• Foreign source income

    We may send a letter about foreign source income if we receive information that you derived income or other taxable amounts from foreign sources and these do not match amounts included in your tax return.

    If you received income from overseas, you must declare this on your Australian tax return. Foreign income exempt from Australian tax may still be taken into account to work out the amount of tax you have to pay on your other income.

    The letter will include a schedule showing the relevant information from your tax return compared with the information we hold.

    All foreign income, deductions and foreign tax paid must be converted to Australian dollars before you include them on your tax return.

    If you have other foreign source income that you did not declare you should advise us of these as part of this review.

    Understanding your foreign source income schedule

    Below is a sample foreign source income schedule. Keep in mind that your schedule will contain your own details and may not look exactly like this one.

    Sample foreign source income schedule

    Foreign source income schedule
    for the year ended 30 June 2015

    Information provided under a double-tax agreement

    The information below has been provided to us under authority of the double-tax agreement between the Australian Government and the government of the foreign country specified. If you have paid foreign tax in another country, you may be entitled to an Australian foreign income tax offset. We will use the information provided to us to work out your foreign income tax offset entitlement when we adjust your tax return.

    Financial year

    Foreign revenue authority

    Type of income

    Tax withheld amount

    Assessable amount

    2015

    Canada

    Pension

    $0

    $1,700

    Total amounts reported

    $0

    $1,700

     

    Information provided by the Australian Transaction Reports and Analysis Centre (AUSTRAC)

    The transaction information shown below has been provided to us by AUSTRAC. It details international fund transfer instructions made to you from the country provided.

    Financial year

    Country

    Transaction date

    Payer name

    Assessable amount

    2015

    Singapore

    06/07/2014

     

    $4,600

    2015

    Malaysia

    03/09/2014

     

    $7,400

    Total amounts reported

    $12,000

    The following definitions will help you understand your schedule:

    • Financial year – The financial year to which the income relates.
    • Foreign revenue authority – An overseas government agency responsible for the collection of revenue in that country.
    • Type of income – The type of foreign source income you received – for example, interest, royalties, business profits, director’s fees, pension, capital gains or other income.
    • Tax withheld amount – The amount of tax that was withheld.
    • Assessable amount – Gross income, including salary and wages, dividends, interest and rent from a foreign source, before any deductions are allowed. Assessable income can also include net capital gains, eligible termination payments and other amounts from a foreign source that are not ordinarily classed as income.
    • Country – The country in which the transaction occurred.
    • Transaction date – The date of the transaction.
    • Payer name – The recorded payer of the transaction if available.
    • Foreign income tax offset – An offset you may be entitled to if you have paid foreign tax in another country.

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    Last modified: 11 Feb 2016QC 43485