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  1. #11
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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 ✈️

  2. #12
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    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.
    om mani peme hum

  3. #13
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    Quote Originally Posted by NADZAB View Post
    SNOOPY,

    Thanks for taking time to reply.
    The question isn’t relating to my own tax obligations really more what tax is being taken out before I get a to see a dollar ��
    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?

    Quote Originally Posted by NADZAB View Post
    -Chinese tax residents are accessed on their worldwide income and there is a dual tax agreement with NZ & AUZ. The updated NZ China dual tax agreement was drafted 2 months ago and is yet to be in force.

    Effectively (NZ & China) (AUZ & China) have the same arrangement as (NZ & AUZ)
    There is a host of other rabbit holes relating to China Tax liabilities which are greatly beneficial (Possibly why they are buying so many NZ assets)
    I take your word on what you have said above.

    Quote Originally Posted by NADZAB View Post
    1) Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State may be taxed in that other State.
    2) However, such dividends may also be taxed in the Contracting State of which the company paying the dividends is a resident and according to the laws of that State, but if the beneficial owner of the dividends is a resident of the other Contracting State, the tax so charged shall not exceed
    3) 15 percent of the gross amount of the dividends in all other cases
    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?

    Quote Originally Posted by NADZAB View Post
    -Australia unlike New Zealand, which exempts only imputed non-cash dividends from NRWT (and has a separate FITC regime for imputed cash dividends), Australia exempts fully imputed (franked) dividends from non-resident withholding tax. This means a New Zealand investor receiving a dividend which has full imputation credits attached will not be subject to the 15% withholding tax (as provided in the double tax agreement).
    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.

    Quote Originally Posted by NADZAB View Post
    pay

    In addition, certain foreign-sourced dividends paid by an Australian company to a non-resident shareholder are also exempt from Australian withholding tax.
    I take your word for the above.

    Quote Originally Posted by NADZAB View Post
    I have a sound knowledge of the Tax requirements of buying shares as a Non Tax Resident off the ASX & NZX respectively.
    Where it is going fuzzy is buying shares on the ASX of NZ dual listed company company (MEZ)

    1) If I buy shares in BHP which are fully franked on the ASX as a non tax resident there is no Liability for NRWT as franking credit 30% offsets NRWT 15%
    2) If I buy MEL shares on NZX carrying imputation credit (28%) this does not offset NRWT 15%, however supplementary dividend payment can (How do you know if company does this?)
    For Meridian the information on supplementary dividends is here:

    https://www.nzx.com/instruments/MEL/dividends

    Quote Originally Posted by NADZAB View Post
    3) There is no CGT tax as as Non Tax resident in AUZ, in NZ there most likely will be with my trading frequency.
    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.

    Quote Originally Posted by NADZAB View Post
    4) The dividend payment for MEZ on the ASX shows dividend 100% unfranked with 15% NRWT applied.

    5) So my interpretation as a non resident of AUZ & NZ is:

    -MEL on NZX makes a profit of $550 million NZD pays 28% tax on the profit to IRD then distributes the dividend to me subtracting an additional 15% NRWT to pay IRD
    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


    Quote Originally Posted by NADZAB View Post
    -MEZ on ASX makes a profit of $550 million NZD pays 28% tax on the profit to IRD then subtracts (15% NRWT given to IRD then offset by supplementary dividend, cost neutral process) then converts to AUD and subtracts 15% NRWT and pays ATO
    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.

    Quote Originally Posted by NADZAB View Post
    -BHP on ASX makes a profit of $550 million AUD pays 30% tax on the profit to ATO then pays me dividend

    They reason for the questions is probably obvious but I am trying to see which method has the least tax overall the reason for complicating it with NZ dual listed companies is I really like the NZ power companies.
    I would have thought there might be a way of MEZ getting the same overall tax treatment as BHP?
    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
    Last edited by Snoopy; 07-07-2019 at 09:01 AM.
    Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7

  4. #14
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    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 ....

  5. #15
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    Quote Originally Posted by STr View Post
    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).

  6. #16
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    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.

  7. #17
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    Quote Originally Posted by STr View Post
    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.

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