Dividends in Your Tax Return: What You Must Declare

Dividends are payments from company profits — cash, bonus shares, or other property. If you earn dividends from Australian or overseas companies, you must declare them in your tax return. This includes franking credits for Aussie shares and foreign income offsets for overseas shares. GoTax makes it easy to declare dividends correctly and claim every offset.

What Are Dividends?

Dividends are your slice of company profits. They can come as:

• Cash – paid into your bank account

• Bonus shares – extra shares instead of cash

• Other property – rare, but possible

If you receive dividends — local or overseas — you must declare them in your tax return.

What About Franking Credits?

Some Australian companies pay franked dividends. That means tax was already paid before the dividend reached you.

You must declare:

• The dividend amount (franked + unfranked)

• The franking credit (the tax already paid by the company)

The franking credit gives you a tax offset so you’re not taxed twice.

How Do You Declare Dividends?

Australian Shares

• Declare the dividend (franked + unfranked)

• Declare the franking credit

Overseas Shares

• Convert to AUD using the exchange rate on the payment date

• Declare as foreign income

• Claim a foreign income tax offset if tax was withheld overseas

Bonus Shares

• If classed as a dividend, declare them at market value

What Records Should You Keep?

• Dividend statements from each company or share registry

• Details of franking credits

• Records of foreign tax paid

Keep them for five years in case the ATO reviews your return.

FAQ – Real Questions, Real Fast

Q: I got a dividend statement with a franking credit. What do I do?
A: Declare both the dividend and the franking credit in your tax return. The franking credit acts as a tax offset so you’re not taxed twice.

Q: I reinvested my dividends. Do I still declare them?
A: Yes. Reinvested dividends must still be declared as income in your tax return.

Q: I’ve got shares in a US company. How do I declare them?
A: Convert the dividends to Australian dollars and declare them as foreign income. If US tax was withheld, you may claim a foreign income tax offset.

Q: I received bonus shares. Do I declare them?
A: Yes. Bonus shares are taxable if classed as dividends and must be declared at market value.

Q: I didn’t get a dividend statement. Do I still declare it?
A: Yes. All dividends are taxable income, even without a statement. You must declare them and request the missing statement from the issuer.

Q: What happens if I don’t declare dividends?
A: The ATO cross-checks dividend data with share registries. Undeclared dividends can trigger corrections, penalties, or audits.

Q: Can I offset foreign tax against my Australian tax?
A: Yes. If you paid foreign tax on overseas dividends, you may be eligible for a foreign income tax offset to reduce double taxation.

Q: Are dividends from managed funds treated the same way?
A: Yes. Managed funds report dividends and franking credits to the ATO, and you must declare them in your return.

Q: Can I ignore small dividend amounts?
A: No. All dividends, regardless of amount, are taxable and must be declared.

Q: When is the best time to finalise my return if I have dividends?
A: Wait until mid-July or later. Dividend data often reaches the ATO systems late, and finalising early may lead to missed income and amendments.

Final Thoughts

Dividends — franked, unfranked, reinvested, or foreign — all need to be declared. The ATO already knows what you earned, so your return must match their records.

Pro tip: Hold off until dividend data has fully flowed through before finalising your return to avoid amendments later.

What next?

GoTax makes declaring dividends simple. We’ll guide you through Australian and overseas dividends, franking credits, and offsets — ensuring nothing gets missed.

Start your return today: https://www.gotax.com.au/guest-user

Fast. Friendly. Fully guided.

Try the Gotax online Tax Library now