Australia has tax treaties with many countries. The manner in...

Australia has tax treaties with many countries. The manner in which Australian sourced income is taxed in other countries depends on their tax law and any treaty that may be in place. It is a very complex area, as it is different for every jurisdiction, and usually a somewhat unusual circumstance, making it difficult to get local tax advice. Sorting it out can often involve going back to the tax legislation and applicable tax treaty. Legislation is usually a proverbial maize of amendments and these need to read together with the treaty. In most countries the tax law also includes quite complex rules pertaining to tax residency status, which again can be affected by tax treaties between countries.

In general the Australian dividend must be declared as income in other countries by tax residents of those countries. I believe some tax treaties provide for at least a partial recognition of Australian franking credits, in which case the gross dividend (nett plus franking credits) is declared as income, and some proportion of the franking credit can be applied to offset the tax due on the dividends (but not the tax on any other income). Where the Aust franking credit is not recognised (most jurisdictions), the dividend is then double taxed with the nett dividend (not including franking credits) having to be declared as income, and taxed at the applicable local rate. Of course there is then also the can of worms that is tax on capital gains.

However, many countries do not tax all foreign earned income. In particular, income derived from foreign investments, superannuation or pensions are often exempt. Some countries exempt all foreign income. When Aust dividends are not locally taxed, the associated franking credits are not recognised (but not needed either). Obviously no foreign jurisdiction will ever refund Australian franking credits.