Australia has Double Tax Agreements (DTAs) with 45+ countries, reducing withholding tax on dividends (typically 5–15%), interest (0–10%), and royalties (5–10%). DTAs prevent double taxation through foreign tax credits or exemption methods and include transfer pricing provisions.
Australia Double Tax Agreements – Complete Guide
Last Updated: March 2026
By Aus Business Register
Disclaimer: This guide is for general informational purposes only and does not constitute tax advice. Double Tax Agreement provisions are complex and their application depends on individual circumstances. We recommend engaging a qualified Australian tax adviser for advice specific to your situation.
Australia maintains an extensive network of Double Tax Agreements (DTAs) – also called tax treaties – with 46 jurisdictions. For foreign companies establishing an Australian presence, these agreements can significantly reduce the withholding tax applied to cross-border payments such as dividends, interest, and royalties.
This guide provides a practical overview of Australia’s DTA network, the typical rates that apply, and what foreign-owned companies need to know when structuring payments between Australia and their home country.
What Is a Double Tax Agreement?
A DTA is a bilateral agreement between two countries designed to prevent the same income being taxed twice – once in the country where it is earned and again in the country where the recipient resides.
For foreign companies operating in Australia, DTAs typically:
- Reduce withholding tax rates on dividends, interest, and royalties paid from Australia to the treaty partner country
- Define “permanent establishment” – determining when a foreign company’s Australian activities create a taxable presence
- Allocate taxing rights between the two countries for different types of income
- Provide mechanisms to resolve disputes about tax treatment
Source: ATO – What are tax treaties
Countries with DTAs with Australia
Australia has tax treaties currently in force with the following 46 jurisdictions:
| # | Country | # | Country | # | Country |
|---|---|---|---|---|---|
| 1 | Argentina | 17 | Ireland | 33 | Slovakia |
| 2 | Austria | 18 | Israel | 34 | South Africa |
| 3 | Belgium | 19 | Italy | 35 | Spain |
| 4 | Canada | 20 | Japan | 36 | Sri Lanka |
| 5 | Chile | 21 | Kiribati | 37 | Sweden |
| 6 | China | 22 | Korea (South) | 38 | Switzerland |
| 7 | Czech Republic | 23 | Malaysia | 39 | Taiwan |
| 8 | Denmark | 24 | Malta | 40 | Thailand |
| 9 | Fiji | 25 | Mexico | 41 | Turkey |
| 10 | Finland | 26 | Netherlands | 42 | United Kingdom |
| 11 | France | 27 | New Zealand | 43 | United States |
| 12 | Germany | 28 | Norway | 44 | Vietnam |
| 13 | Greece | 29 | Papua New Guinea | 45 | Iceland |
| 14 | Hungary | 30 | Philippines | 46 | Romania |
| 15 | India | 31 | Poland | ||
| 16 | Indonesia | 32 | Singapore |
Notable absence: Hong Kong – Australia does not have a DTA with Hong Kong SAR. The Australia-China DTA does not extend to Hong Kong. Default withholding rates apply to payments to Hong Kong residents. Australia has only a Tax Information Exchange Agreement (TIEA) with Hong Kong.
Source: Australian Treasury – Income tax treaties
Withholding Tax Rates by Country
The following table shows the withholding tax rates that apply under Australia’s DTAs with the countries most commonly relevant to our clients. “Portfolio” refers to holdings below the substantial holding threshold. “Substantial” refers to holdings at or above the threshold (typically 10% or more of voting power).
| Country | Dividends (Portfolio) | Dividends (Substantial) | Interest | Royalties |
|---|---|---|---|---|
| United States | 15% | 0% (80%+ voting) / 5% (10%+) | 10% | 5% |
| United Kingdom | 15% | 0-5% | 10% | 5% |
| Singapore | 15% | 0% | 10% | 10% |
| China | 15% | 15% | 10% | 10% |
| Japan | 15% | 0-10% | 10% | 5% |
| India | 15% | 15% | 15% | 10-15% |
| Germany | 15% | 5% | 10% | 5% |
| Canada | 15% | 5% | 10% | 10% |
| New Zealand | 15% | 5% | 10% | 5% |
| Indonesia | 15% | 15% | 10% | 10-15% |
| Malaysia | 15% | 0% | 15% | 8% |
| South Korea | 15% | 15% | 15% | 15% |
Without a DTA: Default domestic rates apply – 30% on unfranked dividends and royalties, 10% on interest.
Note: Treaty rates are simplified summaries. The precise application depends on the specific treaty provisions and your entity type. These rates are sourced from the treaty texts published on the Australian Treasury website. Consult a tax adviser for the rate applicable to your specific structure.
Countries Without DTAs
If your company is based in a country that does not have a DTA with Australia, the default withholding tax rates apply:
| Payment Type | Default Rate |
|---|---|
| Unfranked dividends | 30% |
| Interest | 10% |
| Royalties | 30% |
| Franked dividends | Nil (exempt) |
Notable countries and territories without a DTA with Australia include: Hong Kong, United Arab Emirates, Brazil, Saudi Arabia, Nigeria, and most Caribbean and Pacific Island nations.
For companies from these jurisdictions, structuring profit repatriation through fully franked dividends becomes particularly important, as it is the only method that avoids the 30% withholding tax on dividends.
Interaction with Franking Credits
One of the most important aspects of Australia’s DTA framework for foreign companies is how it interacts with the franking (imputation) credit system:
- Fully franked dividends are exempt from withholding tax regardless of whether a DTA exists. This is under domestic law, not the DTA itself.
- DTAs reduce withholding on the unfranked portion of dividends (and on royalties and interest)
- Non-resident shareholders cannot claim refunds of franking credits – the benefit is the WHT exemption
This means that even companies from countries without a DTA can avoid withholding tax by ensuring profits are distributed as fully franked dividends.
See our Profit Repatriation Guide for a detailed explanation of the franking credit system.
Permanent Establishment Under DTAs
DTAs define when a foreign company’s activities in Australia create a permanent establishment (PE). If a PE exists, the business profits attributable to that PE are taxable in Australia.
Under most of Australia’s DTAs (based on the OECD Model Tax Convention), a PE includes:
- A fixed place of business through which the business is carried on (office, branch, factory, workshop)
- A construction or installation project lasting more than 12 months (or 6 months in some treaties)
- A dependent agent who has and habitually exercises authority to conclude contracts
Activities that do NOT create a PE (preparatory or auxiliary exclusions):
- Maintaining a stock of goods solely for storage, display, or delivery
- Purchasing goods or collecting information for the enterprise
- Activities of a preparatory or auxiliary character (e.g., market research, liaison)
This PE definition is particularly relevant for companies considering a representative office in Australia, which is specifically designed to stay below the PE threshold.
Source: ATO – Permanent establishments
How to Claim DTA Benefits
DTA benefits are not applied automatically. The payer (your Australian company) applies the reduced rate when making the payment, provided:
- The recipient is a tax resident of the treaty partner country
- The recipient is the beneficial owner of the income (not merely a conduit)
- The payer has evidence of the recipient’s residency status (typically a certificate of tax residency from the foreign tax authority)
If the domestic rate has already been applied (i.e., too much tax was withheld), the non-resident can apply to the ATO for a refund of the excess.
Country-Specific Guides
Aus Business Register has published detailed guides for companies expanding from specific countries to Australia. These cover DTA implications, FIRB thresholds, and practical setup considerations:
How Aus Business Register Can Help
The structure you choose when entering Australia – subsidiary, branch, or representative office – directly affects how DTA provisions apply to your cross-border payments. Making the right structural choice upfront can result in meaningful tax savings over the life of your Australian operations.
Aus Business Register assists with:
- Company formation – establishing your Australian entity with cross-border tax efficiency in mind
- Branch registration – for companies where a branch structure may be more tax-efficient than a subsidiary
- Tax adviser referrals – connecting you with specialists in international tax structuring and DTA application
Request a quote to discuss your Australian company setup, or call us on +61 2 8599 9890.
Frequently Asked Questions
Does Australia have a DTA with Hong Kong?
No. Australia has only a Tax Information Exchange Agreement (TIEA) with Hong Kong, not a DTA. Default withholding rates apply (30% on unfranked dividends and royalties, 10% on interest). The Australia-China DTA does not extend to Hong Kong SAR.
How many DTAs does Australia have?
Australia currently has tax treaties in force with 46 jurisdictions. The full list is published by the Australian Treasury at treasury.gov.au.
Do DTAs eliminate withholding tax completely?
In some cases, yes. For example, the US-Australia DTA reduces dividend withholding to 0% for US companies holding 80% or more of the voting power in an Australian company. Similarly, the Singapore and Malaysia DTAs provide 0% on dividends from substantial holdings. However, most DTAs reduce rather than eliminate withholding tax.
Do franked dividends still avoid withholding tax if there is no DTA?
Yes. Fully franked dividends are exempt from withholding tax under Australian domestic law, regardless of whether a DTA exists. This exemption applies to all non-resident shareholders.
Can the DTA rate be applied automatically?
The reduced DTA rate is applied by the payer at the time of payment, provided the payer has evidence that the recipient is a tax resident of the treaty partner country and is the beneficial owner of the income. If the full domestic rate was incorrectly applied, a refund can be sought from the ATO.
This guide was prepared in March 2026 based on treaty texts and information published by the Australian Treasury and ATO. Treaty provisions are complex – always consult a tax adviser for the specific rates applicable to your structure and circumstances.