Dividend withholding tax occurs when a company distribute dividends to shareholders that are not based in Australia. A set percentage amount of the dividend is withheld in Australia on behalf of the investor. This applies to investors on individual, company or trust level.
The withholding tax applies to the gross amount of the unfranked dividend. It does not apply to fully franked dividends where the company is distributing earnings in which taxes has been fully paid.
Australia dividend withholding tax is currently set at 30%. This amount is usually fixed unless the beneficiary resides in a country where Australia has a tax treaty. Then the dividend withheld amount is determined by the % agreed between countries in which usually is set at 15%.
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Only residents in that country and beneficiary will be able to benefit from a more favorable dividend withholding regime.
Similarly the interest withholding tax is very similar to principal of dividend withholding tax.