Interest withholding tax

Where an Australian tax resident borrower pays interest to a lender that is not tax resident in Australia, the borrower is required to deduct and pay to the Australian tax authority, interest withholding tax at the rate of 10%. However exceptions to this rule apply where:

• • the interest is derived by a non-resident of Australia in carrying on a business in Australia at or through a permanent establishment (ie an Australian branch); or
• • a withholding tax exemption or rate reduction applies.

This guidance note considers Australian interest withholding tax and the “public offer” exemption. It also examines loan note subscription structures (for syndicated loans of less than $100 million).

See Interest withholding tax.