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Ruling
Subject: Australian Withholding Tax Exemption
Issue
Are dividends, non-share dividends and interest paid to the trustee of a superannuation fund for foreign residents, income to which paragraph 128B(3)(jb) of the Income Tax Assessment Act 1936 (ITAA 1936) applies?
Answer
Yes. The dividends, non-share dividends and interest paid to the trustee of the superannuation fund for foreign residents is income to which paragraph 128B(3)(jb) of the Income Tax Assessment Act 1936 (ITAA 1936) applies.
Facts
The fund and foreign corporation are 'non-residents' as defined in subsection 6(1) of the ITAA 1936.
The foreign corporation's employees past and present are the beneficiaries of the superannuation fund (the fund).
The fund was established in the taxpayer's country of residence and is a superannuation fund for foreign residents under section 118-520 of the Income Tax Assessment Act 1997 (ITAA 1997) and a 'foreign superannuation fund' under the definition of that term in subsection 995-1(1) of the ITAA 1997.
The trustees of the fund derived income consisting of dividends and interest paid by Australian resident companies.
Reasons for Decision
The income is derived by the trustees in its capacity as the operator of the superannuation fund. Therefore, the superannuation fund derives the income in accordance with subparagraph 128B(3)(jb)(i) of the ITAA 1936.
Given that subsection 128A(10) of the ITAA 1936 treats the trustee to be the non-resident, the Commissioner considers that, where a superannuation fund for foreign residents is a trust, the phrase 'a non-resident that is a superannuation fund for foreign residents' is for the purposes of subparagraph 128B(3)(jb)(i) of the ITAA 1936 a reference to a non-resident that is the person acting in its capacity as the trustee of a superannuation fund for foreign residents.
Accordingly, the Commissioner accepts that the taxpayer is 'a non-resident that is a superannuation fund for foreign residents' for the purposes subparagraph 128B(3)(jb)(i) of the ITAA 1936.