Foreign taxes not included



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

End of attention

The following types of foreign tax do not count towards a foreign income tax offset:

  • inheritance taxes
  • annual wealth taxes
  • net worth taxes
  • taxes based on production
  • credit absorption taxes - that is, a tax that is payable only because the taxpayer or another entity is entitled to foreign income tax offset in Australia
  • unitary taxes - that is, a tax on income, profits or gains of a company derived from sources within the country where the tax is imposed that takes into account income, losses, outgoings or assets of the company (or of an associated company) derived, incurred or situated outside that country, except where the tax only takes those factors into account:
    • if such an associated company is a resident of the foreign country for the purposes of the law of the foreign country, or
    • for the purposes of granting any form of relief in relation to tax imposed on dividends received by one company from another company.

Penalties, fines and interest do not qualify as foreign income tax.

If you are unsure about whether a specific foreign tax is a foreign income tax, you can write to us and request a private binding ruling.

Last modified: 23 Jul 2009QC 22894