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  • Calculating non-resident foreign income for HELP and TSL debtors

    These instructions will help you complete a non-resident foreign income schedule for non-residents with a Higher Education Loan Program (HELP) or Trade Support Loan (TSL) debt. It will help you calculate their non-resident foreign income and explain the methods for determining their income. It will show you how to work out deductions for expenses incurred when using the ‘comprehensive tax based’ method.

    Who should use this guide?

    Tax agents can use this guide to determine the most suitable method to calculate non-resident foreign income for their clients, the information required, and to determine allowable deductions when using the ‘comprehensive tax based’ method.

    Digital service providers can use this guide to help develop software packages that allow tax agents to report non-resident foreign income for HELP and TSL debtors.

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    To find out how to get a publication referred to in this guide, and for information about our other services, see Print publications. You can also order ATO publications.

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    General information about calculating non-resident foreign income

    Part and full year non-residents for Australian taxation purposes are required to report their worldwide income if they had a Higher Education Loan Program (HELP) or Trade Support Loan (TSL) liability on 1 June of the relevant income year.

    Worldwide income is both their:

    • repayment income
    • non-resident foreign-sourced income.

    Non-residents with worldwide income converted into Australian dollars exceeding the minimum repayment threshold will be liable to make a repayment of their HELP and TSL liability. Repayment may be in the form of a compulsory repayment and/or an overseas levy depending on how the worldwide income is made up.

    For the period your client was a resident during the year, show in their individual income tax return (IITR) all income for that period, that is, both Australian repayment income and any foreign-sourced income earned as an Australian resident for taxation purposes.

    For the period your client was a non-resident during the year, report all income earned from sources outside Australia in the Non-resident foreign income schedule. Continue to report any Australian income earned as a non-resident in the IITR.

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    Converting income to Australian dollars

    All amounts must be converted to Australian dollars before being reported, using the average annual exchange rate for the financial year most closely corresponding to the relevant Australian income year. For assistance converting the currency, you can use the foreign income conversion calculatorThis link opens in a new window.

    How repayments are calculated

    A client's worldwide income is used to determine any compulsory repayment and/or overseas levy that applies.

    Example: How repayments are calculated

    In the relevant Australian income year, Emily earned Australian-sourced repayment income above the minimum repayment threshold as well as non-resident foreign-sourced income. These two amounts form her total worldwide income.

    The total repayment obligation on Emily’s worldwide income is her worldwide income × the applicable repayment rate.

    As Emily earned over the minimum repayment threshold in Australia, the compulsory repayment component of her repayment is determined as follows:

    Repayment income × the applicable repayment rate = compulsory repayment.

    The overseas levy raised on Emily’s worldwide income is calculated as follows:

    Total repayment obligation − compulsory repayment = Emily’s overseas levy.

    End of example

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    Last modified: 29 May 2018QC 52826