Can you explain withhoding tax?

[hedgehog]

I am filling some in forms for opening a oz bank account here is one question on the form:

 

''IF NON RESIDENT, DEDUCT WITHHOLDING TAX?

(TICK NO IF NO EXEMPTION CERTIFCATE HELD)

 

can anyone explain what this is and how it applies we are on a skilled 136 visa.

[Guest nev_n_angie]

I am filling some in forms for opening a oz bank account here is one question on the form:

 

''IF NON RESIDENT, DEDUCT WITHHOLDING TAX?

(TICK NO IF NO EXEMPTION CERTIFCATE HELD)

 

can anyone explain what this is and how it applies we are on a skilled 136 visa.

Are you a resident in Australia? Or still in UK?

 

If you're in UK - TICK IT!

 

We got stabbed with it and they witheld 46% of our interest for TAX!"

 

If you're a non resident (not living in OZ) you will be charged 10% Tax on the interest earned in your Bank Account.

 

Once you're in Australia, apply for a tax file number.

 

Angie

[Guest BullcreekBob]

I am filling some in forms for opening a oz bank account here is one question on the form:

 

''IF NON RESIDENT, DEDUCT WITHHOLDING TAX?

(TICK NO IF NO EXEMPTION CERTIFCATE HELD)

 

can anyone explain what this is and how it applies we are on a skilled 136 visa.

 

G'day

 

Here in Oz any interest you earn forms part of your total income and at the end of every year you declare it in your tax return and pay tax on it. The banks also are required to tell the tax dept who they gave interest money too.

 

If you are a resident, and you have given the bank your TFN, they do not withold any of that interest. They "trust" you to tell the taxman. If you are resident but have not given the bank your TFN, they are required by the taxman to withold 45% of the interest and pay it too the taxman. It's no big deal 'cos if you forgot to give your bank your TFN and they paid 45% to the ATO you will get it credited when you do your tax return at the end of June and if your due a refund, you'll get it.

 

Finally, if you are an overseas resident and don't have a TFN the bank will withold some tax from you but at a lesser rate. You are expected to declare that income in your country of residence and pay tax on it there. If there is a reciprocal tax agreement in place between the countries I believe you can claim a credit there for the tax witheld here.

[Guest shrek]

so are you saying that everyone has to do a tax return?

[Guest BullcreekBob]

so are you saying that everyone has to do a tax return?

Yes

 

(I had to make the message longer than three characters otherwise it wouldn't get posted)