• Completing your Australian tax return

    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

    To ensure that your tax return is filled out correctly and to prevent delays with your assessment, you need to complete your tax return by following these instructions.

    Step 1

    Complete the Schedule of additional information – item 20 Joint Petroleum Development Area.

    Using e-tax

    To complete the schedule using e-tax, select Tools in the Menu bar and then choose 'Additional information'. This option is only enabled on the Spouse details screen (click on Spouse details in the Navigator). A blank notepad will be displayed.

    Enter the heading SCHEDULE OF ADDITIONAL INFORMATION – ITEM 20 JOINT PETROLEUM DEVELOPMENT AREA followed by the appropriate sentence on the schedule of additional information (A, B, C or D). For example, if you were an Australian resident for the whole year you complete the schedule as follows:

    SCHEDULE OF ADDITIONAL INFORMATION – ITEM 20 JOINT PETROLEUM DEVELOPMENT AREA

    I was an Australian resident for the whole year.

    Step 2

    If using Individual tax return instructions 2014, 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.

    Step 3

    Read the instructions below and go to the parts that apply to you:

    If you printed X in the A box on the schedule of additional information go to Part 1 – Australian Resident.

    If you printed X in the B box on the schedule of additional information go to Part 2 – Resident of Timor-Leste.

    If you printed X in the C box on the schedule of additional information go to Part 3 – Resident of another country.

    If you printed X in the D box on the schedule of additional information you may need to apportion your JPDA income and complete more than one part. You will need to follow the instructions in

    Part 1 for the period that you were an Australian resident

    Part 2 for the period that you were a resident of Timor-Leste

    Part 3 for the period that you were a resident of another country.

    Part 1 – Australian Resident

    Use this part if you were an Australian resident for tax purposes during 2013–14.

    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, 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:

    • item 20 (supplementary section)
    • Total supplement tax offsets (supplementary section)
    • item T (Tax return for individuals, page 5).
    • Total tax offsets (Tax return for individuals, page 5).

     

    If you are using e-tax, include the tax paid to Timor-Leste from the Foreign tax paid entry 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 $74,000 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 $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.

    See worksheet 1 and worksheet 2 for how Jose would fill them in.

    Jose will have to pay an amount of $18,421.50. That is, $53,127.50 (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.

    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 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 Individual tax return instructions 2014 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
    • 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
    • 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 2014.

    Worksheet 2: Foreign income tax offset calculation

     

    Jose

    You

    Your taxable income as shown on your tax return

    $169,300

    $          

    (a)

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

    $53,127

    $

    (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).

    $73,800

    $

    (d)

    Tax** on (d).

    $16,639

    $

    (e)

    Take (e) away from (b).

    $36,488

    $

    (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 box on the Schedule of additional information. 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 during 2013–14. Otherwise, go to Part 3 – Resident of another country.

    What you need

    You need to know

    A proportion of 10% of your income earned for work or services performed in the JPDA is taxed in Australia. Your payer should have deducted Australian tax at the minimum rate of 29% on 10% of your JPDA income.

    When completing items D1 to D5, you show only 10% of your expenses relating to your work in the JPDA.

    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 $200,000 and Australian PAYG tax withheld of $3,480. His sole source of income was from the JPDA. Peter had work-related expenses of $200.

    Peter will claim $20 (that is, 10% of $200) as his work-related expenses at D5 Other work-related expenses on his tax return.

    Peter’s taxable income is $19,980. His Australian tax payable is $338.20. Therefore, he will receive a tax refund of $3,141.80, that is, $338.20 (tax payable) minus $3,480 (tax withheld).

    Peter uses worksheet 3.

    End of example

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

     

    Peter

    You

    Total gross JPDA income included on your payment summary

    $200,000

    $          

    (a)

    Divide (a) by 10.

    $20,000

    $

    (b)

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

    Include 10% of any work-related expenses that relate to your JPDA income at items D1 to D5.

    Go to Part 3 – Resident of another country if you printed X in the box on the schedule of additional information. 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 during 2013–14.

    What you need

    You need to know

    Your net income earned in the JPDA is taxed in Australia. You can claim a tax offset of 90% of Australian tax payable on that income. Your payer should have withheld Australian tax on 10% of your JPDA income.

    What you need to do

    Show all your Australian income (including all JPDA income) and deductions as instructed by Individual tax return instructions 2014 or e-tax. 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 whose only Australian income is JPDA income

    Your taxable income as shown on your tax return

    $          

    (a)

    Calculate your tax using the rates and calculators or e-tax*

    $

    (b)

    Multiply (b) by 90.

    $

    (c)

    Divide (c) by 100.

    $

    (d)

    The amount at (d) is your JPDA tax offset. Include this amount at C item T10 Other non-refundable tax offsets on your tax return (supplementary section).

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

    Example 3

    Gavin, a chef, was a resident of Malaysia for the whole year. His Australian assessable income was $80,000, of which $70,000 was JPDA income. 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 T10. Gavin uses worksheet 5 below to calculate his JPDA tax offset.

    Gavin’s JPDA tax offset is $20,445. He transfers this amount to C item T10 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 who have JPDA income and other Australian income

     

    Gavin

    You

    Your taxable income as shown on your tax return

    $79,900

               

    (a)

    Calculate your tax using the rates and calculators or e-tax*.

    $25,968

     

    (b)

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

    0.325

     

    (c)

    Net JPDA income (after any allowable deductions relating to JPDA income)

    $69,900

     

    (d)

    Multiply (c) by (d).

    $22,717.50

     

    (e)

    Multiply (e) by 90.

    $2,044575.00

     

    (f)

    Divide (f) by 100.

    $20,445.75

     

    (g)

    The amount at (g) is your JPDA offset. Include this amount at item T10 Other non-refundable tax offsets on your tax return (supplementary section).

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

      Last modified: 30 Jun 2014QC 39813