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B Interest expenses overseas

Last updated 12 February 2019

Show at B the deductible interest incurred on money borrowed from overseas sources to:

  • acquire income-producing assets
  • finance operations, or
  • meet current expenses.

If the TOFA rules apply to the fund, include ‘Interest expenses overseas’ from financial arrangements subject to the TOFA rules at B.

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).

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, it must keep a record of the following:

  • name and address of recipients
  • amount of interest paid or credited
  • amount of 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 2015.