Section D: Income tax calculation statement

How we use the calculation statement

We use the information which you provide in this section to calculate the Commissioner’s instalment rate under the PAYG instalments system. You must complete all applicable items as accurately as possible to ensure that the rate calculated results in a reliable estimate of tax payable for 2022–23.

To work through the Calculation statement in the tax return, begin with the right-hand column. Four of the labels in the right-hand column require certain labels in the left-hand column to be completed so that the total can be inserted at the appropriate label. The right-hand column labels are:

• C Non-refundable non-carry forward tax offsets
• D Non-refundable carry forward tax offsets
• E Refundable tax offsets
• H Eligible credits.

In this section, the following labels are mandatory to complete:

• A Taxable income
• T1 Tax on taxable income
• J Tax on no-TFN-quoted contributions
• T5 Tax Payable
• I Tax offset refunds.

Calculating your T5 Tax payable and S Amount due or refundable

The steps below are provided to give a basic overview of how the calculation statement is intended to work. Refer to each specific item for a detailed explanation of its application within the calculation statement.

Follow the steps for a basic overview of the calculation statement:

• Step 1: Write the following amounts
• Step 2: Work out the following amounts
• Step 3: Work out the amount at T2 Subtotal 1
• Step 4: Work out the amount at T3 Subtotal 2
• Step 5: Work out the amount at T5
• Step 6: Work out the amount at label H
• Step 7: Work out the amount at label S

Step 1: Write the following amounts

• If the amount at item 11 Deductions – label O Taxable income or loss is positive, write the amount at item 12 – label A Taxable income; write 0 (zero) at label A if label O is a loss.
• Label T1 Tax on taxable income dependent on the compliance status of the fund, see the section below for a detailed explanation of T1 is calculated as follows:    
  • 15% of label A if the fund is a regulated superannuation fund and you have not received a notice of non-compliance from APRA
  • 45% of label A if the fund is a non-complying fund
  • different tax rates apply to some types of income; you must include at label T1 the tax calculated at the correct rate for amounts    
  • item 10 – label U Net non-arm's-length income
  • for small APRA regulated funds, the non-arm's length income calculated using the 'Twice the difference approach'
  • item 10 – label T Assessable income due to changed tax status of fund.
• Label J Tax on no-TFN-quoted contributions (additional tax on these contributions) is calculated on the amount shown at item 10 – label R3 No-TFN-quoted contributions as follows    
  • 32% for a complying fund
  • 2% for a non-complying fund.
• Write the amounts from your records for labels    
  • C1 Foreign income tax offset
  • D1 Early stage venture capital limited partnership tax offset
  • D2 Early stage venture capital limited partnership tax offset carried forward from previous year
  • D3 Early stage investor tax offset
  • D4 Early stage investor tax offset carried forward from previous year
  • E1 Complying fund’s franking credits tax offset
  • E2 No-TFN tax offset
  • E3 National rental affordability scheme tax offset
  • E4 Exploration credit tax offset
  • G Section 102AAM interest charge
  • H2 Credit for tax withheld – foreign resident withholding (excluding capital gains)
  • H3 Credit for tax withheld – where ABN or TFN not quoted (non-individual)
  • H5 Credit for TFN amounts withheld from payments from closely held trusts
  • H6 Credit for interest on no-TFN tax offset
  • H8 Credit for foreign resident capital gains withholding amounts
  • K PAYG instalments raised.
• Follow the fund instructions to calculate label C2 Rebates and tax offsets amount (refer to the label C2 Rebates and tax offsets).

Step 2: Work out the following amounts

• Add labels T1 and J, write the result at label B.
• Add labels C1 and C2, write the result at label C.
• Add labels D1, D2, D3 and D4, write the result at label D.
• Add labels E1, E2, E3 and E4, write the result at label E.

Step 3: Work out the amount at T2 Subtotal 1

Refer to the section for T2 for examples and more information

• If the amount at label C is less than the amount at label B Gross tax    
  • subtract label C from label B
  • write the result at label T2
  • go to step 4.
• If the amount at label C is more than or equal to the amount at label B    
  • write 0 (zero) at labels T2, T3 and T5 Tax payable
  • copy the amount at labels E to I Tax offset refunds (Remainder of refundable tax offsets)
  • go to step 6.

Step 4: Work out the amount at T3 Subtotal 2

Refer to the section for T3 for examples and more information

• If the amount at label D is less than the amount at label T2 Subtotal 1    
  • subtract label D from label T2
  • write the result at label T3
  • go to step 5.
• If the amount at label D is more than or equal to the amount at label T2    
  • write zero at labels T3 and T5 Tax payable
  • copy the amount at labels E to I Tax offset refunds (Remainder of refundable tax offsets)
  • keep a record of any excess offsets that can be carried forward to reduce income tax payable in a future year
  • go to step 6.

Step 5: Work out the amount at T5

Refer to the section for T5 for examples and more information.

If the amount at label E is less than the amount at label T3:

• subtract label E from label T3
• write the result at label T5
• go to step 6.

If the amount at E is more than or equal to the amount at label T3:

• subtract label T3 from label E
• write the result at label I
• write zero at label T5
• go to step 6.

Step 6: Work out the amount at label H

To work out the amount at label H Eligible credits, add labels H2 to H8.

Step 7: Work out the amount at label S

For the amount at label S, add labels T5 and G, and then subtract labels H, I and K:

• if the amount at label S is positive, that amount is payable by the fund
• if the amount at label S is negative, that amount is refundable to the fund.

12 Income tax calculation statement

Complete at item 12:

• A Taxable income
• T1 Tax on taxable income
• J Tax on no-TFN-quoted contributions
• B Gross tax
• Priority of use of the tax offsets
• C Non-refundable non-carry forward tax offsets
• C1 Foreign income tax offset
• C2 Rebates and tax offsets
• T2 Subtotal 1
• D Non-refundable carry forward tax offsets
• D1, D2 Early stage venture capital limited partnership (ESCLVP) tax offset
• D3, D4 Early stage investor tax offset
• T3 Subtotal 2
• E Refundable tax offsets
• E1 Complying fund’s franking credits tax offset
• E2 No-TFN tax offset
• E3 National rental affordability scheme (NRAS) tax offset
• E4 Exploration credits tax offset
• T5 Tax payable
• G Section 102AAM interest charge
• H Eligible credits
• H2 Credit for tax withheld – foreign resident withholding (excluding capital gains)
• H3 Credit for tax withheld – where ABN or TFN not quoted (non-individual)
• H5 Credit for TFN amounts withheld from payments from closely held trusts
• H6 Credit for interest on no-TFN tax offset
• H8 Credit for foreign resident capital gains withholding amounts
• I Tax offset refunds (Remainder of refundable tax offsets)
• K PAYG instalments raised
• S Amount due or refundable

A Taxable income

Show at label A the fund's taxable income.

Label A is mandatory. You must include an amount at label A even if it is zero (write 0).

This amount is the amount shown at item 11 Deductions – label O Taxable income or loss when the Loss code box is blank.

T1 Tax on taxable income

Write at label T1 the amount of tax payable before the allowance of any rebates, tax offsets, and credits. Label T1 reflects the amount at label A (or components of it) multiplied by the applicable tax rate or tax rates. The tax rates potentially applicable are listed in Appendix 3: Rates of tax.

Label T1 is mandatory. You must include an amount at label T1 even if it is zero (write 0).

The compliance status of the fund affects the tax rates that apply. If the fund is a regulated superannuation fund, ADF or PST and has not received a Notice of non-compliance from APRA, the fund is a complying fund and the standard tax rate is 15%. If the fund is a non-complying fund the standard tax rate is 45%.

Different tax rates apply to the following types of income and you must ensure that you apply the correct tax rate to amounts shown at item 10 Income.

For all superannuation funds, at label T Assessable income due to changed tax status of fund the tax rate may be either 15% or 45% depending on the circumstances.

For complying small APRA funds, you must include at label T1 the tax calculated as:

• 45% of the non-arm's length component calculated as lesser of (the ‘Lesser of’ calculation):
  • U Net non-arm's-length income (in Section B, item 10) plus the total non-arm’s length income that arises due to general expenses (if any)
  • Where, for each general expense, the amount of the non-arm’s length income is calculated as:
    
    The difference between the amount of loss, outgoing or expense (revenue or capital in nature) expected to be incurred if the parties had been dealing at arm’s length and the amount of loss, outgoing or expense (revenue or capital in nature) actually incurred (zero if no loss, outgoing or expense was incurred), with the result multiplied by 2 (the ‘Twice the difference approach’ amount)
    Note: Don't reduce this amount by any deduction, including the amount of general expense actually incurred.
  • and the total taxable income for the year written at label O in Section C less any assessable contributions you have written at label R in Section B plus any deductions to the extent they are attributable to those contributions
  • and 15% of the low tax component (label A in Section D less the result of the ‘Lesser of’ calculation above).
• for complying large APRA funds, complying exempt public sector superannuation funds, complying ADFs and PSTs, you must include at label T1 the tax calculated as:
  • 45% of the non-arm's length component calculated as the non-arm's length income for the income year less any deductions to the extent that they are attributable to that income. The non-arm's length component amount is the amount you have shown at label U Net non-arm's length income, and
  • 15% of the low-tax component (label A in Section D less the non-arm's length component).

If you have shown an amount (other than zero) at label R3 No-TFN-quoted contributions then this amount has been included in the amount at label A Taxable income and is therefore included in the calculation of the amount at label T1 calculated at the standard rate of tax applicable to the fund (that is, 15% for a complying fund or 45% for a non-complying fund) to the amount at label A. Show at label J the additional tax calculated (that is, at the rate of 32% for a complying fund or 2% for a non-complying fund) on the label R3 amount.

To help you calculate the tax on taxable income amount, use:

• Example 5
• Example 6
• Example 7.

J Tax on no-TFN-quoted contributions

Show at label J the amount of additional tax payable on no-TFN-quoted contributions shown at label R3 No-TFN-quoted contributions (32% for complying superannuation funds and 2% for non-complying superannuation funds of the label R3 amount). If the amount shown at label R3 is zero, then the amount you show at label J is zero.

Label J is mandatory. You must include an amount at J even if it is zero (write 0).

You must include at label T1 Tax on taxable income the tax calculated at the standard rate on no-TFN-quoted contributions included in taxable income. That is, 15% for a complying fund or 45% for a non-complying fund of the label R3 amount.

To help you calculate tax on no-TFN-quoted contributions, use Example 4.

For more information on the applicable tax rates, see Appendix 3: Rates of tax.

B Gross tax

Show at label B the total of the amounts at labels T1 and J.

To help you calculate the gross tax amount, use Example 4 and Example 5.

Example 4 relates to Income tax calculation – Superannuation fund showing income at item 10 – label R3 No-TFN-quoted contributions, and is made up of 3 parts:

• Example 4a: Complying superannuation fund
• Example 4b: Non-complying superannuation fund
• Example 4c: Nil taxable income or loss

For more information on the applicable tax rates, see Appendix 3.

For more information on the applicable tax rates, see Appendix 3.

For more information on the applicable tax rates, see Appendix 3.

Priority of use of the tax offsets

Funds have access to 3 types of tax offsets:

• non-refundable non-carry forward tax offsets
• non-refundable carry forward tax offsets
• refundable tax offsets.

The first category of tax offsets to be applied against gross tax is label C Non-refundable non-carry forward tax offsets. As the name of this category suggests, if the tax offsets are greater than the gross tax, the excess of offsets is lost. If label B Gross tax is greater than the offsets at label C the remaining tax is shown at label T2 Subtotal 1.

The second category of tax offsets is label D Non-refundable carry forward tax offsets. These offsets reduce any remaining tax at label T2. If the tax offsets are greater than label T2, the remaining tax will be reduced to zero and the excess of offsets will be carried forward to a later income year (subject to the tax offset carry forward rules in Division 65 of the ITAA 1997). If label T2 is greater than the offsets at label D the remaining tax is shown at label T3 Subtotal 2.

The third category of offsets is label E Refundable tax offsets. If the fund is entitled to any refundable tax offsets, the offsets reduce any remaining tax at label T3. If the remaining tax is reduced to zero and not all refundable tax offsets have been used up (that is, the label E Refundable tax offsets amount exceeds the remaining tax at label T3), show the excess of refundable tax offsets at label I Tax offset refunds (Remainder of refundable tax offsets). If refundable tax offsets are less than the remaining tax at label T3 the shortfall becomes your tax payable amount at label T5 Tax payable.

Labels I and T5 are mandatory. You must include an amount at labels I and T5 even if the amount is zero (write 0).

Any amount at label G Section 102AAM interest charge is payable and is added to the label T5 amount.

Label K PAYG instalments raised (rather than just paid) on activity statements and other credits included under label H Eligible credits, along with any amount at label I Tax offset refunds (Remainder of refundable tax offsets) will be applied against the tax payable amount to determine the amount due to be paid by the fund or refundable to the fund.

C Non-refundable non-carry forward tax offsets

Show at label C the total of the amounts at labels C1 and C2.

The rebates and tax offsets shown at label C are not refundable nor are they carried forward. They are only offset against gross tax to reduce it to zero. If these tax offsets are greater than the gross tax, the excess tax offsets cannot be used and are lost. See, Example 6a and Example 6b.

C1 Foreign income tax offset

Show at label C1 the self-determined amount that is the fund’s foreign income tax offset.

The fund may be able to claim a foreign income tax offset where it has paid foreign income tax on an amount included in its assessable income. The fund’s foreign income tax offset cannot exceed the lesser of:

• the foreign income tax paid (or taken to have been paid)
• its foreign income tax offset limit (the greater of $1,000 and the amount calculated under paragraph 770-75(2)(b) of the ITAA 1997).

To calculate the foreign income tax offset, see the Guide to foreign income tax offset rules 2023 (NAT 72923).

If the fund received franked distributions directly or indirectly from a New Zealand franking company, see Trans-Tasman imputation.

C2 Rebates and tax offsets

Show at label C2 the total of rebates and tax offsets available.

Do not include the amounts giving rise to the tax rebate and tax offset.

If the fund is a complying superannuation fund, complying ADF or PST, do not include franking credits that relate to either dividends (including non-share dividends) received or assessable dividends from a New Zealand franking company. Include these at label E1 Complying fund's franking credits tax offset.

If the fund is a non-complying superannuation fund or a non-complying ADF, the tax offset of franking credits that relate to franked dividends received (including franked non-share dividends and assessable franked dividends from a New Zealand franking company) is not refundable. Show the amount of the franking credits at label C2. Make sure you have included the amount of franking credits as appropriate at item 10 at labels:

• I Gross distribution from partnerships
• L Dividend franking credit
• P Trust distributions franking credit
• E Australian franking credits from a New Zealand company
• U Net non-arm's-length income.

If the fund is claiming a no-TFN tax offset for tax paid on no-TFN-quoted contributions in one of the most recent 3 income years ending before 2022–23, do not claim the tax offset here. Claim the tax offset at E2 No-TFN tax offset.

T2 Subtotal 1

Show at label T2 the subtotal of tax payable after label C Non-refundable non-carry forward tax offsets has been offset against label B Gross tax.

Label T2 cannot be less than zero.

Work out the amount at label T2 as follows.

• If the amount at label C is less than the amount at label B (see, Example 6a)    
  • subtract label C from label B
  • write the result at label T2.
• If the amount at label C is more than or equal to the amount at label B (see, Example 6b)    
  • write 0 (zero at labels T2, T3 and T5)
  • copy the amount at labels E to I Tax offset refunds (remainder of refundable tax offsets). Label I is mandatory. You must include an amount at label I even if it is zero (write 0).

Example 6 shows how to calculate T2 Subtotal 1, and is made up of 2 parts:

• Example 6a: Applying C Non-refundable non-carry forward tax offsets when B Gross tax is greater than offsets – a tax payable position
• Example 6b: Applying C Non-refundable non-carry forward tax offsets when B Gross tax is less than offsets – a nil tax payable position.

D Non-refundable carry forward tax offsets

If the total of the non-refundable carry forward tax offsets at label D is greater than the remaining tax at label T2, the excess may be carried forward to a future income year. If the amount at label T2 is greater than the total of the non-refundable carry forward tax offsets at label D, the remaining tax is shown at label T3 Subtotal 2.

Write at label D the total of labels:

• D1 Early stage venture capital limited partnership tax offset
• D2 Early stage venture capital limited partnership tax offset carried forward from previous year
• D3 Early stage investor tax offset, and
• D4 Early stage investor tax offset carried forward from previous year.

If you did not write an amount at labels D1, D2, D3 or D4, leave label D blank.

The tax offsets shown at label D are not refundable.

D1, D2 Early stage venture capital limited partnership (ESCLVP) tax offset

The fund may be able to claim the ESVCLP tax offset if one or both of the following apply:

• it is entitled to the ESVCLP tax offset in the income year
• it has an amount of unused ESVCLP tax offset carried forward from a previous income year.

D1 Early stage venture capital limited partnership tax offset

Is the fund entitled to claim an ESVCLP tax offset for contributions made during the year?

The fund's 2022–23 ESVCLP tax offset is the sum of its tax offsets, based on the fund's contributions to the ESVCLP:

• as a limited partner of the ESVCLP, or
• through a partnership or trust.

The ESVCLP must have become unconditionally registered on or after 7 December 2015.

If the fund is a limited partner of an ESVCLP, the fund's tax offset is limited to 10% of the lesser of the following:

• the fund's total contributions to the ESVCLP during the income year (certain exclusions apply), and
• the fund's share (based on the fund's interest in the entire capital of the ESVCLP at the end of the income year) of the sum of eligible venture capital investments made by the ESVCLP during the period at the start of the income year and ending 2 months after the end of the income year.

If the fund is a partner in a partnership or a beneficiary of a trust which has contributed to an ESVCLP, the fund may be entitled to an amount of ESVCLP tax offset. A written notification will be provided by the partnership or trustee of the trust setting out the fund's entitlement to this tax offset. If a written notification has not been provided, contact the partnership or the trustee.

Write the total amount of the ESVCLP tax offsets at label D1.

For more information about the ESVCLP tax offset and eligibility requirements, see ESVCLP tax incentives and concessions.

D2 Early stage venture capital limited partnership tax offset carried forward from previous year

Does the fund have an amount of unused ESVCLP tax offset carried forward from a previous year?

To work out whether the fund can carry forward an amount of ESVCLP tax offset from a previous year to 2022–23, see Division 65 of the ITAA 1997.

The unused ESVCLP tax offset carried forward from a previous year may need to be adjusted for any net exempt income.

The unused ESVCLP tax offset carried forward from a previous year is reduced by 30 cents for every dollar of unused net exempt income, provided the fund had taxable income for that year.

Write at label D2 the amount of unused ESVCLP tax offset carried forward from the previous year, less any reductions, if applicable.

For more information, see ESVCLP tax incentives and concessions.

D3, D4 Early stage investor tax offset

The fund may be entitled to the early stage investor tax offset for the income year if the fund:

• invested in an early stage innovation company during the year, or
• has an amount of unused early stage investor tax offset carried forward from a previous year.

The maximum offset (including current year and carried forward prior year amounts) that the fund, and its affiliates combined, can claim in 2022–23 is $200,000.

D3 Early stage investor tax offset

Is the fund entitled to claim an early stage investor tax offset in 2022–23?

To work out the amount to include at label D3, follow the steps:

Step 1: Work out the total amount the fund paid for eligible shares in all early stage innovation companies in the income year.

If the requirements of the sophisticated investor test under the Corporations Act 2001 are not met for at least one of the investments made in an early stage innovation company during the year, the step 1 amount must not exceed $50,000. If the step 1 amount exceeds $50,000 the fund cannot claim this offset.

Step 2: Multiply the step 1 amount by 20%.

Step 3: Identify the fund's entitlements to any early stage investor tax offsets as a beneficiary of a trust or a partner in a partnership that has invested in an early stage innovation company during the year.

If the fund is a partner in a partnership (excluding a partnership that is an ESVCLP) or a beneficiary of a trust which has invested in an early stage innovation company during the income year, the fund may be entitled to an early stage investor tax offset. Written notification will be provided by the partnership or trustee of the trust, setting out the fund's entitlement to this tax offset. If written notification has not been provided, contact the partnership or the trustee.

Step 4: Add together the amounts at step 2 and step 3. This is the step 4 amount.

Step 5: Subtract from $200,000 the amount (if any) shown at label D4 Early stage investor tax offset carried forward from previous year. This is the step 5 amount.

Step 6: If the step 4 amount is equal to or less than the step 5 amount, write the step 4 amount at label D3.

If the step 4 amount is greater than the step 5 amount, write the step 5 amount at label D3.

The amount shown at label D3 may need to be further reduced if any of the fund’s affiliates are entitled to the early stage investor tax offset, whether for investments they made in 2022–23 or carried forward from a previous year.

The maximum offset (including current year and carried forward prior year amounts) that the fund, and its affiliates combined, can claim in 2022–23 is $200,000.

D4 Early stage investor tax offset carried forward from previous year

Does the fund have an amount of unused early stage investor tax offset carried forward from a previous year?

To work out whether the fund can carry forward an amount of the early stage investor tax offset from a previous year, see Division 65 of the ITAA 1997.

The unused early stage investor offset carried forward from a previous year may need to be adjusted for any net exempt income.

The unused early stage investor tax offset carried forward from a previous year is reduced by 30 cents for every dollar of unused net exempt income, provided the fund had taxable income for that year.

Write at label D4 the amount of unused early stage investor tax offset carried forward from a previous year, less any reductions if applicable.

For more information about the tax offset and the eligibility requirements, see Tax incentives for early stage investors.

T3 Subtotal 2

Show at label T3 the subtotal of tax payable after label D Non-refundable carry forward tax offsets has been offset against label T2 Subtotal 1.

Label T3 cannot be less than zero.

Work out the amount at label T3 as follows.

• If the amount at label D is less than the amount at label T2 (see, Example 7a)    
  • subtract label D from label T2
  • write the result at label T3.
• If the amount at label D is more than or equal to the amount at label T2 (see, Example 7b)    
  • write zero at labels T3 and T5
  • copy the amount at label E to I Tax offset refunds (remainder of refundable tax offsets). Label I is mandatory. You must include an amount at I even if it is zero (write 0).

Example 7 shows how to calculate T3 Subtotal 2, and is made up of 2 parts:

• Example 7a: Applying D Non-refundable carry forward tax offsets when T2 Subtotal 1 is greater than offsets – a tax payable position
• Example 7b: Applying D Non-refundable carry forward tax offsets when T2 Subtotal 1 is less than offsets – a nil tax payable position.

E Refundable tax offsets

Show at label E the total of the amounts at labels E1, E2, E3 and E4.

The tax offsets shown at label E are refundable, although they must first be offset against gross tax to reduce it to zero, if there is any gross tax to be paid after label C and label D have been applied. Any excess of refundable tax offsets is shown at label I Tax offset refunds (Remainder of refundable tax offsets) and is applied in calculating the fund’s amount due or refundable. See Example 9a and Example 9b.

E1 Complying fund’s franking credits tax offset

Subject to the fund satisfying the holding period rule, a complying superannuation fund, complying ADF or PST is entitled to a refundable franking credits tax offset in respect of franked dividends received (including franked non-share dividends and assessable franked dividends from a New Zealand franking company).

Show at label E1 the amount of franking credits that relate to franked dividends received including franked non-share dividends and assessable franked dividends from a New Zealand franking company. Make sure you have included the amount of franking credits in the assessable income shown at item 10 Income – labels:

• I Gross distribution from partnerships
• L Dividend franking credit
• P Trust distributions franking credit
• E Australian franking credits from a New Zealand company
• U Net non-arm's length income.

If the fund is a non-complying superannuation fund or a non-complying ADF, the fund is entitled to a non-refundable tax offset of franking credits that relate to franked dividends received (including franked non-share dividends and assessable franked dividends from a New Zealand franking company) against the income tax liability of the fund. Show the amount of the franking credits at label C2 Rebates and tax offsets.

Make sure you have included the amount of franking credits in as appropriate at item 10 – labels:

• I Gross distribution from partnerships
• L Dividend franking credit
• P Trust distributions franking credit
• E Australian franking credits from a New Zealand company
• U Net non-arm's length income.

Do not show at label E1 any credits that the fund is entitled to have applied against its 2022–23 tax liability. These credits are shown elsewhere, for example, at label K PAYG instalments raised.

A dividend from a New Zealand franking company may also carry New Zealand imputation credits. An Australian resident cannot claim New Zealand imputation credits.

E2 No-TFN tax offset

Show at label E2 the no-TFN tax offset claimed.

A fund is entitled to a refundable no-TFN tax offset for 2022–23 if:

• tax was payable by the fund on an amount of no-TFN-quoted contributions in one of the most recent 3 income years ending before 2022–23 and
• the no-TFN-quoted contributions were made to the fund to provide superannuation benefits for an individual who has quoted (for superannuation purposes) their TFN to the fund for the first time in 2022–23.

The no-TFN tax offset is the total amount of the additional tax payable on amounts of no-TFN-quoted contributions for which both of the above conditions have been met.

A successor fund is entitled to a refundable no-TFN tax offset for 2022–23 if:

• tax was payable by the previous original fund on an amount of no-TFN-quoted contributions in 2022–23 (the year in which the successor fund transfer occurred) or one of the most recent 3 income years ending before 2022–23, and
• the no-TFN-quoted contributions were made to the previous original fund to provide superannuation benefits for an individual who has never quoted (for superannuation purposes) their TFN to the previous original fund and has quoted their TFN to the successor fund for the first time in 2022–23.

The no-TFN tax offset is the total amount of the additional tax payable on amounts of no-TFN-quoted contributions for which both of the above conditions have been met.

E3 National rental affordability scheme (NRAS) tax offset

Show at label E3 the amount of NRAS tax offset entitlement.

The refundable tax offset is only available where the Housing Secretary from the Department of Social Services has issued a certificate under the NRAS. In order to claim the offset in 2022–23, the NRAS certificate must relate to the NRAS year comprising the period 1 May 2022 to 30 April 2023.

For more information, see National rental affordability scheme – taxation issues.

E4 Exploration credits tax offset

Show at label E4 the amount of exploration credits received during the income year.

A fund may be entitled to a tax offset for exploration credits received during the income year if it was an Australian resident for the whole of the income year.

The amount of the tax offset is the total value of exploration credits the fund received during the income year. However, special rules may apply where the fund has received exploration credits from a partnership or a trust.

For more information, see:

• What to do if you receive exploration credits
• Division 418 of the Income Tax Assessment Act 1997.

T5 Tax payable

Show at label T5 the amount of tax payable after the amount at label E has been offset against the amount at label T3.

Label T5 cannot be less than zero.

Label T5 is mandatory. You must include an amount at label T5 even if it is zero (if zero write 0).

Work out the amount at label T5 as follows.

• If the amount at label E is less than the amount at label T3 (see, Example 9a)    
  • subtract label E from label T3
  • write the result at label T5.
• If the amount at label E is more than or equal to the amount at label T3 (see, Example 9b)    
  • subtract label T3 from label E
  • write the result at label I
  • write 0 (zero) at label T5.

Example 9 shows how to calculate T5 Tax payable, and is made up of 2 parts:

• Example 9a: Applying E Refundable tax offsets when B Gross tax is greater than tax offsets (this is a payable position)
• Example 9b: Applying E Refundable tax offsets when B Gross tax is less than tax offsets (this is a refundable position).

G Section 102AAM interest charge

Show at label G the amount of interest calculated under section 102AAM of the ITAA 1936 in respect of a distribution received from a non-resident trust. Section 102AAM of the ITAA 1936 imposes an interest charge on certain distributions from non-resident trusts.

For more information, see Foreign income return form guide.

H Eligible credits

Show at label H the total of the amounts at labels:

• H2 Credit for tax withheld – foreign resident withholding (excluding capital gains)
• H3 Credit for tax withheld – where ABN or TFN not quoted (non-individual)
• H5 Credit for TFN amounts withheld from payments from closely held trusts
• H6 Credit for interest on no-TFN tax offset
• H8 Credit for foreign resident capital gains withholding amounts

H2 Credit for tax withheld – foreign resident withholding (excluding capital gains)

Show at label H2 the total amount of tax withheld from payments to the fund that were subject to foreign resident withholding in Australia. This includes the fund’s share of foreign resident withholding credits for amounts subject to such withholding and distributed to the fund from a partnership or trust.

You complete label H2 only if the amount was withheld in Australia and remitted to the ATO.

Where a credit is claimed at label H2 for tax withheld under foreign resident withholding, the corresponding gross payment must be included at item 10 – labels I Gross distribution from partnerships, Q Trust distributions other amounts, or S Other income (see gross payments subject to foreign resident withholding).

Do not include credits for amounts withheld from foreign resident capital gains withholding at label H2. Include this amount at label H8.

H3 Credit for tax withheld – where ABN or TFN not quoted (non-individual)

Show at label H3:

• the total tax withheld from payments to the fund that were subject to withholding as the fund’s ABN or TFN was not quoted; this amount equals the sum for the amounts shown in the tax withheld boxes on the Non-individual PAYG payment summary schedule 2023, see Schedules
• any amounts withheld from investments because the fund’s TFN has not been quoted to the financial institution.

If a credit is shown at label H3 for tax withheld because an ABN or TFN was not quoted, the corresponding gross payment must be included at item 10 – label H Gross payments where ABN not quoted.

Do not include at label H3 any contributions that have been received by the fund for a member who has not quoted their TFN; these are reported at item 10 – label R3 No-TFN-quoted contributions.

H5 Credit for TFN amounts withheld from payments from closely held trusts

Show at label H5 the total amount withheld from payments where the fund has not provided its TFN to the trustee of a closely held trust that is subject to the TFN withholding rules.

The trustee of a closely held trust is required to withhold amounts from payments made to the fund if the fund did not provide a TFN. The rate of withholding is 49% (top rate plus Medicare levy) of the payments made.

Where amounts have been withheld the trustee of a closely held trust is required to provide a beneficiary with a payment summary in the approved form. The credit amount claimed at label H5 appears on the payment summary.

Do not include at label H5 amounts from any other withholding rules.

If a credit is reported at label H5 for tax withheld, the corresponding gross payment is included as a trust distribution at item 10 – labels N to Q (as applicable), unless it is non-arm’s length income of the fund in which case it is included at item 10 – label U Net non-arm's length income.

For more information about the TFN withholding rules for closely held trusts see TFN withholding for closely held trusts.

H6 Credit for interest on no-TFN tax offset

Show at label H6 the total calculated interest amount of 50c or more for interest payable on the no-TFN tax offset claimed at label E2.

Interest on the no-TFN tax offset is only payable if all the following conditions are met:

• a member of the fund provided their TFN to their employer before the end of an income year (the past year, for example 2021–22)
• the employer was required by section 299C of the SISA to inform the fund of the individual’s TFN by the end of the past year, but did not do so
• as a result, the contributions made in respect of that member were no-TFN-quoted contributions income of the fund in that past year
• an amount of additional tax (which is the interest-bearing tax) that was payable in respect of the no-TFN-quoted contributions income counts towards the no-TFN tax offset under Subdivision 295-J of the ITAA 1997 for an income year (the current year, for example 2022–23) for the fund
• the no-TFN tax offset under that subdivision is applied when assessing the fund for the current year.

The interest is payable on each amount of interest-bearing tax.

Interest on tax that counts towards the no-TFN tax offset is calculated for the period between the later of:

• the day on which the amount of interest-bearing tax was paid
• the day by which the amount of interest-bearing tax was required to be paid

and

• the day on which the fund lodges its tax return for the current year (which is deemed to be the day on which the current year assessment is made).

The date of payment of the interest-bearing tax is:

• the date shown on the receipt
• the date the payment is posted to us, plus 3 business days
• the date shown on the fund's bank statement if payment is made through direct debit, that is, electronic funds transfer (EFT).

If the relevant interest period extends over 2 or more quarters, calculate the interest for the number of days in the interest period in each quarter. Example 10 has more information on how to calculate the amount of interest in such circumstances.

The rate of interest payable on the interest-bearing tax is the base interest rate determined under section 8AAD of the TAA. See Credit interest rates and calculations for the applicable interest rates up to 30 June 2023.

Keep a record of the amount of interest payable on tax that counts towards the no-TFN tax offset. This interest is assessable income of the fund in the income year in which it is paid to the fund or credited against another fund liability.

H8 Credit for foreign resident capital gains withholding amounts

Write at label H8 the total amount of tax withheld from payments to the fund that were subject to foreign resident capital gains withholding in Australia. Include at label H8 the fund’s share of foreign resident capital gains withholding credits distributed to the fund from its share of net income from a trust.

You should only claim at label H8 a credit equal to the amount of foreign resident capital gains withholding paid by a purchaser to the ATO on your behalf. The ATO would have issued the Fund with confirmation of this amount.

Do not include credits for amounts withheld from foreign resident withholding at label H8. Include these at label H2 Credit for tax withheld – foreign resident withholding (excluding capital gains).

For more information, see Capital gains withholding: Impacts on foreign and Australian residents.

I Tax offset refunds (Remainder of refundable tax offsets)

Label I is mandatory. You must include an amount at I even if it is zero (if zero write 0).

If the amount at label E is less than or equal to the amount at label T3, that is, there is no refundable tax offset amount remaining, then you must write 0 (zero) at I.

If the amount at label E is greater than the amount at label T3 the fund has an excess amount of refundable tax offsets remaining from label E, you must show this amount at label I. See Example 9a and Example 9b.

K PAYG instalments raised

Show at label K the total of the fund’s PAYG instalments for 2022–23, whether or not the instalments have actually been paid.

Include the following amounts in the total instalment amount:

• If the fund did not vary but used the instalment amounts worked out by us, show the amounts pre-printed at label T7 on the fund’s activity statements or at label T5 on the annual instalment activity statement.
• If the fund did not use the instalment amounts worked out by us, include the amounts which the fund reported at label 5A on the fund’s activity statements, reduced by any credits the fund claimed at label 5B.

To ensure the fund receives the correct amount of credit for its PAYG instalments, make sure all of its activity statements are finalised before lodging the tax return. If the fund is required to lodge its activity statements, it should do so even if it can’t pay on time or had nothing to pay.

The fund is entitled to a credit for its PAYG instalments, even if it has not actually paid a particular instalment. However, the fund will be liable for the general interest charge on any outstanding instalment for the period from the due date for the instalment until the date it is fully paid.

S Amount due or refundable

Show at label S the balance of tax payable or refundable as indicated in the tax return.

The amount at label S does not take into account any interim or voluntary payments that the fund has made against its income tax liability for 2022–23. If the fund has made such payments, take these into account in calculating the final payment but do not show the interim or voluntary payment amounts on this tax return.

For the amount at label S, add labels T5 and G, and then subtract labels H, I and K

• If the amount at label S is positive, that amount is payable by the fund.
• If the amount at label S is negative, that amount is refundable to the fund.

We do not require a payment when the tax return is lodged. However, if you prefer to make a payment at this time, see How to pay.

Record keeping

The fund must keep all documentation issued by financial institutions detailing payments of income and any TFN amounts deducted from those payments.

The fund must also maintain details of any TFN amounts deducted from an income payment made to the fund and subsequently refunded by their financial institution. The fund must keep a record of the following details for the refund:

• amount of refund received
• date of refund
• investment reference number, for example, the bank account number of the investment relating to the refund.

Continue to: Section E: Losses