Subsection 128B(4) of the Income Tax Assessment Act 1936 (Cth) imposes income tax on Australian dividends that are subject to section 128B. The application of section 128B to a particular corporate distribution will depend, in broad terms, on the nature of the distribution and its source, the manner or capacity in which the recipient derives it and the recipient’s residence and tax status. The relevant legislative provisions are spread across the Income Tax Assessment Acts of 1936 and 1997, Australia’s Double Tax Agreements, the Taxation Administration Act and the Income Tax (Dividends, Interest and Royalties Withholding Tax) Act 1974. They include provisions that define, for Australian income tax purposes, concepts such as ‘dividend’, ‘non – share dividend’, ‘franked dividend’, ‘demerger dividend’, ‘dividend attributable to a permanent establishment’ and dividends that are ‘conduit foreign income’. Certain entities are obliged, by provisions in Subdivision 12 – F in Schedule 1 to the Taxation Administration Act, to withhold income tax payable under subsection 128B(4) from the effected dividends they pay or receive. A taxpayer’s Australian assessable or exempt income does not include Australian dividends upon which subsection 128B(4) withholding tax is payable and so the taxpayer is not obliged to lodge an Australian tax return on account of them.