Monday, 13 July 2009

That annoying Witholding Tax

Many thanks to HappyWriter who has taken the time and trouble to call the tax office over the annoying business of non-Aus writers having witholding tax deducted from our fees. Here is what she has to say:

If an Australian doesn't supply an ABN number they will have around 46% in tax taken out. Australians can solve this by either getting an ABN number (if they consider themselves a business not hobby)or giving a Statement by Supplier form and ticking the reason they are not supplying an ABN.

For Foreign residents, if you do not supply an ABN number theoretically 10% withholding would be taken out HOWEVER, all you have to do is supply the Statement By Supplier Form, tick the reason you are not supplying an ABN (*the supplier is not entitled to an ABN as they are not carrying on an enterprise in Australia*) and NO TAX should be taken out - at all.

This is the second time I have been given the same advice, and tax office said that if anyone is still taking out tax after they have received your Statement by Supplier Form, then get them to contact the tax office.

The issue is only different if we are talking about, interest, dividends, ROYALTIES, construction, casinos and other specific businesses.

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