Private ruling: Exemption from Australian withholding tax
Published: July 2014
Ruling period: Year ending 30 June 2015 | Year ending 30 June 2016 | Year ending 30 June 2017 | Year ending 30 June 2018
Date scheme commenced: 1 July 2014

Ruling: Q1: Are you, an Australian resident company, required to withhold an amount from payments of dividends or interest to a foreign company, in its capacity as trustee of a bare trust of which the foreign pension funds are ultimate beneficiaries? | A1: No.

Relevant facts and circumstances: The applicant has applied for a private ruling to confirm that it is not required to withhold an amount from payments of dividends and interest to a foreign company, in its capacity as trustee of a bare trust for which foreign pension funds are ultimate beneficiaries.

Relevant legislative provisions: Income Tax Assessment Act 1936 Paragraph 128B(3)(jb). | Taxation Administration Act 1953 Section 12-210 of Schedule 1 | Taxation Administration Act 1953 Section 12-245 of Schedule 1 | Taxation Administration Act 1953 Subsection 12-300(a) of Schedule 1

Reasons for decision: Summary: The requirements that an Australian resident company must satisfy if it is paying interest, royalties or dividends to a non-resident overseas pension fund are set out in Subdivision 12-F of Schedule 1 to the Tax Administration Act 1953 (TAA). Australian resident companies are required under section 12-210 of Schedule 1 to the TAA to withhold from dividend payments, where the recipient has an address outside of Australia or the payer is authorised to pay the dividend to a foreign pension fund who is located outside of Australia. Australian resident companies are required under section 12-245 of Schedule 1 to the TAA to withhold from interest payments, where the recipient has an address outside of Australia or the payer is authorised to pay the interest to a foreign pension fund at a place outside of Australia. While the beneficiaries of the bare trust are located outside of Australia, as they are exempt from withholding tax on dividend and interest payments, the Australian company is not required to withhold tax from dividend and interest payments made to the trustee of the bare trust of which the pension funds are ultimate beneficiaries under subsection 12-300(a) of Schedule 1 to the TAA.