Income Tax (Dividends, Interest and Royalties Withholding Tax) Act 1974
Act No. 27 of 1974 as amended
This compilation was prepared on 28 September 2007
taking into account amendments up to Act No. 143 of 2007
The text of any of those amendments not in force
on that date is appended in the Notes section
The operation of amendments that have been incorporated may be
affected by application provisions that are set out in the Notes section
Prepared by the Office of Legislative Drafting and Publishing,
Attorney‑General’s Department, Canberra
Contents
1 Short title [see Note 1]...........................
2 Commencement [see Note 1].......................
4 Definition...................................
5 Incorporation.................................
6 Imposition of tax...............................
7 Rates of tax..................................
Notes
An Act to impose Income Tax upon certain Dividends, Interest and Royalties derived by Non‑residents and by certain other Persons
1 Short title [see Note 1]
This Act may be cited as the Income Tax (Dividends, Interest and Royalties Withholding Tax) Act 1974.
2 Commencement [see Note 1]
This Act shall come into operation on the day on which it receives the Royal Assent.
4 Definition
In this Act, the Assessment Act means the Income Tax Assessment Act 1936.
5 Incorporation
The Assessment Act is incorporated and shall be read as one with this Act.
6 Imposition of tax
The tax known as income tax, to the extent that that tax is payable in accordance with section 128B of the Assessment Act, is imposed on income to which that section applies.
7 Rates of tax
The rates of income tax imposed by this Act are:
(a) in respect of income to which subsection 128B(4) of the Assessment Act applies—30%; and
(b) in respect of income to which subsection (5) of that section applies—10%; and
(c) in respect of income to which subsection (5A) of that section applies—30%.
Notes to the Income Tax (Dividends, Interest and Royalties Withholding Tax) Act 1974
Note 1
The Income Tax (Dividends, Interest and Royalties Withholding Tax) Act 1974 as shown in this compilation comprises Act No. 27, 1974 amended as indicated in the Tables below.
Table of Acts
Act | Number
and year | Date
of Assent | Date of commencement | Application, saving or transitional provisions |
Income Tax (Dividends and Interest Withholding Tax) Act 1974 | 27, 1974 | 1 Aug 1974 | 1 Aug 1974 | |
Income Tax (Dividends and Interest Withholding Tax) Amendment Act 1992 | 199, 1992 | 21 Dec 1992 | 24 Dec 1992 (see s. 2) | — |
Tax Laws Amendment (2007 Measures No. 4) Act 2007 | 143, 2007 | 24 Sept 2007 | Schedule 7 (items 69–72): Royal Assent | — |
Table of Amendments
ad. = added or inserted am. = amended rep. = repealed rs. = repealed and substituted |
Provision affected | How affected |
Title.................... | am. No. 199, 1992 |
S. 1.................... | am. No. 199, 1992 |
S. 3.................... | rep. No. 143, 2007 |
S. 4.................... | am. No. 143, 2007 |
S. 6.................... | rs. No. 199, 1992 |
S. 7.................... | am. No. 199, 1992; No. 143, 2007 |
S. 8.................... | rep. No. 143, 2007 |
Overview
The Income Tax (Dividends, Interest and Royalties Withholding Tax) Act 1974 (Cth) was enacted to address the need for withholding tax on certain income derived by non-residents and other specified entities. This Act was brought into force on the day it received Royal Assent and is administered by the Commonwealth of Australia. The policy objective of this Act is to impose income tax on specified types of income, namely dividends, interest, and royalties, to ensure that non-residents and other specified entities contribute their fair share of tax to the Australian economy. The Act achieves this by incorporating the Income Tax Assessment Act 1936 and imposing tax rates at 10%, 30%, or as specified under subsections 128B(4), (5), and (5A) of the Assessment Act.
Scope and Application
The Income Tax (Dividends, Interest and Royalties Withholding Tax) Act 1974 applies to the imposition of income tax on certain dividends, interest, and royalties derived by non-residents and certain other persons. It incorporates and is to be read as one with the Income Tax Assessment Act 1936. The Act is of Commonwealth jurisdiction and applies to all entities and individuals deriving specified income within Australia, regardless of their residency. The Act sets out the rates of tax for different types of income and includes mechanisms for the application of these rates through the Assessment Act. The Act’s scope can be extended or modified through subordinate instruments, allowing for adjustments in tax rates or the inclusion of new types of income under its purview. The Act does not specify any exclusions or exemptions beyond what is outlined in the Assessment Act, nor does it set explicit thresholds for income that would be exempt from its application.
Key Provisions
The Income Tax (Dividends, Interest and Royalties Withholding Tax) Act 1974 (the Act) sets out the provisions for the withholding of income tax from dividends, interest, and royalties. Section 6 of the Act imposes the tax known as income tax on income to which section 128B of the Income Tax Assessment Act 1936 (Assessment Act) applies. This includes tax on certain dividends, interest, and royalties derived by non-residents and by certain other persons. The rates of tax are specified in section 7, which sets out a 30% tax rate for certain dividends and royalties, and a 10% tax rate for certain interest.
The Act imposes several obligations on the parties it governs. For instance, section 6 effectively incorporates the Assessment Act, treating it as part of the Act itself. This means that the provisions of the Assessment Act apply to the operations of the Act. Furthermore, taxpayers and withholding agents must comply with the requirements to withhold and remit tax as specified in section 128B of the Assessment Act. This includes accurately calculating the amount of tax to be withheld based on the rates outlined in section 7 and ensuring timely payment of this tax to the Commissioner of Taxation.
In terms of penalties and consequences for non-compliance, the Act does not explicitly state penalties within its text but references the Assessment Act, where penalties are detailed. Generally, failure to comply with the withholding and remittance obligations can lead to civil penalties, which may include fines up to a certain percentage of the unpaid tax. Additionally, persistent or deliberate non-compliance might result in more severe penalties, including imprisonment, as per the provisions of the Assessment Act. The specific maximum penalties would depend on the nature and extent of the non-compliance, as outlined in the relevant sections of the Assessment Act.