B Interest expenses overseas



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End of attention

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.

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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).

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For more information, see Guide to the taxation of financial arrangements (TOFA) rules.

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 2011. For more information, phone 13 28 66.

Last modified: 11 Jan 2012QC 28016