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Foreign income return form guide 2012-13

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

Last updated 1 August 2019

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 2010–11 and later income years, the Foreign Investment Fund (FIF) and deemed present entitlement rules (sections 96B and C of the Income Tax Assessment Act 1936 (ITAA 1936) have been repealed. In relation to these measures, this guide deals only with aspects of ongoing relevance: for example, relief to prevent double taxation where FIF attribution has previously occurred.

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

Taxation of foreign investment fund (FIF) interests

Chapter 5

Proving your assessment

Chapter 6

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 the measures apply to you, and to what extent. Where necessary, worksheets have also been provided to help you work out your tax liability.

Although the guide is detailed, it may not cover all the qualifications and conditions contained in the law that relate to your circumstances: for example, it does not discuss the special rules in Subdivision F of Division 8 of Part X of the ITAA 1936 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.

Under our tax treaties, the Australian Taxation Office (ATO) regularly receives information from foreign tax authorities regarding foreign source income paid to Australian resident taxpayers (and tax withheld from such payments). We are making increasing use of information-matching technology to verify the correctness of tax returns. You should 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 ITAA 1936.

What's new?

Subdivision 815-A of the Income Tax Assessment Act 1997 (ITAA 1997) has been enacted and confirms:

  • Australia's ability to assess tax based on the associated enterprises article in Australia's tax treaties, and
  • the relevance of Organisation for Economic Cooperation and Development (OECD) guidance material.