Irish domiciled ETF taxation as an Australian resident

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Moridin
Posts: 1
Joined: Thu Jul 29, 2021 10:42 pm

Irish domiciled ETF taxation as an Australian resident

Post by Moridin »

I've got a confusing case so I'm looking for advice. Before I moved to Australia (as an Irish tax resident) I had investments in Irish domiciled distributing ETFs e.g. VUSA, IQQA etc.
My understanding is after the purchase in Ireland tax can be declared after 8yrs on the total dividends received.

Also, my broker (degiro) does not automatically deduct tax the tax withheld like it does US stocks. Even worse they provide no statements showing what tax was withheld by the fund

Now that I'm here in Australia I'm not sure how to proceed. I know Australia has a tax treaty with Ireland. So will the Irish 8yrs disposal tax rule suffice? Or do I need to declare every year I'm in Australia?
And if it's the latter how do I figure out what tax was withheld?

Thanks!
TedSwippet
Posts: 5166
Joined: Mon Jun 04, 2007 4:19 pm
Location: UK

Re: Irish domiciled ETF taxation as an Australian resident

Post by TedSwippet »

Welcome.
Moridin wrote: Fri Jul 30, 2021 2:58 am Also, my broker (degiro) does not automatically deduct tax the tax withheld like it does US stocks. Even worse they provide no statements showing what tax was withheld by the fund.
Unlike US domiciled ETFs and US stocks, Ireland domiciled ETFs require no broker withholding. Ireland does not tax dividends paid by Irish domiciled ETFs to non-Irish residents. To the extent that there is any tax withholding, it will have been handled internally by the fund.

With that in mind, many (most?) countries only allow investors a credit for direct tax withholding on dividends; that is, something withheld by the broker. A few allow investors to take credits for fund-level tax. The US is one; I don't know about Australia (not an Australian investor, sorry). If it's not provided to you, if you dig around in an ETF's annual report you should be able to come up with a number that represents your share of the foreign tax paid by that ETF. Just beware that if Australia only allows credits for direct taxes paid, this might not be useful information.

If you haven't already found it, there is some information in the wiki about how these direct/indirect ETF taxes work:

- Nonresident alien taxation - Bogleheads
- Nonresident alien investors and Ireland domiciled ETFs - Bogleheads
Moridin wrote: Fri Jul 30, 2021 2:58 am Now that I'm here in Australia I'm not sure how to proceed. I know Australia has a tax treaty with Ireland. So will the Irish 8yrs disposal tax rule suffice? Or do I need to declare every year I'm in Australia?
That part looks complex, and it may be that nobody here has any clue how to resolve it. I certainly do not, I'm afraid.
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andrew99999
Posts: 1021
Joined: Fri Jul 13, 2018 8:14 pm

Re: Irish domiciled ETF taxation as an Australian resident

Post by andrew99999 »

TedSwippet wrote: Tue Aug 03, 2021 5:54 am
Moridin wrote: Fri Jul 30, 2021 2:58 am Now that I'm here in Australia I'm not sure how to proceed. I know Australia has a tax treaty with Ireland. So will the Irish 8yrs disposal tax rule suffice? Or do I need to declare every year I'm in Australia?
That part looks complex, and it may be that nobody here has any clue how to resolve it. I certainly do not, I'm afraid.
OP will need to find an Australian accountant that has specific experience, not only with expats but experience with Ireland-based investments.

OP can drop me a PM and I can try give a couple that work with expats, but no idea if they will know Ireland investment specific info. Maybe if they don't, they will have some idea of someone they can refer to.
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