Foreign dividends
Australian dividends
Australian shares can be confusing because some are outside the FIF calculation flow, but dividends may still need to be declared as overseas income.
Start with the holding
If the share qualifies for the common ASX-listed Australian share exemption, you generally do not calculate FIF income for that share. That does not automatically make the cash dividend disappear from your NZ tax return.
Check the ASX exemption summary →Franking credits are not the same as cash tax withheld
Australian dividend statements may show franked amounts, unfranked amounts, and franking credits. For NZ purposes, do not assume a franking credit can be used like foreign withholding tax. Keep the statement and check the Inland Revenue position for your return year.
Practical point: Record the cash dividend, any Australian withholding tax actually withheld, and any franking credit information separately. Blending them together makes the NZ review harder.
Why franking credits confuse NZ investors
Australian companies may attach franking credits to dividends because Australian company tax has already been paid. That can be useful for some Australian taxpayers, but it is not the same as foreign withholding tax deducted from your cash payment. NZ investors often see a dividend statement with several lines and assume every tax-related number can be claimed in New Zealand. That is not a safe assumption.
For a NZ resident individual, the practical starting point is usually the cash dividend you received, any Australian withholding tax actually deducted from that cash dividend, and the NZD conversion evidence. Keep the franking credit information, but do not blend it into the foreign tax withheld field in the helper.
Record it separately: If a statement shows a cash dividend, a franked amount, and a franking credit, enter the cash dividend details in the helper and keep the franking details as supporting notes for review.
Worked example
Say an Australian company pays you AUD 700 cash and the statement also shows an AUD 300 franking credit. If there was no Australian withholding tax deducted from your cash payment, do not enter AUD 300 as foreign tax withheld. The cash dividend and the franking credit are different things.
If the AUD to NZD rate is 1.08, the cash dividend converts to NZD 756. The helper can show the Australian dividend summary with NZD 756 gross dividend and NZD 0 foreign tax withheld. The franking credit remains a record item to keep with the statement, not an automatic foreign tax credit input.
If your statement does show Australian withholding tax actually deducted from the cash dividend, enter that withheld amount separately. The key is to follow the cash and the actual withholding, not the label that looks most tax-like.
Trans-Tasman imputation is not the normal retail path
There are special rules for companies that choose to operate in both the Australian and New Zealand imputation systems. That is a narrow company-level setting, not a general rule that lets an individual NZ investor use ordinary Australian franking credits as if they were NZ credits.
If your statement or issuer material refers to imputation in both countries, keep the document and get specific advice. For most ordinary broker statements, the safer workflow is to keep the cash dividend, Australian withholding if any, and franking credit details in separate fields.
What to keep
Dividend statement
Payment date, gross cash dividend, currency, and any withholding tax.
Franking details
Franked and unfranked split, plus franking credits if the statement shows them.
Exemption evidence
Your notes or IRD tool result if you treated the share as FIF-exempt.
NZD conversion
The rate or conversion method used for the overseas income line.
What to do next
- •Check whether the Australian holding is outside the FIF calculation flow before deciding which worksheet to use.
- •Enter only cash tax actually withheld in the helper's foreign tax withheld field.
- •Keep franking credit details with your records, but do not treat them as ordinary foreign withholding without review.
- •If your Australian holdings are large, mixed, or held through a trust or company, get adviser help before filing.