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Edited version of private advice
Authorisation Number: 1012651029851
Ruling
Subject: Foreign pension fund and exemption from withholding tax
Question and answer
1. Are you required to withhold an amount from payments of dividends or interest to a foreign pension fund, in your capacity as trustee of the bare trust of which the foreign pension funds are ultimate beneficiaries?
No
This ruling applies for the following period:
Year ending 30 June 2015
Year ending 30 June 2016
Year ending 30 June 2017
Year ending 30 June 2018
The scheme commenced on
1 July 2014.
Relevant facts and circumstances:
The applicant has applied for a private ruling for a trustee of a bare trust for which foreign pension funds are ultimate beneficiaries
Relevant legislative provisions:
Income Tax Assessment Act 1936 Paragraph 128B(3)(jb).
Taxation Administration Act 1953 section 12-210
Taxation Administration Act 1953 section 12-245
Taxation Administration Act 1953 subsection 12-300(a)
Reasons for decision
The requirements that an Australia resident company must satisfying if it is paying interest, royalties or dividends to a non resident overseas pension fund are set out in Subdivision 12-F of Schedule 1 to the Tax Administration Act 1953 (TAA).
Australian resident companies are required under section 12-210 of schedule 1 of the TAA to withhold from dividend payments, where the recipient has an address outside of Australia or the payer is authorised to pay the dividend to a foreign pension fund who is located outside of Australia.
Australian resident companies are required under section 12-245 of schedule 1 of the TAA to withhold from interest payments, where the recipient has an address outside of Australia or the payer is authorised to pay the interest to a foreign pension fund at a place outside of Australia.
While the beneficiaries of the bare trust are located outside of Australia, as they are exempt from withholding tax on dividend and interest payments, FIAHPL is not required to withhold tax from dividend and interest payments made to the trustee of the pension funds under subsection 12-300(a) of schedule 1 of the TAA.