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Foreign income return form guide 2009-10

This guide explains measures relating to the taxation of foreign income for Australian residents.

Last updated 28 June 2010

About this guide

The Foreign income return form guide contains an explanation of measures relating to the taxation of foreign income derived by, or attributed to, Australian residents. For an explanation of the foreign income tax offset (FITO) measures see the Guide to foreign income tax offset rules (NAT 72923). The chapters in this guide are:

Chapter 1

Attribution of the current year profits of a controlled foreign company (CFC)

Chapter 2

Transferor trust and related measures

Chapter 3

Taxation of foreign dividends and branch profits

Chapter 4

Proving your assessment

Chapter 5

Consolidation (consolidated income tax treatment for groups of entities)

Summary sheets at the end of this guide provide a quick reference to assist you in determining if and to what extent the measures apply to you. Where necessary, worksheets have also been provided to help you work out your tax liability.

Although the guide is quite detailed, it may not cover all the qualifications and conditions contained in the law that relate to your circumstances. For instance, it does not discuss the special rules that apply in working out attributable income for companies conducting banking or insurance activities. If you are not sure about the application of the law, phone 13 28 66.

The Australian Taxation Office (ATO) regularly receives information from foreign tax authorities under our tax treaties regarding foreign source income paid to (and the tax withheld from) Australian resident taxpayers. We are making increasing use of information-matching technology to verify the correctness of tax returns. Ensure that all information is fully and correctly declared in the relevant tax return.

Unless otherwise stated, references in this guide to provisions of the law are to provisions of the Income Tax Assessment Act 1936 (ITAA 1936).

What's new?

Retrospective amendments to allow the reduction of consideration from the disposal of an asset

Tax Laws Amendment (Foreign Source Income Deferral) Bill (No. 1) 2010 was introduced to Parliament on 13 May 2010. When enacted, the changes will amend the income tax law to allow the consideration for the disposal of assets held on revenue account (as opposed to just interests held on capital account) to be reduced by associated foreign investment fund (FIF) and CFC income which has previously been attributed. These changes will have effect to tax assessments for the 2006-07 income year and any subsequent income years.