ResMed Inc has updated the foreign exchange rate for its upcoming dividend payment to Australian CDI holders, impacting the Australian dollar amount payable per share. The dividend remains unfranked and subject to US withholding tax, with a reduced rate available under the US-Australia tax treaty.
- Dividend of USD 0.06 per share declared for ASX CDI holders
- Updated FX rate set at 0.7092 USD per AUD for dividend conversion
- Dividend payable in AUD at 0.0846 per CDI on 19 March 2026
- Default US withholding tax of 30%, reducible to 15% with tax form submission
- Dividend is unfranked and relates to the quarter ending 31 December 2025
Dividend Update and FX Rate Revision
ResMed Inc, a global leader in medical devices, has issued an update to its previously announced dividend details for holders of its Chess Depositary Instruments (CDIs) trading on the Australian Securities Exchange (ASX). The company has revised the foreign exchange rate used to convert the dividend from US dollars to Australian dollars, a move that directly affects the amount Australian investors will receive.
The updated exchange rate is 0.7092 US dollars for every Australian dollar, which translates to a dividend payment of 0.0846 Australian dollars per CDI. This adjustment reflects currency market movements since the initial announcement and ensures the dividend payment accurately represents the underlying US dollar amount declared by ResMed.
Dividend Details and Payment Schedule
The dividend declared is an ordinary dividend of USD 0.06 per share, relating to the quarter ending 31 December 2025. Given the 10, 1 ratio between ResMed’s CDIs on the ASX and its common shares listed on the New York Stock Exchange, Australian investors receive dividends based on this conversion factor. The record date for entitlement was 12 February 2026, with the payment scheduled for 19 March 2026.
Importantly, the dividend is unfranked, meaning it does not carry any Australian franking credits. This is typical for foreign entities paying dividends to Australian investors and has implications for the tax treatment of the income received.
Tax Withholding and Investor Considerations
US withholding tax applies to dividends paid to Australian residents at a default rate of 30%. However, under the existing tax treaty between the United States and Australia, this rate can be halved to 15% if investors submit the appropriate documentation, such as Form W-8BEN or W-8BEN-E, to ResMed’s Australian share registry, Computershare Investor Services Pty Limited. This procedural step is crucial for investors seeking to optimise their after-tax returns.
The update serves as a reminder for Australian CDI holders to review their tax documentation status ahead of the payment date to benefit from the reduced withholding tax rate. Failure to submit the necessary forms will result in the higher default withholding tax being applied.
Market and Investor Implications
While the dividend amount in US dollars remains unchanged, the adjustment in the exchange rate highlights the sensitivity of foreign dividend payments to currency fluctuations. Investors should be mindful that the Australian dollar amount received may vary with exchange rate movements up to the payment date. This update also underscores the importance of currency risk management for holders of foreign securities listed on the ASX.
Overall, ResMed’s dividend update is a routine but important communication that ensures transparency and accuracy in dividend payments to its Australian investor base. It also reinforces the need for investors to stay informed about tax treaty benefits and administrative requirements to maximise their income from foreign investments.
Bottom Line?
As currency markets shift, Australian investors in ResMed’s CDIs must stay alert to tax form requirements and FX impacts ahead of dividend payment.
Questions in the middle?
- Will currency fluctuations continue to affect future dividend payments for ASX CDI holders?
- How many Australian investors have submitted the necessary tax forms to benefit from the reduced withholding tax?
- Could ResMed consider a securities plan or franked dividends to enhance appeal to Australian investors?