Tax On Dividends Australia

Question: in australia, do i need to pay tax for the share dividend?

Answer: This would depend on the type of dividend recieved.

A share dividend can either be:
- Fully Franked
- Partially Franked
- Unfranked

A fully franked share has already had taxed paid on it by the company. A partially franked dividend
has had tax paid on a portion of the dividend. An unfranked dividend has not has not had any tax paid by the company.

In the case of a partially or fully franked dividend, you will recieve a tax credit which represents the tax that the company has already paid.

Either way, I assume you would need to declare your dividends on your tax return but depending on the franking situation, you may or may not be required to pay tax. This could also depend on the difference between your tax bracket and the companies tax bracket.

I think that if you are not quite sure then you should speak with a taxation professional. These matters can sometimes be quite complex, depending on your personal financial circumstances. There may also be other options available to you which could save you money.

Cheers

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