Collection of Tax File Numbers (TFNs) is authorised, and its use and disclosure is regulated by the tax laws and Privacy Act.
Investors are not required to provide their TFN and declining to do so is not an offence. However, TFN withholding tax (WHT) will be deducted where the investor does not provide any one of the following:
TFN WHT will be deducted (at the highest marginal tax rate plus the Medicare Levy) from any income earned on their account (eg interest, dividends and distributions) at the time payment is made.
The amount of TFN WHT will be disclosed on the Tax Reports.
For further information, please contact the Australian Taxation Office.
If your client has a joint account, it is not sufficient for only one TFN to be quoted to avoid the deduction of WHT.
For example, if a husband and wife hold an investment jointly, neither will be regarded as having quoted a TFN in relation to the investment unless both have quoted a TFN, ABN or an exemption reason.
As a result, where only one account holder has quoted their TFN, TFN WHT will be required to be deducted on the whole income amount.
If a non-resident holds a joint account with an Australian resident, the resident must quote their TFN, ABN or claim an exemption reason in order to avoid TFN WHT being deducted. Other non-resident WHTs will be deducted as appropriate. In these circumstances, the resident may be entitled to a credit for these amounts.
Taxpayers who are subject to non-resident WHT should advise of their non-resident status and provide their overseas address. Where no overseas address is provided for the non-resident account holder, a higher rate of tax may be withheld from the whole income amount.
For more information see Withholding tax for non-residents and 12H.
Chat in real-time with an adviser consultant Monday to Friday, 8am to 7pm Sydney time (excluding public holidays).
Everyone at Macquarie is commited to providing our clients with the highest standard of products and services available. If you have feedback we would like you to tell us about it.
