International Withholding Tax (WHT) Adjustments FAQs

When you receive dividends or distributions from international investments, withholding tax may be deducted before the payment reaches your nabtrade account. In some cases, the tax amount may be adjusted after the original payment is made. These FAQs explain why adjustments can occur, how they are processed, and where to get help if you have questions about a specific transaction

Important information

The information on this page is general information only. Any general tax information provided is intended as a guide only and is based on our general understanding of taxation laws. It is not intended to be a substitute for specialised taxation advice or an assessment of your individual liabilities, obligations or claim entitlements that may arise under taxation law. You should consult a registered tax agent if you are unsure how this information applies to your personal circumstances. WealthHub Securities Limited is not a registered tax agent.

1. What is withholding tax on international investments?

Withholding tax is a tax deducted by the country where an investment is listed when income, such as dividends or distributions, is paid to overseas investors.

For example, if you receive a dividend from a US-listed company, US tax may be withheld before the payment is passed on to you.

2. Why does nabtrade apply withholding tax to my dividends?

nabtrade does not set or calculate the withholding tax.

The tax is deducted before the dividend reaches nabtrade — typically by the overseas market, the issuer, or service providers involved in processing the payment. nabtrade then passes through the net payment to your account as received.

3. Why does the withholding tax amount sometimes change after the dividend is paid?

It is common for withholding tax on international dividends and distributions to be revised after the initial payment.

This can occur because issuers may finalise the tax treatment after the dividend or distribution is paid, custodians may receive updated tax calculations or corrections, or tax authorities or issuers may reclassify parts of the payment, such as income or return of capital.

As a result, the original withholding tax applied may be increased, resulting in additional tax payable, or reduced, resulting in a refund to investors.

4. What happens when a withholding tax adjustment is made?

When nabtrade receives an adjustment from the custodian, the adjustment is passed through to your account.

If additional tax is refunded, the amount is credited to your account. If tax is increased, an adjustment may be applied to reflect the corrected tax outcome.

In all cases, nabtrade passes through the adjustment as received and does not independently recalculate the underlying tax position.

5. Why isn’t final tax always applied upfront?

Unlike domestic markets, international markets often operate on a “provisional then final” model. Dividends and distributions may initially be paid based on estimated or provisional withholding tax, with the final tax position confirmed later.

Final tax positions can take weeks or months to be confirmed. Adjustments are then processed once the final position is known. This is part of standard global custody and corporate actions processing and is not specific to nabtrade.

6. When do withholding tax adjustments typically occur?

Timing varies by market, issuer and security type. Adjustments are commonly seen when companies finalise their tax reporting, around tax reporting periods in the relevant country, or following issuer or custodian reclassification activity.

For US income, adjustments are often processed a few months after calendar year end, once final tax information becomes available.

7. How will I see a withholding tax adjustment on my account?

Adjustments will generally appear as a cash transaction, either as a credit or debit, and may be linked to the original corporate action where possible.

You can review your account transaction history for details of the adjustment.

8. How should I interpret withholding tax adjustments for tax purposes?

nabtrade does not provide tax advice. If you are unsure how a withholding tax adjustment impacts your personal tax position, you should consult a registered tax agent or qualified tax adviser.

9. Does nabtrade benefit from withholding tax adjustments?

No. nabtrade does not retain any portion of withholding tax refunds or adjustments. Amounts received from the custodian are passed through to clients.

10. Are withholding tax adjustments an indication of an issue?

Not necessarily. In most cases, withholding tax adjustments reflect normal market and tax processes and are part of the standard lifecycle of international corporate actions.

They are generally not indicative of an error by nabtrade but rather reflect the way global markets handle tax finalisation.

11. Why might withholding tax rates differ from what I expect?

Withholding tax rates may differ from what you expect for several reasons, including the country of incorporation of the security, the listing location, the tax documentation available at the time of payment, or asset-specific tax rules that apply to certain products such as ADRs, ETFs, REITs or dual-listed securities.

In some cases, incorrect or higher rates may later be corrected through follow-up adjustments.

12. What should I do if I have questions about a specific adjustment?

You can review the transaction details in your nabtrade account. If you need help understanding a specific transaction, contact nabtrade support and provide details such as the security code, dividend or distribution date, and the amount received or adjusted.

For tax interpretation or advice, you should consult a registered tax agent or qualified tax adviser.

13. Does withholding tax work differently for foreign ETFs?

Yes. ETFs can have more complex withholding tax outcomes compared to individual shares.

This is because ETFs may invest in multiple countries, distributions can include different types of income such as dividends, interest, capital gains or return of capital, and tax may be applied at more than one level within the ETF and again when the ETF pays distributions to investors.

The tax treatment of ETF distributions may be based on estimated income types at the time of payment and finalised after year end. As a result, the overall withholding tax rate you see may differ from standard treaty rates, and adjustments are more common once the final tax position is confirmed.

As with shares, nabtrade passes through payments and adjustments as received and does not calculate or change the underlying tax treatment.

For ETFs, adjustments are typically made after calendar year end once the issuer finalises the breakdown of distributions paid in the previous calendar year.