ATO launches campaign to target tax withholding on overseas royalties

The ATO’s International Risk for Private Groups Program has launched a campaign focusing on non-resident withholding tax relating to royalty expenses paid overseas for the 2019 and 2020 income years.

Taxpayers who have paid royalties to a non-resident must meet certain obligations, including lodging a PAYG withholding from interest, dividend and royalty payments paid to non-residents – annual report (PAYG annual report).

This also includes paying withholding tax to the ATO, unless a withholding exemption or tax treaty relief applies.

“As part of our campaign to encourage compliance with withholding tax obligations, we will contact identified taxpayers by mail and then with a follow-up phone call,” the ATO said.

“We will also deliver targeted education to help taxpayers meet their obligations to withhold and remit tax, claim deductions for overseas royalty expenses and lodge the PAYG annual report.”

Tony Zhang

25 February 2022

accountantsdaily.com.au