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Withholding rules

Last updated 21 February 2023

MITs (including AMITs) are required to withhold an amount of income tax when making certain payments to a non-resident member.

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.

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