Draft Taxation Determination
TD 92/D186
Income tax: does the calculation of Provisional Tax include exempt foreign source income?
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Please note that the PDF version is the authorised version of this draft ruling.This document has been finalised by TD 93/30.
FOI status:
draft only - for commentPreamble
| Draft Taxation Determinations (TDs) represent the preliminary, though considered, views of the ATO. Draft TDs may not be relied on; only final TDs are authoritative statements of the ATO. |
1. Yes. Section 221YCAA of the Income Tax Assessment Act defines what is to be excluded from the calculation of Provisional Tax. Exempt foreign source income is not included in that list, and therefore should be taken into account when calculating Provisional Tax.
2. The amount of tax (if any) payable on other income where there is also exempt foreign income from approved overseas projects and overseas employment is set out in section 23AF and section 23AG. Provisional Tax is calculated by applying the formula in subsection 23AF(17A) and subsection 23AG(3) to the uplifted provisional tax amount.
Example:
| A taxpayer's 1992 income consists of the following: | $ |
| Interest | 10 000 |
| Exempt foreign employment income | 25 000 |
| Notional Gross Taxable Income | 35 000 |
| Notional Gross Taxable Income uplifted by 8% [for 1992/93] | 37 800 |
| Notional Gross Tax | 9 702.00 |
| Average rate of tax 9 702.00/37 800 | 0.256666 |
| Therefore, Provisional Tax is calculated as follows: | |
| [$10 000 + 8%] x 0.256666 | 2 771.99 |
| Medicare [$10 800 x 1.25%] | 135.00 |
| Total | 2 906.99 |
| PROVISIONAL TAX | 2 907.00 |
Commissioner of Taxation
29/10/92
References
ATO references:
NO NEW TD13
Subject References:
provisional tax
foreign source income
calculation
Legislative References:
ITAA 23AF
ITAA 23AG
ITAA 221YA
ITAA 221YCAA