FRW & NRW

Artcore

Foreign Resident Withholding (FRW) Tax 和 Non-Resident Withholding (NRW) Tax 有什么区别?

对SMSF(Self managed super fund)或 Fund 来说, 这两项在做ITR的时候怎样添?

高分伺候.

Artcore

自问自答.

Foreign Resident Withholding (FRW) Tax is completely different to Non-Resident Withholding (NRW) Tax; I’m almost got myself confused too.

FRW regime refers to FRW requires payers to withhold on payments made to foreign residents for particular types of activities that are listed in regulations to the Taxation Administration Act 1953. These are:

·         payments for promoting or organising casino gaming junket arrangements
·         payments for entertainment and sports activities
·         payments under contracts for the construction, installation and upgrading of buildings, plant and fixtures and for associated activities.

As investment of trusts/partnership (which may involve in all kinds of business activities including above), therefore funds may receive distributions from trusts, partnership or through other income that have these FRW tax credits. However, chances of these credits are rare for SMSF.

On the other hand, under the Pay As You Go (PAYG) system, non-residents are liable for Australian tax on all assessable income earned in Australia. This includes interest, dividend and royalty income. The amount of tax payable depends on whether the recipient is a resident of a country that has a tax treaty with Australia.

To complicate this matter further, read these from ATO website:
(http://www.ato.gov.au/print.asp?doc=/content/33708.htm)

Shares of Credits from Trusts may include the following
* tax withheld because an Australian business number was not quoted
* tax withheld because tax file number was not quoted in relation to interest, dividends or unit trust distributions
* tax withheld from income:
   > received by a resident from which an amount of tax was withheld because of the imposition of non-resident withholding tax
   > from a fund payment made to a foreign resident by a managed investment trust from which an amount of tax was withheld
   > from which an amount of tax was withheld because of the operation of foreign resident withholding
* other credits for tax paid by a trustee on trust income.

However, on the SMSF Annual Return and Fund ITR, I can’t locate the credits for Non-Resident Withholding Tax at all, not sure how we report this if a fund receives trusts distribution with share of NRW tax credits, may need to raise with ATO directly.