HandiTax does not include withholding tax in the Income Tax Return tax estimate because withholding tax is part of PAYG withholding, not income tax.
Including it in an estimate would require multiple assumptions, such as the country of residence when the interest or dividend was paid or accrued, whether the payer withheld and remitted tax to the ATO, and whether the taxpayer was a resident for only part of the year and when the income was earned.
The ATO notice of assessment provides an itemised summary of the tax owed on taxable income, taking into account any tax offsets and credits for tax already paid during the income year.
Under section 128D of the Income Tax Assessment Act 1936, income subject to withholding tax is not included in assessable income and is therefore excluded from income tax assessment.
Australian residents who pay interest, dividends or royalties to foreign residents are generally required to withhold tax. The payer, as the party controlling the payment, is responsible for withholding and remitting the tax directly to the ATO.
For more information, see the relevant ATO website content and publications.
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