Here's the breakdown
How will I be impacted?
This is a requirement of ATO that, for any settlements over the value of 2 million dollars, the sellers are required to deduct 10% of the purchase price and, pay the same to ATO immediately.
Is there a way to avoid 10% payment?
Yes there is, Obtaining a Tax clearance certificate is the way to go. Any Australian resident and/or resident entities are eligible to apply for tax clearance certificate. Once, the same is applied for and obtained, it can then be presented to the vendor prior to settlement.
What about a non Australian resident?
An application to the ATO may be lodged by foreign residents asking for a variation of the 10% non-final witholding tax. Once, the ATO approves the variation request, the same can then be handed over to the purchaser prior to the settlement takes place. The sum paid to ATO will be considered as credit against any tax liability assessed in that financial year's tax return application.
I want to apply for tax clearance certificate, how can I do that?
All you have to do for that is give us a quick call and we will be glad to offer you further assistance. It may be a complex task to undertake by yourself so why not, leave it on to us as professionals and you can enjoy the breeze in the meantime.