The Australian Taxation Office (ATO) has published guidance regarding withholding tax obligations related to specific payments made to non-residents on 1 August, 2024.
The guidance provides clarification, ensuring taxpayers are aware of their withholding tax obligations. It also explains taxpayers who have to pay interest, dividends, or royalties to a non-resident may need to meet certain withholding tax requirements that include:
- Lodgment of a PAYG annual report (PAYG withholding from interest, dividend, and royalty payments paid to non-residents – annual report) or annual investment income report;
- Payment of withholding tax.
Taxpayers may still be liable for withholding tax obligations even if the interest has not been paid. In addition, it provides guidance on how to classify and report deductions for payments subject to withholding to a non-resident at the correct label in the income tax return and international dealings schedule and satisfy the eligibility criteria to claim and get substantiated tax treaty relief.
