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  • Part K: Interest expenses overseas



    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

    End of attention

    Did you have overseas interest as a business expense?


    Go to Part L.


    Read on.

    You need to know

    Include any interest incurred on money borrowed from overseas sources to acquire income-producing assets used in your business, to finance business operations or to meet current business expenses.

    Do not include interest expenses incurred in deriving rental income. Claim these expenses at item 20 on your tax return.

    In general terms, an amount of withholding tax is required to be withheld from interest paid or payable to non-residents and interest derived by a resident through an overseas branch. These amounts must be sent to the Tax Office.

    If you paid or credited any interest or amounts in the nature of interest to a non-resident of Australia or to a resident's overseas branch, you will need to provide additional information. Print SCHEDULE OF ADDITIONAL INFORMATION – ITEM 14 on the top of a separate piece of paper. Show the name and address of each recipient, total amounts paid or credited to each non-resident or overseas branch of a resident and the amount of tax withheld. If no tax was withheld, please state the reason for this. Include your name, address and TFN. Print X in the Yes box at Taxpayer's declaration question 2a on your tax return. Sign and attach your schedule to page 3 of your tax return.

    For more information on the tax treatment of interest and dividends paid to non-residents, phone the Small business infoline on 13 28 66.

    Note: If you include an amount of interest expense which is not allowable as a deduction, such as amounts denied by the thin capitalisation rules, you will need to add back the amount at H Expense reconciliation adjustments in the reconciliation items section on your schedule. For more information see Thin capitalisation.

    Completing this part

    Step 1

    Write your total primary production overseas interest expenses at Interest expenses overseas, Primary production column, item P8 on your schedule. Do not show cents.

    Step 2

    Write your total non-primary production overseas interest expenses at Interest expenses overseas, Non-primary production column, item P8 on your schedule. Do not show cents.

    Step 3

    Add up your primary production and non-primary production overseas interest expenses and write the total amount at R item P8 on your schedule.

    Last modified: 18 Feb 2020QC 27547