Show at B the deductible interest incurred on money borrowed from overseas sources to:
- acquire income-producing assets
- finance operations, or
- meet current expenses.
Even if the TOFA rules apply to the fund, show at B all interest incurred on money borrowed from overseas sources. This includes interest from financial arrangements subject to the TOFA rules.
If what you show at B includes an amount brought to account under the TOFA rules, also complete item 16 Taxation of financial arrangements (TOFA).
See also:
Guide to the taxation of financial arrangements (TOFA)
The fund should generally withhold an amount of tax (withholding tax) from interest paid or payable to non-residents, and from interest paid to a resident which was derived by the resident through an overseas branch. The fund must remit these amounts to us.
Record keeping
If the fund paid interest to non-residents, keep a record of the:
- name and address of recipients
- amount of interest paid or credited, and
- amount of withholding tax withheld, and the date it was remitted to us.
If the fund has withheld amounts from payments to non-residents the fund may need to lodge a PAYG withholding from interest, dividend and royalty payments paid to non-residents - annual report by 31 October 2010. For more information, phone the Business Infoline on 13 28 66.