General information - types of securities, deadlines, other market specifics - Australia
Types of securities eligible in Clearstream Banking
The Clearstream eligible securities issued in Australia are as follows:
Debt securities:
- Australian Treasury bonds, semi-government securities and corporate bonds:
Australian legislation defines Australian Treasury bonds, semi-government securities and corporate bonds as follows:
- Securities that are compliant with Section 128F of the relevant Tax Act (the Public Offer Test)
Clearstream Banking applies 0% withholding tax by default for the above-mentioned securities. No certification or tax instruction is required for non-resident beneficial owners to obtain this exemption.
Important note: Australian residents must provide their Tax File Number (TFN) or Australian Business Number (ABN) to Clearstream Banking in order to be eligible for the 0% rate. Undisclosed Australian residents may, upon request of the customer, be subject to the maximum withholding tax rate (47.0%).
- Securities that are not compliant with Section 128F of the relevant Tax Act (the Public Offer Test)
Clearstream Banking applies 10% non-resident withholding tax by default for non-certified undisclosed holdings. Eligible beneficial owners are, upon submission of the required certification, entitled to exemption at source.
Important note: For Securities not compliant with Section 128F, 47.0% withholding tax must be applied, upon request from the customer, if the underlying final beneficial owner is an undisclosed Australian resident and no ABN/TFN is provided to Clearstream Banking.
- Treasury notes and global bonds (denominated in Australian dollars ("Matildas")):
No withholding tax is applied to interest payments on Australian Commonwealth Treasury Notes or on Global Bonds Denominated in AUD (“Matildas”).
Clearstream Banking applies 0% withholding tax by default for the above-mentioned securities. No certification or tax instruction is required for non-resident beneficial owners to obtain this exemption.
Important note: Australian residents must provide their Tax File Number (TFN) or Australian Business Number (ABN) to Clearstream Banking in order to be eligible for the 0% rate. Undisclosed Australian residents may, upon request of the customer, be subject to the maximum withholding tax rate (47.0%).
Equities and equity-related instruments:
- Equities and equity-related instruments:
Under Australian tax legislation, several types of tax credits can be attached to a dividend payment, according to the franked/unfranked status of all or part of the dividend. Such tax credits can result in a reduction of the actual withholding tax.
- Managed Investment Trusts (MITs):
Unit trusts generally return profits or excess income to unit holders in the form of distributions, which may consist of different components that make up a total distribution payment.
- CHESS-eligible Notes traded in Units:
Chess eligible Notes traded in Units, may distribute various types of components and as such the actual tax treatment depends on the announced distribution.
Legal background
Debt securities:
The Australian Income Tax Assessment Act 1936 defines Australian Commonwealth treasury bonds, semi-government securities and corporate bonds in two categories according to whether they are or are not compliant with Section 128F of the said Tax Act (the Public Offer Test).
Interest income is treated according to the Australian Income Tax Assessment Act 1936, which enforces transparency of the underlying beneficial owner such that Australian custodians can make tax adjustments on interest payments according to the tax status of the final beneficial owner.
The rates applicable to Australian bonds are different according to whether they are or are not compliant with Section 128F.
Beneficial owners may also benefit from exemption according to the International Organisations (Privileges and Immunities) Act 1963.
Equities:
Unfranked dividend components are treated according to the Income Tax Assessment Act 1936, which enforces transparency of the underlying beneficial owner such that Australian custodians can make tax adjustments on dividend and interest payments according to the tax status of the final beneficial owner.
Managed Investment Trusts (MITs):
Managed Investment Trust (MIT) distributions may consist of various components, which are treated according to the following legislation:
- Income Tax Assessment Act 1936 (unfranked dividends and interest components);
This legislation provision enforces transparency of the underlying beneficial owner and Australian custodians can make tax adjustments on dividend and interest payments according to the tax status of the final beneficial owner.
- Taxation Administration Act 1953 - Section 12 (other distribution components such as fund payments).
Section 12 has no provision that enforces transparency of the underlying beneficial owner and Australian custodians cannot make adjustments but are obliged to apply the tax status of the "first tier beneficiary" or account held directly with the Australian custodian (that is, Clearstream Banking Luxembourg) for the various components.
Types of beneficial owner
The types of eligible beneficial owner recognised for tax purposes in Australia vary according to security type, as follows:
- Non-residents of Australia;
- Tax-exempt beneficial owners;
- Residents of a DTT country;
- Residents of an EOI country;
- Residents of Australia.
Statutory deadline for reclaiming withholding tax
The statutory deadline for reclaiming withholding tax is six years after the relevant income event payment date.
In practice and according to Clearstream Banking’s local depository, the Australian Tax Office (ATO) will accept any reclaim for withholding tax up to four years after the relevant income event payment date.
Thereafter, reclaims of up to six years from the date of remittance will be considered for assessment. Consequently, a refund application submitted to the ATO between four and six years after the relevant payment date must be for a substantial amount and/or show good reason as to why it was not submitted earlier. Any reclaim for withholding tax paid more than six years ago will not be considered for assessment by the ATO.
Clearstream deadline for standard refund applications
The deadline by which Clearstream Banking must receive the documentation for a standard refund application is, at the latest, two months prior to the statutory deadline. All standard refund applications received after this deadline will be processed by Clearstream Banking on a "best efforts" basis. However, in such cases, Clearstream Banking will apply an extra charge and accepts no responsibility for forms that have not reached the ATO by the date considered as being the statute of limitations deadline.
When are refunds received?
The estimated time for receiving a standard refund is 45 days from the date on which The Australian Tax Office (ATO) receives the reclaim application, although this can vary depending on when the application is filed and on the complexity of the information supplied on the reclaim form.
Notes on tax reclaims
Customers warrant the completeness and accuracy of the information they supply to Clearstream Banking.
It is the customer's responsibility to determine any entitlement to a refund of tax withheld, to complete the required forms correctly and to calculate the amount due. Clearstream Banking is under no obligation to carry out any investigation in respect of such information.
With respect to tax reclaims in general, customers are reminded that Clearstream Banking accepts no responsibility for their acceptance or non-acceptance by the tax authorities of the respective country.
Exchange of Information (EOI) countries
As at 1 January 2022, the following countries are classified as "exchange of information" (EOI) countries under Regulation 44E of the Taxation Administration Amendment Regulations 2008 (No.2):
Albania, Andorra, Argentina, Armenia1, Austria, Azerbaijan, Bahrain, Barbados, Bermuda, Brazil, Bulgaria, Brunei, Cabo Verde (a), Cameroon, Canada, Chile, China, Colombia, Cook Islands, Costa Rica, Croatia, Curaçao, Cyprus, Czech Republic, Denmark, Dominica, Estonia, Faroe Islands, Fiji, Finland, France, Georgia, Germany, Ghana, Greece, Greenland, Grenada, Guatemala, Hungary, Iceland, India, Indonesia, Ireland, Israel, Italy, Japan, Kazakhstan, Kenya (a),Kiribati, Latvia, Lebanon, Liberia, Liechtenstein, Lithuania, Luxembourg, Marshall Islands, Macao, Malta, Mauritius, Mexico, Moldova, Mongolia (a), Montenegro (a), Montserrat, Nauru, Netherlands, Netherlands Antilles, New Zealand, Nigeria, Niue, Norway, Oman (a), Pakistan, Panama, Papua New Guinea, Peru, Philippines,Poland,Portugal, Qatar, Romania,Russia,Samoa, Saudi Arabia, Senegal, Seychelles, Sint Maarten, Slovakia, Slovenia, South Africa, South Korea, Spain, Sri Lanka, St Lucia, Sweden, Switzerland, Taiwan, Thailand, Tunisia, Turkey, Uganda, Ukraine, United Arab Emirates (UAE), United Kingdom, Uruguay, U.S.A., Vanuatu, Vietnam.
1. Withholding tax rates will be reduced from 30% to 15% for certain fund payments made to a recipient with an address in, or to a place located in, one of these countries.
Fund payment tax rates for recipients in EOI countries
Clearstream Banking provides these rates for information purposes only and does not guarantee that this information is correct, complete and accurate. Clearstream Banking does not assume liability for any damages, direct or indirect, that may arise from the reliance on or the use of this information.
Year of MIT distribution | Rate (%) |
2008/09 | 22.5 |
2009 | 22.5 |
2009/10 | 15 |
2010 | 15 |
2010/11 | 7.5 |
2011 | 7.5 |
2012 (a) | 15 |
a. Effective from 1 July 2012.
Note: For residents of EOI countries, relief at source and reclaim of withholding tax are not available through Clearstream Banking but they may be able to reclaim withheld tax directly via the Australian Tax Office (ATO).
Countries defined as tax havens
Andorra | Guam | Pitcairn |
Anguilla | Guiana | Puerto Rico |
Antigua and Barbuda | Honduras | Qatar |
Antilles, Netherlands | Hong Kong | San Marino |
Aruba | Isle of Man | Santa Lucia |
Ascension | Jamaica | Seychelles |
Bahamas | Jordan | Solomon Islands |
Bahrain | Keslim Islands | St. Christopher and Nevis |
Barbados | Kiribati Island | St. Helena |
Belize | Kuwait | St. Pierre and Miquelon |
Bermuda | Labuan | St. Vincent and Grenadines |
Bolivia | Lebanon | Samoa, American |
Brunei | Liberia | Samoa, Western |
Cayman islands | Liechtenstein | Svalbard Islands |
Christmas Island | Luxembourg (Holdings 1929 only) | Swaziland |
Cocos (Keeling) Islands | Maldives | Tokelau Islands |
Cook Islands | Mariana Islands | Tonga |
Costa Rica | Marshall Islands | Trinidad and Tobago |
Cyprus | Mauritius | Tristan da Cunha |
Djibouti | Monaco | Turks and Caicos |
Dominica | Montserrat | Tuvalu Island |
English Channel Islands (a) | Nauru | United Arab Emirates |
Falkland Islands | Niue Island | Uruguay |
Fiji | Norfolk Island | Vanuatu |
French Polynesia | Oman | Virgin Islands, British |
Gambia | Pacific Islands (Trust Territory of the) | Virgin Islands, United States |
Gibraltar | Palau Islands | Yemen |
Grenada | Panama |
a. Including Jersey, Guernsey, Alderney, Sark, Herm.