution regime for MITs affect the withholding requirements for AMITs.

Withholding MITs and custodians may be required to withhold an amount from a fund payment.

A MIT or AMIT must withhold from unfranked dividends, interest and royalty payments to foreign resident members.

Information for to trustees of qualifying MITs that choose to apply the MIT rules that were enacted on 5 May 2016.

Withholding tax on selected payments from Australian MITs and AMITs is a final tax imposed on foreign residents.

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