Tax rate Australian dividend income

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So I stumbled upon this seemingly new part of the forum last night trying to find an answer to a share dividend tax question and given i appear to have lost my ability to Google thought I would pose it here.

 

Anyway the question is what is the tax rate on non franked dividend income from Australian shares for a non resident for tax purposes living in Thailand.

 

 

I've looked at the tax treaty but nothing jumped of the page in the form of an answer for me.

[AlexRRR]

I would think your taxed on your marginal rate, other words your total income and the tax bracket you fall into..

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On 8/3/2021 at 2:33 PM, AlexRRR said:

I would think your taxed on your marginal rate, other words your total income and the tax bracket you fall into..

Thanks. 

 

But if you look at the image that I included I'm making specific reference to the "most agreements reduce the rate to 15%".

 

I guess I'm after a conclusive answer not speculation.

[Mr Wong]

Hi . . . the ATO's definition of a non residemt is being outside of Australia for > 6 months pa. As a non resident there is zero threshold, every single dollar is taxed starting at 30 cents in the dollar. 

There is an exception courtesy of ATO legislation introduced by the Howard / Costello government . . . to improve liquidity of the ASX, foreign investment in the ASX was encouraged by waiving capital gains tax (and losses).  A foreign investor in the ASX is required to pay 30% witholding tax on dividends . . . if however the dividend is fully franked then the tax is already paid and no further payment is required . . . however if the dividend is unfranked then the ATO will want 30% with-holding tax.

The capital gains tax exemption does not apply to real estate or any listed company on the ASX company that sources its income from real estate. 

If for example one was deriving income from renting out property in Australia . . . there is zero tax threshold and tax starts at 30% from the very first dollar.

 

 

 

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On 8/20/2021 at 5:41 PM, Mr Wong said:

Hi . . . the ATO's definition of a non residemt is being outside of Australia for > 6 months pa. As a non resident there is zero threshold, every single dollar is taxed starting at 30 cents in the dollar. 

There is an exception courtesy of ATO legislation introduced by the Howard / Costello government . . . to improve liquidity of the ASX, foreign investment in the ASX was encouraged by waiving capital gains tax (and losses).  A foreign investor in the ASX is required to pay 30% witholding tax on dividends . . . if however the dividend is fully franked then the tax is already paid and no further payment is required . . . however if the dividend is unfranked then the ATO will want 30% with-holding tax.

The capital gains tax exemption does not apply to real estate or any listed company on the ASX company that sources its income from real estate. 

If for example one was deriving income from renting out property in Australia . . . there is zero tax threshold and tax starts at 30% from the very first dollar.

 

 

 

Thanks for your reply.

 

But I just want to correct something.

 

The ATO does not have a simple test, such as being outside of Australia for 6 months to determine tax residency. In fact they are looking at changing the laws currently because it is so convoluted and difficult for individuals to determine their tax residency.

 

Also if you go back and read my original post I am trying to determine the tax rate in Thailand on unfranked dividends. Table that I have inserted in that post is directly from the ATO website and I am particularly interested in the " most agreements reduce the rate to 15%" section. 

 

I have looked at the tax treaty between the two countries and I was unable to find anything. So I thought I would come here to see if anybody had encountered this specific issue

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I just wanted to give this topic a bump because maybe more people follow this part of the forum now and I didn't receive an answer to my original post previously.

 

Just hoping someone can give me a definitive answer. It's not particularly relevant to me in my current situation but it's just arming myself with information for a fallback position.

[KhunHeineken]

It's possible what you are referring to is the tax equalization scheme, where treaties are in place.  If you are an Australian citizen working overseas, as a non resident for taxation purposes, you are taxed at a high rate, but you are already paying tax in the country you are working in, so they minus the percentage of tax you are paying in the country you are working from your non resident tax rate.  

 

As an example, say you are working in Thailand paying 10% tax, but Australia's rate for you is 48%, Australia only taxes you 38% because you have already paid 10%.   

[1]

8 hours ago, KhunHeineken said:

It's possible what you are referring to is the tax equalization scheme, where treaties are in place.  If you are an Australian citizen working overseas, as a non resident for taxation purposes, you are taxed at a high rate, but you are already paying tax in the country you are working in, so they minus the percentage of tax you are paying in the country you are working from your non resident tax rate.  

 

As an example, say you are working in Thailand paying 10% tax, but Australia's rate for you is 48%, Australia only taxes you 38% because you have already paid 10%.   

Thanks for the detailed response.

A lot of information there I wasn't aware of.

 

But what I'm asking is specifically relating to unfranked dividend income which the included screenshot says most countries reduce to 15%. I saw nothing in the tax treaties that talk specifically about this and the ATO website has nothing I can find specifically relating to Thailand.

 

Hence the topic!