How to vary pay as you go (PAYG) instalments

Foreign income tax offsets

If you receive foreign income that is taxable in Australia and you have paid foreign income tax on that income, you may be entitled to a foreign income offset (formerly known as a foreign tax credit).

A foreign income tax offset may be allowed for foreign income tax that is either:

• levied on the taxpayer's income, profits or gains that are of an income or capital gains nature
• imposed in place of a tax on the net amount of income (similar to Australian withholding tax).

For more information refer to Guide to foreign income tax offset rules.

You will not be able to work out your foreign income tax offset if you estimate either: a capital gain exempt foreign employment income. If you expect to receive either of these, phone us for more information - see More information.

Sections within Estimating the tax on your business and investment income

• Income
• Allowable deductions
• Tax on estimated taxable income
• Tax offsets (other than refundable tax offsets)
• Foreign income tax offsets
• Net tax payable
• Medicare levy
• Net tax payable after applying Medicare levy and foreign tax credits
• Compulsory HELP repayment
• Compulsory Financial Supplement repayment
• Refundable tax offset
• Estimated tax credits
• Tax on business and investment income