You’re responsible for any tax obligations to the Australian Taxation Office (ATO). While it’s not compulsory to supply us with your tax file number (TFN), if you haven’t supplied us with a valid TFN we’re required to withhold tax at the highest rate (45%) and Medicare levy (2%) from the unfranked portion of your dividend. This will be paid to the Australian Taxation Office (ATO) on your behalf.
Your tax obligations vary between different investments.
Tax on Australian investments
Some dividends have franking credits attached to them. Franking credits are used to reduce (or eliminate) double tax being paid on a dividend. Sharesies will provide details of the franking credits you're entitled to in your end of year tax summary.
Attribution managed investment trusts (AMITs)
Some Australian exchange-traded funds (ETFs) are considered to be AMITs for tax purposes. If you receive a dividend from an AMIT investment during the financial year, we’ll provide a full tax breakdown (an AMMA statement) in your Sharesies tax statement.
AMIT investments release their reporting from the end of financial year to the end of September. This information is required for AMMA statements—meaning that if you've invested in an AMIT, you’ll receive both your tax statement and AMMA statement in September.
We send these statements as soon as we receive all the required information, so for some it might be sooner.
Tax on New Zealand investments
Income from companies and exchange-traded funds (ETFs) may incur non-resident withholding tax (NRWT).
Some countries have tax treaties to avoid taxing you twice on the same investment.
As an Australian tax resident, you can claim the tax treaty with NZ for your NZ dividends. We’ll deduct NRWT at a rate of 15% when you receive dividends from companies and ETFs. This is paid to Inland Revenue (IRD) in New Zealand directly. The amount you receive will always have NRWT already deducted.
Tax on US investments
Before you start investing in US shares, you need to fill out a digital W-8BEN or W-9 tax form to ensure your US tax details are correct.
You’ll be asked to re-sign this form every three years to keep your details up-to-date. If your form expires and you don’t fill out a new one, any income you receive from your US investments through the Sharesies platform will be taxed at the highest rate (30%) until you re-confirm your US tax details.
If you have an Australian address: If you live in Australia and have an Australian address, 15% of your dividend is deducted as tax to pay to the IRS, regardless of whether you’ve provided us with a TFN number.
If you’re a US tax resident: we’ll deduct 0% of tax received from dividends in Sharesies. You’re responsible for your tax obligations to the Internal Revenue Service (IRS).
If you don’t have an Australian address: we’ll deduct 30% of tax from any dividends received. This is paid to the IRS.
Foreign companies listed in the US
If you receive US dividends from a non-US company, tax may be deducted at the appropriate rate of the country where the company is based.
For example, tax on a dividend from a Canadian company listed on a US exchange may be deducted at the appropriate Canadian tax rate. Tax will be deducted before we pay the dividend into your Sharesies Wallet.
Different tax treatments may apply when investing in companies that are American depositary receipts (ADRs). Read about tax on ADRs.
Capital gains tax (CGT)
For Australian investors, CGT may apply to transactions in investments in Australian, New Zealand, and US companies and funds.
If you’re unsure if CGT applies to you, we recommend reaching out to a professional tax advisor for guidance.