Calculating the offset

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You claim the foreign income tax offset in your income tax return.

If claiming an offset of $1,000 or less, you only need to record the actual amount of foreign income tax paid on your assessable income (up to $1,000).

If claiming a foreign income tax offset of more than $1,000, you will first need to work out your foreign income tax offset limit.

Before you calculate your net income, you must convert all foreign income deductions and foreign tax paid to Australian dollars, refer to Converting foreign income to Australian dollars.

All types of income are treated the same for the purposes of working out the foreign income tax offset.