• Part 1 - Resident of Australia

    Attention

    Warning:

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

    End of attention

    Use this part if you were an Australian resident for tax purposes during 2010-11.

    What you need

    • Details of your JPDA income and any foreign tax paid from your PAYG payment summary - foreign employment for the 2010-11 income year, or letter from your employer.
    • TaxPack and TaxPack supplement if you are completing a paper tax return. See More information to find out how to get copies of these publications.

    You need to know

    You are taxed on your net assessable JPDA income at resident rates of tax with a foreign income tax offset allowed for the lesser of the:

    • Australian tax payable on your net assessable JPDA income, and
    • tax paid to Timor-Leste.

    What you need to do

    Use worksheets 1 and 2 to complete the following items on your tax return:

    • Income item 1 salary or wages
    • Deductions items D1 to D5, work-related expenses
    • Net foreign employment income at U and Foreign income tax offset at O item 20 (in the supplementary section), foreign source income and foreign assets or property.

    Follow these steps to complete your tax return.

    Step 1

    Complete worksheet 1 if you have a payment summary that includes JPDA income. Worksheet 1 shows you how to deal with your JPDA income and deductions.
     

    Step 2

    Unless you are using e-tax, complete all parts of your tax return except:

    • O item 20 (supplementary section)
    • Total supplement tax offsets (supplementary section)
    • item T
    • Total tax offsets
     

    If you are using e-tax, include the tax paid to Timor-Leste from the Foreign tax paid label on your payment summary. Include the amount at Foreign tax paid column at item 20 (screen 2310).

    Step 3

    Complete worksheet 2. Worksheet 2 shows you how to work out your foreign income tax offset for your net assessable JPDA income. In the course of completing worksheet 2, you will complete O item 20 on your tax return (supplementary section). 

    Step 4

    Complete the remainder of your tax return.

    Example 1 will help you fill in worksheets 1 and 2.

    Example 1

    Jose, a driller, lived in Darwin (zone A) when he was not at a drilling site. For 8 months of the income year he worked in the JPDA. Jose received a PAYG payment summary - individual non-business which showed $24,000 gross salary and wages and Australian PAYG tax withheld of $5,424. He received a separate PAYG payment summary - foreign employment that showed gross salary and wages of $96,000 relating to his period in the JPDA and that, in addition to the $11,664 Australian tax withheld, $17,280 tax had been withheld and paid to Timor-Leste. The amount paid to Timor Leste was shown on the payment summary at the 'foreign tax paid' label.

    Jose had work-related expenses of $700 of which $500 related to his work while in the JPDA. He had no other income or deductions. Jose's taxable income is therefore $119,300. Jose had no dependants. He had appropriate hospital cover for the whole year and was not liable to pay Medicare levy surcharge. He is entitled to a zone offset of $338 as he lived in Darwin for more than 183 days.

    Refer to worksheet 1 and worksheet 2 to see how Jose would fill them in.

    Jose will receive a refund of $826.15. That is, $33,879.85 (tax and Medicare levy payable), minus $17,280 (foreign income tax offset), minus $338 (zone tax offset), minus $17,088 ($5,424 + $11,664 Australian tax withheld).

    If Jose had worked in Australia for the full year and had the same income and deductions, he would have completed the tax return differently and had a different PAYG Australian tax withheld amount, but his refund would have been the same.

    Note: Calculations are based on Monthly payments.

    Worksheet 1: Net assessable JPDA income subject to tax in Australia and Timor-Leste

    If you have more than one PAYG payment summary - foreign employment or PAYG payment summary - individual non-business showing JPDA income, you should add them together to obtain a total gross JPDA income figure.

     

    Jose

    You

    Total gross JPDA income included on your PAYG payment summaries

    Include this amount at item 1 on your tax return.

    $96,000

    $

    (a)

    Total work-related expenses directly related to your JPDA income*

    Include this amount at the appropriate items in D1 to D5 on your tax return.

    $500

    $

    (b)

    Take (b) away from (a). Include the amount at (c) at U item 20 (e-tax will do this automatically). This is the amount of your net assessable JPDA income.

    $95,500

    $

    (c)

    * Work-related expenses are explained at questions D1 to D5 in TaxPack and e-tax.

    Did you have work-related expenses?

     If you had work-related expenses relating to your JPDA income (that is, you showed an amount at (b) in worksheet 1), then you should complete items D1 to D5 on your tax return or in e-tax.

    These items deal with deductions for work-related expenses as follows:

    D1 car, D2 travel, D3 clothing, D4 self-education, and D5 others.

    Are you using e-tax?

    If you are using e-tax, e-tax will do the remainder of the calculations for you. However, if you want to work out the amount of your foreign income tax offset for yourself, complete worksheet 2.

    You need the amounts for your tax and Medicare items, These are available from your Tax estimate screen (screen 8101) on the navigator bar. Make sure you have completed all your income, deductions and Medicare items first. Include the tax paid to Timor-Leste in the Foreign tax paid column at item 20 (screen 2310).

    Your foreign income tax offset is shown on the Tax offsets available screen (screen 8102). You navigate to this screen from the Tax estimate screen (screen 8101).

    Completing worksheet 2

    You cannot use worksheet 2 if you have:

    • exempt foreign employment income
    • pre-commencement excess foreign income tax
    • other foreign income
    • unapplied foreign losses from prior years
    • other foreign income tax offsets available.

    If any of the above apply, you may need to read the Guide to foreign income tax offset rules 2010-11.

    Worksheet 2: Foreign income tax offset calculation

     

    Jose

    You

    Your taxable income as shown on your tax return

    $119,300

    $

    (a)

    Tax** on your taxable income using our rates and calculators or e-tax*

    $33,879

    $

    (b)

    Your net assessable JPDA income (the amount at (c) in worksheet 1 shown at U item 20).

    $95,500

    $

    (c)

    Take (c) away from (a).

    $23,800

    $

    (d)

    Tax** on (d).

    $3,027

    $

    (e)

    Take (e) away from (b).

    $30,852

    $

    (f)

    Tax paid to Timor-Leste on your JPDA income as advised by your payer

    $17,280

    $

    (g)

    Your foreign income tax offset is:

    • if the amount at (g) does not exceed $1,000, the amount at (g)
    • if the amount at (f) is greater than or equal to the amount at (g), the amount at (g)
    • if the amount at (f) is less than the amount at (g), the amount at (f).
    • Include your foreign income tax offset at O item 20 on your tax return (supplementary section).

    * If using e-tax you must complete all your income, deduction and Medicare items first.

    ** This includes any Medicare levy and Medicare levy surcharge payable.

     

     Go to Part 2 - Resident of Timor-Leste if you printed X in the D box on the Schedule of additional information. Otherwise, go to Check that you have...

    Last modified: 29 Jun 2011QC 27276