N.Z. Investors Affected By Australian Div. Tax

Press, Volume C, Issue 29524, 27 May 1961, Page 16

N.Z. Investors Affected By Australian Div. Tax

Since July 1. 1960, Australian companies have been deducting a dividend withholding tax from dividends payable to non-residents of Australia. A statement from the office of the Australian High Commissioner suggests some procedures for adoption by New Zealand investors who are affected by this tax. , A non-resident of Australia may accept the withholding tax as his final and only liability for Australian tax on Ms income from dividehde paid Australian companies. In this event, the dividend income need not be included in any return erf income

made to the Australian authorities. The investor may, however, elect that all income derived in an income year from dividends paid by Australian companies be taxed on the ordinary assessment basis. If this election is made, the dividend income, other than that exempt from ordinary income tax, is aggregated with other Australian income, if any. The rate of tax payable on the dividend income is then determined by the total amount of taxable income. Retarted If the tax payable on the dividend income on the assessment basis is less than the withholding tax, the difference (les any other tax due) is refunded. In ascertaining the tax payable on the assessment basis, deductions are allowed for expenses, not of a capital, private or domestic nature, incurred in gaining or producing the assessable income. An example would be interest on money borrowed to purchase the shares from which assessable dividends are received. In the case of an individual whose taxable income is £lO4 or lew no tax is payable on the assessment basis. New Zealand residents who elect to have the assessment basis applied may obtain forms from the Australian Government Trade Commissioner. The Australian income tax ends on June 30, and not on March 31, as in New Zealand. On completing a notice of election form the applicant must show his income derived from Australian sources for the year ended June 30.