For which types of foreign tax is a credit allowable?



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Creditable foreign taxes include:

  • foreign tax equivalent in nature to Australian income tax - for example, a tax on net income or capital gains
  • foreign withholding tax similar to Australian withholding tax on interest and dividends
  • foreign taxes listed in Australia's double taxation agreements.

Taxation Ruling IT 2507 provides a list of creditable taxes. The list in the ruling is not exhaustive. If you wish to seek credit for foreign taxes not identified in the list you should ask for a ruling from the Tax Office, using the format set out in Taxation Ruling IT 2507.

You are not allowed a credit for penalties, fines, interest, and unitary or credit absorption taxes.

Last modified: 05 Dec 2006QC 18000