Franking Credits for Non-Residents
Non-residents can't get franking credit refunds. Here's how dividends are taxed when you live abroad — and what you actually receive.
Key change: As a non-resident, you cannot receive refunds of excess franking credits. Fully franked dividends carry no further tax. Unfranked and partially franked dividends attract withholding tax (usually 30%, or DTA rate).
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How Franking Works for Non-Residents
| Dividend Type | Resident Treatment | Non-Resident Treatment |
|---|---|---|
| Fully franked | Gross up + franking credit. Tax offset. Refund if credits exceed tax. | No withholding tax. Franking satisfies AU tax. No refund of excess credits. |
| Partially franked | Partial credit applied. Balance taxed at marginal rate. | Unfranked portion: WHT at 30% (or DTA rate). Franked portion: no WHT. |
| Unfranked | Taxed at marginal rate. | WHT at 30% (or DTA reduced rate, typically 15%). |
DTA rates: Australia's DTAs with most major countries reduce dividend WHT to 15% on unfranked dividends (UK, US, NZ, Singapore, Japan, Germany, etc.). To claim the reduced rate, provide your share registry with a declaration of foreign residency.