Overseas transactions

29 Overseas transactions

Was the aggregate amount of your transactions or dealings with international related parties (including the value of any property or service transferred, or the balance of any loans) greater than $2 million?

No Print X in the No box at W.

Yes Print X in the Yes box at W.

Did the thin capitalisation provisions apply? (See appendix 3 for more information.)

Print X in the appropriate box at O.

If you answered yes at labels 29W or 29O, complete and attach an International dealings schedule 2014 to the tax return. Print X in the Yes box at Have you attached any 'other attachments'? at the top of page 1 of the tax return.

However, if the partnership was a subsidiary member of a consolidated group or MEC group for the entire income year, you do not need to complete a return or International dealings schedule 2014.

Where the partnership is a member of a consolidated group or MEC group for the whole income year and derived foreign income, the responsibility for preparing the schedule will rest on the head company of the group.

Where a return is required because the partnership had a period in the income year when it was not a member of a consolidated group or MEC group (a non-membership period) the partnership should complete an International dealings schedule 2014 where it has derived foreign income attributable to any non-membership period.

The aggregate amount of the partnership’s transactions or dealings is the total amount of all dealings, whether on revenue or capital account (including property transfers or service provision) and includes the balance of any loans or borrowings outstanding with international related parties. Transactions must not be netted off against each other, for example, a $600,000 purchase from, and a $700,000 sale to, related parties should be treated as totalling $1,300,000, not $100,000.

International related parties are persons who are not dealing wholly independently with one another in their commercial or financial relations. The term includes:

• any overseas entity or person who participates directly or indirectly in the management, control or capital of the partnership
• any overseas entity or person in respect of which the partnership participated directly or indirectly in the management, control or capital
• any overseas entity or person in respect of which persons who participate directly or indirectly in its management, control or capital are the same persons who participate directly or indirectly in the management, control or capital of the partnership.

‘Participates’ includes a right of participation, the exercise of which is contingent on an agreed event occurring. ‘Person’ has the same meaning as in subsection 6(1) of the ITAA 1936 and section 995-1 of the ITAA 1997.

The type of dealings or transactions which will require the partnership to complete the International dealings schedule 2014 are dealings with related parties as above, such as an overseas holding company, overseas subsidiary, overseas branch or non-resident trust in which the entity has an interest. These dealings or transactions may be the provision or receipt of services, or transactions in which money or property has been sent out of Australia, or received in Australia from an overseas source during the income year. They may include the transfer of tangible or intangible property, provision or receipt of services, or the provision or receipt of loans or financial services.

If money or property is not actually sent out of Australia or received in Australia, but accounting entries are made that have the effect of money or property being transferred, this is also to be taken as an international transaction.

Overseas expenses

Interest expenses overseas

Show at D the amount of interest paid to non-residents. Include this amount at I item 5.

If you include an amount at D, you must complete an International dealings schedule 2014.

An amount of tax (withholding tax) is generally withheld from:

• interest paid (or payable) to non-residents, and
• from interest derived by a resident through an overseas branch.

You must remit these amounts to us. You cannot claim a deduction unless you have remitted any withholding tax to the Commissioner of Taxation. If you have withheld amounts from payments to non-residents, you may need to lodge a PAYG withholding from interest, dividend and royalty payments paid to non-residents – annual report (NAT 7187) by 31 October 2014. For more information, phone 13 28 66.

Royalty expenses overseas

Show at E the royalty expenses paid to non-residents during the income year.

If you include an amount at E, complete an International dealings schedule 2014.

Include this amount at J item 5, plus or minus any reconciliation adjustment for royalty expenses that you included at B Expense reconciliation adjustments item 5.

An amount of tax (withholding tax) is generally withheld from royalties:

• paid or payable to non-residents and
• derived by a resident through an overseas branch.

You must remit this amount to us. You cannot claim a deduction unless you have remitted any withholding tax to the Commissioner. If you have withheld amounts from payments to non-residents, you may need to lodge a PAYG withholding from interest, dividend and royalty payments paid to non-residents – annual report (NAT 7187) by 31 October 2014. For more information, phone 13 28 66.

Record keeping

Keep a record of the following:

• names and addresses of recipients
• amounts paid
• nature of the benefit derived, for example, a copy of the royalty agreement
• details of tax withheld where applicable, and the date on which it was remitted to us.

Transactions with specified countries

Did you send any funds or property to, or receive any funds or property from, any of the countries listed below? This includes sending or receiving funds or property indirectly, for example, through another entity or country.

Do you have the ability to control the disposition of any funds, property, investments, or any other assets located in any of the countries listed below? This includes:

• funds or assets that may be located elsewhere, but are controlled or managed from one of the countries listed below, and
• where you have an expectation you are able to control the disposition of the funds or assets, or you have the capacity to control the disposition indirectly, for example, through associates.

Print X in the Yes box for yes, or X in the No box for no at C.

The specified countries are as follows:

Andorra	Liberia
Anguilla	Liechtenstein
Antigua and Barbuda	Marshall Islands
Aruba	Mauritius
Bahamas	Monaco
Bahrain	Montserrat
Belize	Nauru
Bermuda	Niue
British Virgin Islands	Panama
Cayman Islands	Saint Martin (Dutch part)
Cook Islands	Samoa
Curacao	San Marino
Cyprus	Seychelles
Dominica	St Kitts & Nevis
Gibraltar	St Lucia
Grenada	St Vincent & the Grenadines
Guernsey	Turks & Caicos Islands
Isle of Man	US Virgin Islands
Jersey	Vanuatu
Labuan (in Malaysia)