• Overseas transactions

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    29 Overseas transactions

    Was the aggregate amount of your transactions or dealings with international related parties (including the value of any property/service transferred or the balance of any loans) greater than $2 million?

    If the answer to this question is no, print X in the No box at W.

    If the answer is yes, print X in the Yes box at W and complete and attach an International dealings schedule 2012 (NAT 73345).

    Attach the completed International dealings schedule 2012 to the tax return. Print X in the Yes box at Have you attached any 'other attachments'? at the top of page 1 of the tax return.

    Where the trust is a member of a consolidated group for the whole income year and derived foreign income the responsibility for preparing the schedule will rest on the head company of the consolidated group. Where a return is required because the trust had a period in the income year when it was not a member of a consolidated group (a non-membership period) the trust should complete an International dealings schedule 2012 where it has derived foreign income attributable to non-membership period.

    The aggregate amount of the trust's transactions or dealings is the total amount of all dealings, whether on revenue or capital account (including property transfers or service provision), and includes the balance of any loans or borrowings outstanding with international related parties. Transactions must not be netted off against each other, for example a $600,000 purchase from, and a $700,000 sale to, a related party should be treated as totalling $1,300,000, not $100,000.

    International related parties are persons who are parties to international dealings that can be subject to section 136ADExternal Link of the ITAA 1936 or the associated enterprises article of the relevant double-tax agreement. The term includes the following:

    • any overseas entity or person who participates directly or indirectly in the management, control or capital of the trust
    • any overseas entity or person in respect of which the trust participated directly or indirectly in the management, control or capital
    • any overseas entity or person in respect of which persons who participate directly or indirectly in its management, control or capital are the same persons who participate directly or indirectly in the management, control or capital of the trust

    'Participates' includes a right of participation, the exercise of which is contingent on an agreed event occurring. 'Person' has the same meaning as in subsection 6 (1)External Link of the ITAA 1936 and section 995-1External Link of the ITAA 1997.

    For more information as to the relevant degree of participation, see TR IT 2514External Link Income tax: Company Schedule 25A: Information return for companies that transact business with related overseas entities.

    The type of dealings or transactions which will require the trust to complete an International dealings schedule 2012 are its dealings with related parties as above, such as an overseas holding company, overseas subsidiary, or non-resident trust in which the entity has an interest. These dealings or transactions may be the provision or receipt of services, or transactions in which money or property has been sent out of Australia, or received in Australia from an overseas source during the income year. They may include the transfer of tangible or intangible property, provision or receipt of services, or the provision or receipt of loans or financial services.

    If money or property is not actually sent out of Australia or received in Australia, but accounting entries are made that have the effect of money or property being transferred, this is also to be taken as an international transaction.

    Non-resident beneficiaries

    Was any beneficiary who was not a resident of Australia at any time during the income year 'presently entitled' to a share of the income of the trust?

    If the answer to this question is no, print X in the No box at A. If the answer is yes, print X in the Yes box at A.

    Ensure that the details of the beneficiaries and the assessable amounts of net income to which each beneficiary, who is a non-resident at the end of the income year, is presently entitled are entered under Non-resident beneficiary additional information in J and K at the bottom of item 65 Statement of distribution. Do not include the non-resident beneficiary's share of the trust income which is subject to withholding tax, such as withholding tax on interest, dividend and royalties.

    If a beneficiary is a non-resident at the end of the income year and is presently entitled to a share of the income of the trust, the trustee is liable to tax on that share of the net income of the trust that is attributable to a period when the beneficiary was a resident, regardless of its source, and so much of the share of the net income that is attributable to a period where the beneficiary was a non-resident and is also attributable to Australian sources.

    In the case of amounts covered by a withholding requirement, the trustee, at the time of distribution, deducts the tax payable and remits it to the ATO.

    Attach a statement for each beneficiary who was a non-resident of Australia at any time during the income year, and who was presently entitled to income of the trust, showing:

    • full details of any distribution to the beneficiary, including amounts of interest, royalties, franked dividends and unfranked dividends
    • if a withholding amount has been paid and remitted to the ATO from the distribution, the amount of such distribution and the withholding amount paid
    • name and residential address
    • if any change occurred in the residency status of the beneficiary during the income year, details of when the beneficiary became or ceased to be a resident
    • if from any distribution (other than interest, dividend or royalty income subject to non-resident withholding tax) made to the beneficiary, tax has been deducted and remitted to the ATO, the amount of the credit claimed for remittances made
    • if the trust is a fixed trust and at least 90% of its assets, held either directly or indirectly, are not taxable Australian property
    • if it is contended that all or part of the non-resident beneficiary's share of the income included income of the trust derived outside Australia and while the beneficiary was not a resident
      • the beneficiary's share of that income
      • the basis of the contention that the beneficiary is not a resident of Australia.
       

    Also provide evidence that:

    • if no amounts have been transferred overseas, the beneficiary's share of income has been applied for the benefit of the beneficiary or otherwise dealt with on behalf of the beneficiary
    • the beneficiary has been notified of the entitlement.

    Amount of tax spared foreign income tax offsets

    Show at Q the amount of foreign income tax offsets relating to foreign tax forgone under an investment incentive provided by a foreign government, if the tax forgone is deemed to have been paid for the purpose of Australia's foreign income tax offset rules.

    Transactions with specified countries

    Did you send any funds or property to, or receive any funds or property from, any of the countries listed below? This includes sending or receiving funds or property indirectly, through another entity or country.

    Do you have the ability to control the disposition of any funds, property, investments, or any other assets located in any of the countries listed below? This includes:

    • funds or assets may be located elsewhere, but are controlled or managed from one of the countries listed below, and
    • where you have an expectation you are able to control the disposition of the funds or assets, or you have the capacity to control the disposition indirectly, for example, through associates.

    Print X in the Yes box for yes, or X in the No box for no at C.

    The specified countries are as follows:

    Andorra

    Liberia

    Anguilla

    Liechtenstein

    Antigua and Barbuda

    Marshall Islands

    Aruba

    Mauritius

    Bahamas

    Monaco

    Bahrain

    Montserrat

    Belize

    Nauru

    Bermuda

    Niue

    British Virgin Islands

    Panama

    Cayman Islands

    Saint Martin (Dutch part)

    Cook Islands

    Samoa

    Curacao

    San Marino

    Cyprus

    Seychelles

    Dominica

    St Kitts & Nevis

    Gibraltar

    St Lucia

    Grenada

    St Vincent & the Grenadines

    Guernsey

    Turks and Caicos Islands

    Isle of Man

    US Virgin Islands

    Jersey

    Vanuatu

    Labuan

     

    Interest

    Section 128FA exempt interest paid

    Show at D the amount of any interest paid to non-residents that is exempt from interest withholding tax under section 128FAExternal Link of the ITAA 1936. The interest withholding tax exemption is available in respect of interest paid by the trustee of an eligible unit trust on certain widely offered debentures and certain widely offered debt interests that are syndicated loans. The definition of eligible unit trust incorporates certain public unit trusts, corporate unit trusts and most public trading trusts. Unit trusts are also able to access the exemption if all their units are held by specified unit holders.

    Interest to financial institution exempt from withholding under a double-tax agreement (DTA)

    Write at I the total amount of any interest paid to Finnish, French, Japanese, New Zealand, Norwegian, South African, United Kingdom and United States financial institutions that is exempt from withholding tax because of Article 11(3)(b) of a tax treaty with these countries.

    DTA country

    Complete Y if you have shown an amount at Interest to financial institution exempt from withholding under a DTA.

    Print at Y the applicable three letter country code:

    • USA if the exempt interest payments were to United States financial institutions
    • GBR if the exempt interest payments were to United Kingdom financial institutions
    • FIN if the exempt interest payments were to Finnish financial institutions
    • NOR if the exempt interest payments were to Norwegian financial institutions
    • FRA if the exempt interest payments were to French financial institutions
    • ZAF if the exempt interest payments were to South African financial institutions
    • JPN if the exempt interest payments were to Japanese financial institutions
    • NZL if the exempt interest payments were to New Zealand financial institutions.

    Print the code for the country where the most exempt interest was paid if payments were made to financial institutions in these countries.

    Last modified: 13 Aug 2014QC 28037