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Edited version of private advice
Authorisation Number: 1052180483192
Date of advice: 30 October 2023
Ruling
Subject: Basis of returning foreign income
Question
Will the Commissioner allow you to return your Country X foreign sourced income on a Country X income year basis on your Australian income tax return?
Answer
Yes. We accept that your circumstances fall within Taxation Ruling IT 2498 Income tax: foreign tax credit system: currency translation of foreign income: trading stock and depreciable plant: basis of returning foreign income: capital gains/ losses. We will allow you to return the foreign sourced income on Country X income year basis.
This ruling applies for the following periods:
Year ended 30 June 20XX
Year ended 30 June 20XX
Year ended 30 June 20XX
Year ended 30 June 20XX
Year ended 30 June 20XX
Year ended 30 June 20XX
The scheme commenced on:
1 July 20XX
Relevant facts and circumstances
You are a resident of Australia for taxation purposes.
Your tax returns are prepared by a tax agent.
Your tax agent has difficulty obtaining information relating to your Country X foreign income in a timely manner to prepare your Australian tax returns by the due date. This is due to the information not being available to finalise because of regulatory and reporting requirements imposed by the relevant foreign authorities.
The income includes dividend, interest, and capital gains.
These payments represent approximately XX - XX% of your total foreign income.
This foreign income is prepared based on a XX/XX financial year.
Your foreign advisors then need time to collect and report that information to your Australian tax agents who then need to convert the information to Australian dollars, contemplate the relevant Australian tax implications and apply an arbitrary allocation to the foreign income and the foreign tax paid over the year.
Your Australian tax advisor faces difficulty in dissecting the foreign income, obtaining the information on a timely manner and particularly income relating to the period between XX/XX and XX/XX.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 6-5