Foreign Business Income – Tax Refund On Spot

As an Australian resident, you are taxed on your worldwide income. This means you must report all income you get from foreign business activities on your Australian tax return.

Foreign business income

How tax applies to income you get from international transactions may depend on whether the transaction involves a country that has a tax treaty with Australia. Australia has tax treaties with more than 40 countries, including all our major trade and investment partners.

Reporting income from international transactions

If you have assessable income from overseas, you must state it on your Australian tax return. If you have paid foreign tax in another country, you may be entitled to an Australian foreign income tax offset, which provides aid from double taxation.

You must report any foreign employment income you receive that is exempt from Australian tax because we may take it into account to work out the amount of tax you are liable to pay on both your Australian and foreign income.

Before you calculate your income and deductions, you must change all your foreign income, foreign deductions and foreign tax paid into Australian dollars.

For more information on Etax, myTax ATO and online tax return, please contact us at 1300768284 or you can email us at enquiry@taxrefundonspot.com.au

Capital Gains on Overseas Assets

If you are an Australian resident, your capital gains on overseas assets are treated in the same way as your capital gains on Australian goods. If you make a capital gain that is taxable in Australia and you have paid foreign tax on it, you may be entitled to a foreign income tax offset.

If you operate an Australian company, from 1 April 2004 certain capital gains and capital losses you make on the disposal of your shares in foreign companies with underlying active businesses are disregarded or reduced

As an Australian resident, you are generally taxed on any capital gains you make on overseas assets – for example, when you sell an overseas property. You must report the gain in your tax return.

If the gain is payable in Australia and you’ve paid foreign tax on it, you may be entitled to a foreign income tax offset.

Limits to debt deductions for thinly capitalized entities

If you operate a thinly capitalized or highly geared entity – that is, your assets are funded by a high level of debt and relatively little equity – special rules apply that limit your debt deductions if you function either of the following:

  • an Australian entity with overseas investments
  • a foreign entity with investments in Australia.

For more information on Etax, myTax ATO and online tax return, please contact us at 1300768284 or you can email us at enquiry@taxrefundonspot.com.au