777 soon to be 787
-ASX/NZX have me listed as a Non Tax resident with China as my Tax residency setting my NRWT at 15% for both.
-I spent several thousand getting take advice when I moved, didn’t cover comparative options thought ✈️
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777 soon to be 787
-ASX/NZX have me listed as a Non Tax resident with China as my Tax residency setting my NRWT at 15% for both.
-I spent several thousand getting take advice when I moved, didn’t cover comparative options thought ✈️
If you want to know if a NZ company pays a supplementary dividend then look it up on the NZX website: for example https://www.nzx.com/instruments/MCY/dividends
If you buy the power companies on the NZX then you will almost certainly do no worse than buying on the ASX and may do better.
My question is, as a resident of China, do you get any tax relief on your dividend income in China from dividend withholding tax paid in Australia and New Zealand?
If you do, then whether you pay your tax relating to these dividends in Australia, NZ or China should not matter. However the way you have phrased your question (separating tax paid out before you get your dividends paid to China as important) would suggest that you get no credit for any tax paid outside China. Is this correct?
I take your word on what you have said above.
Where do the above three bullet points come from? Are these Chinese tax rules? or Australian tax rules? or NZ tax rules? Does the term state mean 'an international country' or are you referring to regional states within China or within Australia or is it all the above?
I presume in the above paragraph when you say 'New Zealand Investor' what you mean is a 'Chinese Investor, making an investment in New Zealand'. I say this because a New Zealand investor, investing in a New Zealand company, that pays dividends in NZ, will never be subject to a 15% withholding tax.
Sorry if I seem pedantic. But when talking in terms of tax policy in technical detail, the precision of language really matters.
I take your word for the above.
For Meridian the information on supplementary dividends is here:
https://www.nzx.com/instruments/MEL/dividends
If you are an NZ Tax resident and trade shares with the aim of making a profit then, yes, you will be subject to income tax on your trading gains. Technically this is not a capital gains tax. As a Chinese taxpayer I have no idea what the rules are as regards capital gains. Please tell us if you know! It seems very odd that you would not be subject to a CGT in Australia, yet you expect that some of your capital profits will be withheld in NZ when you do similar trades in NZ? How would the broker or IRD in New Zealand know how much to withhold? It all seems very unlikely someone in NZ would take tax deductions from you during the share trading process.
No I don't think that is right. The after tax paid dividend is added to by a supplementary dividend (if any) and a 15% NRWT is deducted from that new total before the dividend is paid to you
That doesn't sound quite right either. MEZ has no tax obligations to the ATO. It is an NZ company operating in NZ and pays all its tax to the IRD in New Zealand. If 15% is subtracted off your MEZ dividend before you get it, then this is 'you' paying tax, not MEZ! If MEZ is deducting tax then they are paying it on your behalf as MEZ themselves have no tax obligation in Australia.
MEZ is a New Zealand company operating in New Zealand and BHP is an Australian company operating in Australia. You really expect them to have the same tax treatment?
I suggest you qualify what you mean by 'least tax overall'. You seem to use this phrase interchangeably both referring to 'the tax you have to pay' and 'the tax the company has to pay'. They are not the same thing.
SNOOPY
I hope people don't mind dumb questions - but a rookie couple of questions on dividends as I learn more about the share market
1. I see that there are published ex-dividend dates which are after the dividend announcements - eg FBU is this Friday. So FBU have announced 18c per share dividend. Question: Why don't people go and buy a load of stock before Friday - get the dividend and then sell the shares next week ?
2. I have also read that sometimes a share price will drop after the ex-dividend date, by about the dividend amount ..... does that answer my question above (ie your shares are worth less) - OR is this typically a short term drop in price and the share price tends to recover the drop in price reasonably quickly ? Again using FBU - seems to be a strong company and I assume would recover quickly from a 18c share price dip ....
The published ex-dividend dates are typically hindsight dated so in order for the person trying to game the dividend system, they must also know what date the ex-dividend date will be declared. How does one know what previous date would that be?
If the ex-dividend date is post dated, then the share price (in theory) will reflect the dividends being paid which is a drop in the share price. When profits are paid out from the balance sheet, this drops the book value per share, and thus share price. A recovery in the share price would be determined on the future income of the company. Companies like The Warehouse Group have had a dividend payment policy for decades which reflect why their share price does not have much capital gain. Whereas companies like Warren Buffet's Berkshire Hathaway has never paid a dividend, by the share price has grown immensely over multidecades. This is an understanding I have not quite understood in NZ where you have investors wanting dividend payment, but the income tax laws in NZ do not have capital gains tax. One would certainly be better owning companies that have the tax free capital gain on their share price instead of the dividend (despite having some level of imputation credit).
Thanks for the response SBQ. Doesn't this link provide forward guidance to the ex-dividend dates ? https://www.nzx.com/markets/NZSX/dividends
Interesting your comments on TWG - it is a stock I have been watching (bought a few but chump change) - and wondered why despite all the hype the Share price hasn't moved much over the last 6 months.
As mentioned before, the amount of dividend paid will reflect the change in share price. If buyers were to seek a forward payment date and simply buy the share, the purchase price would be reflected to the amount of dividends to be paid. (ie. will be buying at a higher price). Now this is going by a very basic sense as there are countless of variables that affect the share price.