If you are a non-resident or an Australian resident living overseas we are required by law to deduct non-resident withholding tax at the applicable rate from all future interest payments made to your savings and investment accounts. This money is paid to the Australian Tax Office.
A non-resident is essentially a non-resident of Australia for Australian tax purposes who does not meet the Australian tax residency tests.
We identify non-residents by first checking whether a member or customer has an overseas address. An overseas address is often a sign that a member is non-resident.
When a non-resident member seeks to quote their TFN (Tax File Number) to us, we will still deduct non-resident withholding tax for the interest paid. This is because the withholding requirement is contingent on the overseas address and not the presence of the TFN.
Currently the amount of non-resident withholding tax we must withhold from a payment of interest we make to a non-resident member/customer is equal to 10% of the amount of the interest payment.