Australian tax terms

  • Australian Taxation Office (ATO)—revenue service of Australia (similar to Inland Revenue (IR) in New Zealand).

  • Capital gains tax (CGT)—tax you pay on profits from selling assets (e.g. shares).

  • Franking credits—similar to imputation credits in New Zealand. They’re used to reduce (or eliminate) double tax being paid on a dividend.

  • Overseas withholding tax—tax that’s paid to the ATO on Australian dividends received.

NZ tax terms

  • Crystallisation—an event where an amount of tax solidifies and becomes set in stone when you sell units, and at the end of the tax year.

  • Dividend imputation credits—a way that companies can pass on credits for tax paid on profits to shareholders when it pays them dividends. Imputation credits offset the amount of tax you’d otherwise be liable to pay on dividends—so tax isn't paid more than once.

  • Excluded dividend—part of the dividend paid that does not get taxed.

  • Gross portfolio investment entity (PIE) tax—the total amount of tax you need to pay on your PIE investments.

  • Income tax rate—the percentage of tax you pay on your income each year. This rate is determined by your total income for the year.

  • Prescribed investor rate (PIR)—the rate you’re taxed at for managed funds (at either 10.5%, 17.5%, or 28%).

  • Resident withholding tax (RWT)—the 33% tax rate applied when investing in companies in Sharesies. It’s reduced by any tax already paid (like imputation credits).

  • Taxable income—the income that you pay tax on.

  • Tax credits—a reduction in the amount of tax you need to pay.

  • Total gross dividends—the sum of all dividends received.

US tax terms

  • Foreign investment fund (FIF)—if you own overseas shares (including investments outside of Sharesies, but not including Australian-listed companies) that cost more than $50,000 NZD in total, you'll come under FIF tax rules and should consult a professional tax advisor to help you with your tax.

  • Internal Revenue Service (IRS)—revenue service of the United States of America (similar to Inland Revenue (IR) in New Zealand).

  • Tax residency—tax residency is different from your immigration status. You can be a tax resident of more than one country. Read more about tax residency.

  • Tax treaty—some countries have an agreement or treaty with the US. If you’re a citizen of a country with a tax treaty, you can pay less tax on your US shares.

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