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  • Completing your Australian tax return

    Complete your tax return by following these instructions:

    1. Complete the Schedule of additional information – item 20 Joint Petroleum Development Area.
    2. If you are completing a paper tax return you must read Individual tax return instructions 2020 and Individual tax return instructions supplement 2020, and attach your completed schedule to page 3 of your tax return. Print X in the Yes box at Taxpayer’s declaration question 2 on page 10 of your tax return.
    3. Read the instructions below and go to the parts that apply to you:  

    Part 1 – Australian resident

    Use this part if you were an Australian resident for tax purposes during 2019–20.

    What you need

    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
    • Timor-Leste tax paid on your JPDA employment income.

    What you need to do

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

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

    Follow these steps to complete your tax return:

    1. Complete worksheet 1. This shows you how to deal with your JPDA income and deductions.
    2. Complete all parts of your tax return except:
      • item 20 (supplementary section)
      • Total supplement tax offsets (supplementary section)
      • item T (Tax return for individuals)
      • Total tax offsets (Tax return for individuals).
       
    3. Complete worksheet 2. This 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).
    4. Complete the remainder of your tax return.

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

    Example 1

    Jose, an employee driller, lived in Darwin (zone A) when he was not at a drilling site. For eight months of the income year he worked in the JPDA. Jose's tax-ready income statement from non-JPDA employment showed $74,000 gross salary and Australian PAYG tax withheld of $26,260. A separate tax-ready income statement from his JPDA employment showed gross salary of $96,000 relating to his period in the JPDA and that, in addition to the $12,152 Australian tax withheld, $17,280 tax had been withheld and paid to Timor-Leste. The amount paid to Timor-Leste was shown on the income statement 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 $169,300. 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.

    Worksheet 1 – Jose

    Row

    Calculation elements

    Amount

    a

    Total gross JPDA income included on your income statements and PAYG payment summaries

    Include this amount at item 1 on the tax return.

    $96,000

    b

    Total work-related expenses directly related to JPDA income (see note)

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

    $500

    c

    Take row b away from row a. Include the amount at row c at U item 20.

    This is the amount of net assessable JPDA income.

    $95,500

    Worksheet 2 – Jose

    Row

    Calculation elements

    Amount

    a

    Taxable income as shown on tax return

    $169,300

    b

    Tax (see note) on taxable income using our calculators and tools

    $53,524

    c

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

    $95,500

    d

    Take row c away from row a.

    $73,800

    e

    Tax (see note) on row d.

    $17,008

    f

    Take row e away from row b.

    $36,516

    g

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

    $17,280

    Note: This includes any Medicare levy and Medicare levy surcharge payable.

    Jose's foreign income tax offset is the lesser of row f and row g. Jose’s foreign income tax offset is $17,280.

    Jose includes his foreign income tax offset at O item 20 on his tax return (supplementary section).

    Jose will receive a refund of $2,506. This is:

    • $53,524 (tax and Medicare levy payable)
    • minus $338 (zone tax offset)
    • minus $17,280 (foreign income tax offset)
    • minus $38,412 ($26,260 + $12,152 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.

    Calculations are based on monthly payments.

    End of example

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

    If you have more than one tax-ready income statement or PAYG payment summary – foreign employment or PAYG payment summary – individual non-business showing JPDA income, add them together to work out your total gross JPDA income figure.

    Worksheet 1

    Row

    Calculation elements

    Amount

    a

    Total gross JPDA income included on your income statements and PAYG payment summaries.

    Include this amount at item 1 on your tax return.

    $

    b

    Total work-related expenses directly related to your JPDA income (see note).

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

    $

    c

    Take row b away from row a. Include the amount at row c at U item 20. This is the amount of your net assessable JPDA income.

    $

    Note: Work-related expenses are explained at questions D1 to D5 in Individual tax return instructions 2020.

    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 complete items D1 to D5 on your tax return.

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

    • D1 car
    • D2 travel
    • D3 clothing
    • D4 self-education
    • D5 others.
    Completing worksheet 2

    You cannot use worksheet 2 if you have:

    • exempt foreign employment income
    • other foreign income
    • unapplied foreign losses from prior years
    • other foreign income tax offsets available.

    If any of the above apply, read Guide to foreign income tax offset rules 2020.

    Worksheet 2: Foreign income tax offset calculation

    Worksheet 2

    Row

    Calculation elements

    Amount

    a

    Your taxable income as shown on your tax return

    $

    b

    Tax (see note) on your taxable income using our calculators and tools

    $

    c

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

    $

    d

    Take row c away from row a.

    $

    e

    Tax (see note) on row d

    $

    f

    Take row e away from row b.

    $

    g

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

    $

    Note: This includes any Medicare levy and Medicare levy surcharge payable.

    Your foreign income tax offset is the lesser of row f and row g.

    Include your foreign income tax offset at O item 20 on your tax return (supplementary section).

    If you earned JPDA income as an independent contractor (not an employee), complete the worksheets only for taxable income for 1 July 2019 to 29 August 2019. You must apply the ordinary foreign income tax offset rules for your taxable income from 30 August 2019. See Calculating and claiming your foreign income tax offset.

    If you chose d on the Schedule of additional information, go to Part 2 – Resident of Timor-Leste. Otherwise, go to Check that you have...

    Part 2 – Resident of Timor-Leste

    Use this part if you were a resident of Timor-Leste for tax purposes and earned JPDA income during 1 July 2019 to 29 August 2019.

    What you need

    You need to know

    10% of your income earned for work or services performed in the JPDA during 1 July 2019 to 29 August 2019 is taxed in Australia. Your payer should have deducted Australian tax at the minimum rate of 32.5% on 10% of your JPDA income.

    When completing items D1 to D5, show only 10% of your expenses relating to your work in the JPDA during 1 July 2019 to 29 August 2019.

    What you need to do

    Before you start on item 1 on your tax return, complete worksheet 3. First, add up the gross amounts shown on all your payment summaries that are JPDA income. Example 2 below has been provided to help you fill in worksheet 3.

    Example 2

    Peter, a labourer, was a resident of Timor-Leste for the whole year. His PAYG payment summary – foreign employment shows a gross payment of $28,000 for 1 July 2019 to 29 August 2019 and Australian PAYG tax withheld of $910. His sole source of income was from the JPDA. Peter had work-related expenses of $100 for this period.

    Peter will claim $10 (that is, 10% of $100) as his work-related expenses at D5 Other work-related expenses on his tax return.

    Peter’s taxable income is $2,790. His Australian tax payable is $906.75. Therefore, he will receive a tax refund of $3.25, that is, $906.75 (tax payable) minus $910.00 (tax withheld).

    Peter uses worksheet 3.

    Worksheet 3 – Peter

    Row

    Calculation elements

    Amount

    a

    Gross JPDA income included on your tax-ready income statement or payment summary for 1 July 2019 to 29 August 2019

    $28,000

    b

    Divide a by 10.

    $2,800

     

    End of example

    Worksheet 3: Assessable JPDA income for resident of Timor-Leste

    Worksheet 3

    Row

    Calculation elements

    Amount

    a

    Gross JPDA income for 1 July 2019 to 29 August 2019 included on your tax-ready income statement or payment summary

    $

    b

    Divide a by 10.

    $

    Include the amount at row b at item 1 on your tax return.

    Include 10% of any work-related expenses that relate to your JPDA income for 1 July 2019 to 29 August 2019 at items D1 to D5.

    If you chose d on the schedule of additional information, go to Part 3 – Resident of another country. Otherwise, go to Check that you have...

    Part 3 – Resident of another country

    Use this part if you were a resident of a country other than Australia or Timor-Leste for tax purposes and earned JPDA income during 1 July 2019 to 29 August 2019.

    What you need

    You need to know

    Your net income earned for work or services performed in the JPDA during 1 July 2019 to 29 August 2019 is taxed in Australia. You can claim a tax offset of 90% of Australian tax payable on that income. Your payer should have withheld 10% of the applicable Australian tax on your JPDA income for this period.

    What you need to do

    Show all your Australian income (including your JPDA income for 1 July 2019 to 29 August 2019) and deductions as instructed by Individual tax return instructions 2020. Use worksheet 4 or worksheet 5 to calculate your tax offset.

    Use worksheet 4 if the only Australian income you had was JPDA income; otherwise, use worksheet 5. If you are using worksheet 5, example 3 will assist you.

    Worksheet 4: JPDA tax offset for foreign residents (other than residents of Timor-Leste) whose only Australian income is JPDA income

    Worksheet 4

    Row

    Calculation elements

    Amount

    a

    Your taxable income as shown on your tax return

    $

    b

    Calculate your tax using the calculators and tools

    $

    c

    Multiply row b by 90

    $

    d

    Divide row c by 100

    $

    The amount at row d is your JPDA tax offset. Include this amount at C item T9 Other non-refundable tax offsets on your tax return (supplementary section).

    Example 3

    Gavin, a chef, was a resident of Malaysia for the whole year. His Australian assessable income was $30,000, of which he earned $24,000 JPDA income from 1 July 2019 to 29 August 2019. He paid $100 for work-related expenses related to earning his JPDA income but had no other allowable deductions. He had no other amount to show at item T9. Gavin uses worksheet 5 below to calculate his JPDA tax offset.

    Worksheet 5 – Gavin

    Row

    Calculation elements

    Amount

    a

    Your taxable income as shown on your tax return

    $29,900

    b

    Calculate your tax using the calculators and tools

    $9,717.50

    c

    Divide row b by row a (round to 3 decimal places)

    0.325

    d

    Net JPDA income for 1 July 2019 to 29 August 2019 (after any allowable deductions relating to the JPDA income)

    $23,900

    e

    Multiply row c by row d.

    $7,767.50

    f

    Multiply row e by 90.

    $699,075

    g

    Divide row f by 100.

    $6,990.75

    Gavin’s JPDA tax offset is $6,990.75. He transfers this amount to C item T9 on his tax return (supplementary section) and prints H in the CLAIM TYPE box at the right of C.

    End of example

    Worksheet 5: JPDA tax offset for foreign residents (other than residents of Timor-Leste) who have JPDA income and other Australian income

    Worksheet 5

    Row

    Calculation elements

    Amount

    a

    Your taxable income as shown on your tax return

    $

    b

    Calculate your tax using the calculators and tools.

    $

    c

    Divide row b by row a (round to 3 decimal places).

     

    d

    Net JPDA income for 1 July 2019 to 29 August 2019
    (after any allowable deductions relating to the JPDA income)

    $

    e

    Multiply row c by row d.

    $

    f

    Multiply row e by 90.

    $

    g

    Divide row f by 100.

    $

    The amount at row g is your JPDA offset. Include this amount at C item T9 Other non-refundable tax offsets on your tax return (supplementary section).

    Last modified: 28 May 2020QC 62045