Tax Credits on Dividends ANZ and Westpac on NZX

[Snoopy]

Does a New Zealand shareholder get tax/franking credits for ANZ and Westpac listed on the NZX?

On Westpac -yes- at least for the last couple of dividends. On ANZ, no.

(discl: hold ANZ and WBC)

Also, does a NZ shareholder get any franking credits on any ASX stocks at all?

No. An NZ domiciled taxpayer cannot utilize Aussie franking credits.

Likewise an Oz resident cannot utilize NZ imputation credits.

SNOOPY

[ENP]

On Westpac -yes- at least for the last couple of dividends. On ANZ, no.

Where do I find more information on this thanks Snoopy?

[Snoopy]

Where do I find more information on this thanks Snoopy?

I was going to point to the the relevant page in the Westpac annual report ENP. However, I can find no mention of NZ imputation credits in there!

I have held WBC on the NZ register for some time. I was (pleasantly) surprised when those NZ imputation credits came through in the dividend statements of July last year. I don't recall any explanation over why WBC suddenly decided to start paying them. They are highly profitable in NZ so they certainly would have always had the capacity to pay imputation credits in NZ if the will was there. I should note that the dividend was not fully imputed on this side of the Tasman. My dividend payment details in cents per share, are as follows:

Date, Dividend (cps), Franking Credit (cps), $NZ1= $A?, Imputation Credit (cps)

02/07/2012, 82, 35.1, 0.7833, 6.3
10/12/2012, 84, 36.0, 0.7979, 6.3

6.3c (Australian, I made the conversion) does not compare well with 35.1c and 36c. Still it is better than nothing, which is what we get from most other Australian companies that operate in NZ!

SNOOPY

[Bixbite]

No. An NZ domiciled taxpayer cannot utilize Aussie franking credits.

Likewise an Oz resident cannot utilize NZ imputation credits.

SNOOPY

It seems not 100% right, Snoopy. You forgot a term - "Double tax agreements" (DTAs or DTA).


Please note - I have no accounting knowledge.

Bixbite

[Corporate]

It seems not 100% right, Snoopy. You forgot a term - "Double tax agreements" (DTAs or DTA).


Please note - I have no accounting knowledge.

Bixbite

The DTA doesn't mean squat unfortunately for franking credits on Australian dividends received by a NZ tax resident.

[Snoopy]

It seems not 100% right, Snoopy. You forgot a term - "Double tax agreements" (DTAs or DTA).

The double tax agreement exists between Australia and NZ as you say Bixbite. It applies to withholding tax. I have an Australian bank account and can claim the tax deductions made in Australia from interest earned against my tax bill in New Zealand. Unfortunately the DTA agreement does not apply to Australian franking credits (from an NZ tax perspective) or to NZ imputation credits (from an Australian Tax perspective). The respective finance ministers have talked about recognizing tax payed by companies in Australia in NZ (and vica versa) in both countries. But so far there is no agreement on this point.

SNOOPY