Foreign Income Tax Offset Rules
If you have foreign income, you must have to disclose it in your Australian income tax return.
If you have assessable income from overseas and also paid tax there, you may be eligible to get tax offsets. It means that you don’t need to pay double taxation.
These rules apply for income years that start on or after 1 July 2008. Different rules apply for income periods up to 30 June 2008 by ATO.
You can claim a tax offset for the foreign tax you have paid on income, profits or gains (including gains of a capital nature) that are included in your Australian assessable income. In some circumstances, the offset is subject to a limit.
You will get tax offsets if you:
- You must have actually paid, or be deemed to have paid, an amount of foreign income tax
- You need to disclose income or gain on which you deemed to paid overseas income tax must be considered as assessable income for ATO.
There is a difference between foreign tax and Australian tax system. You might need to paying overseas income tax for different from which you gain or loss in your income for Australian income tax.
You might have paid the foreign tax in an earlier or later income year. However, the offset can be applied after the foreign tax is paid. so, you might get tax credit and relief for double taxation system.
For more information on online tax return 2020, Tax Return 2020, myGov 2020, myTax 2020 or any other tax related matter, please call our professional accountant on 1300 768 284 or you can email us at enquiry@taxrefundonspot.com.au
