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Completing your Australian tax return

Last updated 30 May 2016

To ensure that your tax return is filled out correctly and to prevent delays with your assessment, you need to complete your tax return by following these instructions.

Step 1

Complete the Schedule of additional information – item 20 Joint Petroleum Development Area.

Step 2

If you are completing a paper tax return you will need to refer to Individual tax return instructions 2016 and Individual tax return instructions supplement 2016, and attach your completed schedule to page 3 of your tax return. Print X in the Yes box at Taxpayer’s declaration question 2 on page 10 of your tax return.

Step 3

Read the instructions below and go to the parts that apply to you:

If you printed X in the A box on the schedule of additional information, go to Part 1 – Australian Resident.

If you printed X in the B box on the schedule of additional information, go to Part 2 – Resident of Timor-Leste.

If you printed X in the C box on the schedule of additional information, go to Part 3 – Resident of another country.

If you printed X in the D box on the schedule of additional information you may need to apportion your JPDA income and complete more than one part. You will need to follow the instructions in

Part 1 for the period that you were an Australian resident

Part 2 for the period that you were a resident of Timor-Leste

Part 3 for the period that you were a resident of another country.

Part 1 – Australian Resident

Use this part if you were an Australian resident for tax purposes during 2015–16.

What you need

You need to know

You are taxed on your net assessable JPDA income at resident rates of tax with a foreign income tax offset allowed for the lesser of the:

  • Australian tax payable on your net assessable JPDA income
  • tax paid to Timor-Leste.

What you need to do

Use worksheets 1 and 2 to complete the following items on your tax return:

  • item 1 Salary or wages, for income
  • items D1 to D5, for deductions for work-related expenses
  • U Net foreign employment income and O Foreign income tax offset item 20 (in the supplementary section), for foreign source income and foreign assets or property.

Follow these steps to complete your tax return.

Step 1

If you have a payment summary that includes JPDA income, complete worksheet 1. This shows you how to deal with your JPDA income and deductions.

Step 2

Complete all parts of your tax return except:

  • item 20 (supplementary section)
  • Total supplement tax offsets (supplementary section)
  • item T (Tax return for individuals)
  • Total tax offsets (Tax return for individuals).
 

Step 3

Complete worksheet 2. This shows you how to work out your foreign income tax offset for your net assessable JPDA income. In the course of completing worksheet 2, you will complete O item 20 on your tax return (supplementary section).

Step 4

Complete the remainder of your tax return.

Example 1 will help you fill in worksheets 1 and 2.

Example 1

Jose, a driller, lived in Darwin (zone A) when he was not at a drilling site. For 8 months of the income year he worked in the JPDA. Jose received a PAYG payment summary – individual non-business which showed $74,000 gross salary and wages and Australian PAYG tax withheld of $26,260. He received a separate PAYG payment summary – foreign employment that showed gross salary and wages of $96,000 relating to his period in the JPDA and that, in addition to the $12,152 Australian tax withheld, $17,280 tax had been withheld and paid to Timor-Leste. The amount paid to Timor-Leste was shown on the payment summary at the 'foreign tax paid' label.

Jose had work-related expenses of $700 of which $500 related to his work while in the JPDA. He had no other income or deductions. Jose's taxable income is therefore $169,300. Jose had no dependants. He had appropriate hospital cover for the whole year and was not liable to pay Medicare levy surcharge. He is entitled to a zone offset of $338 as he lived in Darwin for more than 183 days.

See worksheet 1 and worksheet 2 for how Jose would fill them in.

Jose will receive a refund of $2,056.
This is $53,974 (tax and Medicare levy payable)
minus $338 (zone tax offset)
minus $17,280 (foreign income tax offset)
minus $38,412 ($26,260 + $12,152 Australian tax withheld).

If Jose had worked in Australia for the full year and had the same income and deductions, he would have completed the tax return differently and had a different PAYG Australian tax withheld amount, but his refund would have been the same.

Calculations are based on monthly payments.

End of example

Worksheet 1: Net assessable JPDA income subject to tax in Australia and Timor-Leste

If you have more than one PAYG payment summary – foreign employment or PAYG payment summary – individual non-business showing JPDA income, you should add them together to obtain a total gross JPDA income figure.

 

Jose

You

Total gross JPDA income included on your PAYG payment summaries

Include this amount at item 1 on your tax return.

$96,000

$          

(a)

Total work-related expenses directly related to your JPDA income*

Include this amount at the appropriate items in D1 to D5 on your tax return.

$500

$

(b)

Take (b) away from (a). Include the amount at (c) at U item 20. This is the amount of your net assessable JPDA income.

$95,500

$

(c)

Work-related expenses are explained at questions D1 to D5 in Individual tax return instructions 2016.

Did you have work-related expenses?

If you had work-related expenses relating to your JPDA income (that is, you showed an amount at (b) in worksheet 1), then you should complete items D1 to D5 on your tax return.

These items deal with deductions for work-related expenses as follows:

  • D1 car
  • D2 travel
  • D3 clothing
  • D4 self-education
  • D5 others.

Completing worksheet 2

You cannot use worksheet 2 if you have:

  • exempt foreign employment income
  • other foreign income
  • unapplied foreign losses from prior years
  • other foreign income tax offsets available.

If any of the above apply, you may need to read the Guide to foreign income tax offset rules 2016.

Worksheet 2: Foreign income tax offset calculation

 

Jose

You

Your taxable income as shown on your tax return

$169,300

$          

(a)

Tax** on your taxable income using our rates and calculators

$53,974

$

(b)

Your net assessable JPDA income (the amount at (c) in worksheet 1 shown at U item 20).

$95,500

$

(c)

Take (c) away from (a).

$73,800

$

(d)

Tax** on (d).

$17,008

$

(e)

Take (e) away from (b).

$36,966

$

(f)

Tax paid to Timor-Leste on your JPDA income as advised by your payer

$17,280

$

(g)

Your foreign income tax offset is:

  • if the amount at (g) does not exceed $1,000, the amount at (g)
  • if the amount at (f) is greater than or equal to the amount at (g), the amount at (g)
  • if the amount at (f) is less than the amount at (g), the amount at (f).

Include your foreign income tax offset at O item 20 on your tax return (supplementary section).

** This includes any Medicare levy and Medicare levy surcharge payable

If you printed X in the D box on the Schedule of additional information, go to Part 2 – Resident of Timor-Leste. Otherwise, go to Check that you have...

Part 2 – Resident of Timor-Leste

Use this part if you were a resident of Timor-Leste for tax purposes during 2015–16. Otherwise, go to Part 3 – Resident of another country.

What you need

You need to know

A proportion of 10% of your income earned for work or services performed in the JPDA is taxed in Australia. Your payer should have deducted Australian tax at the minimum rate of 32.5% on 10% of your JPDA income.

When completing items D1 to D5, you show only 10% of your expenses relating to your work in the JPDA.

What you need to do

Before you start on item 1 on your tax return, complete worksheet 3. First, add up the gross amounts shown on all your payment summaries that are JPDA income. Example 2 below has been provided to help you fill in worksheet 3.

Example 2

Peter, a labourer, was a resident of Timor-Leste for the whole year. His PAYG payment summary – foreign employment shows a gross payment of $200,000 and Australian PAYG tax withheld of $6,500. His sole source of income was from the JPDA. Peter had work-related expenses of $200.

Peter will claim $20 (that is, 10% of $200) as his work-related expenses at D5 Other work-related expenses on his tax return.

Peter’s taxable income is $19,980. His Australian tax payable is $6,493.50. Therefore, he will receive a tax refund of $6.50, that is, $6,493.50 (tax payable) minus $6,500 (tax withheld).

Peter uses worksheet 3.

End of example

Worksheet 3: assessable JPDA income for resident of Timor-Leste

 

Peter

You

Total gross JPDA income included on your payment summary

$200,000

$          

(a)

Divide (a) by 10.

$20,000

$

(b)

Include the amount at (b) at item 1 on your tax return.

Include 10% of any work-related expenses that relate to your JPDA income at items D1 to D5.

If you printed X in the D box on the schedule of additional information, go to Part 3 – Resident of another country. Otherwise, go to Check that you have ...

Part 3 – Resident of another country

Use this part if you were a resident of a country other than Australia or Timor-Leste for tax purposes during 2015–16.

What you need

You need to know

Your net income earned in the JPDA is taxed in Australia. You can claim a tax offset of 90% of Australian tax payable on that income. Your payer should have withheld 10% of the applicable Australian tax on your JPDA income

What you need to do

Show all your Australian income (including all JPDA income) and deductions as instructed by Individual tax return instructions 2016. Use worksheet 4 or worksheet 5 to calculate your tax offset.

Use worksheet 4 if the only Australian income you had was JPDA income; otherwise, use worksheet 5. If you are using worksheet 5, example 3 will assist you.

Worksheet 4: JPDA tax offset for foreign residents whose only Australian income is JPDA income

Your taxable income as shown on your tax return

$          

(a)

Calculate your tax using the rates and calculators *

$

(b)

Multiply (b) by 90.

$

(c)

Divide (c) by 100.

$

(d)

The amount at (d) is your JPDA tax offset. Include this amount at C item T8 Other non-refundable tax offsets on your tax return (supplementary section).

.

Example 3

Gavin, a chef, was a resident of Malaysia for the whole year. His Australian assessable income was $80,000, of which $70,000 was JPDA income. He paid $100 for work-related expenses related to earning his JPDA income but had no other allowable deductions. He had no other amount to show at item T8. Gavin uses worksheet 5 below to calculate his JPDA tax offset.

Gavin’s JPDA tax offset is $20,445. He transfers this amount to C item T8 on his tax return (supplementary section) and prints H in the CLAIM TYPE box at the right of C.

End of example

Worksheet 5: JPDA tax offset for foreign residents who have JPDA income and other Australian income

 

Gavin

You

Your taxable income as shown on your tax return

$79,900

           

(a)

Calculate your tax using the rates and calculators.

$25,968

 

(b)

Divide (b) by (a) (round to at least 3 decimal places).

0.325

 

(c)

Net JPDA income (after any allowable deductions relating to JPDA income)

$69,900

 

(d)

Multiply (c) by (d).

$22,717.50

 

(e)

Multiply (e) by 90.

$2,044575.00

 

(f)

Divide (f) by 100.

$20,445.75

 

(g)

The amount at (g) is your JPDA offset. Include this amount at C item T8 Other non-refundable tax offsets on your tax return (supplementary section).

.

QC48240