Taxation Determination
TD 93/30
Income tax: does exemption with progression apply in calculating provisional tax when exempt foreign source income is involved?
This version is no longer current. Please follow this link to view the current version. |
-
Please note that the PDF version is the authorised version of this ruling.This document has changed over time. View its history.
FOI status:
may be releasedFOI number: I 1214249| This Determination, to the extent that it is capable of being a 'public ruling' in terms of Part IVAAA of the Taxation Administration Act 1953 , is a public ruling for the purposes of that Part. Taxation Ruling TR 92/1 explains when a Determination is a public ruling and how it is binding on the Commissioner. Unless otherwise stated, this Determination applies to years commencing both before and after its date of issue. However, this Determination does not apply to taxpayers to the extent that it conflicts with the terms of a settlement of a dispute agreed to before the date of issue of the Determination (see paragraphs 21 and 22 of Taxation Ruling TR 92/20). |
1. Yes. Taxpayers that have exempt foreign earnings under either section 23AF or section 23AG of the Income Tax Assessment Act 1936 (ITAA) in respect of foreign employment must have that exempt income taken into account in calculating the amount of provisional tax on any non-exempt income.
2. Paragraph 221YCAA(2)(a) of the ITAA provides that provisional tax is calculated by increasing the taxable income of the preceding year of income by the provisional tax uplift factor. Paragraph 221YCAA(2)(b) of the ITAA then provides that the Income Tax Rates Act 1986 (ITRA) as it applies to assessments in respect of the current year of income is then applied as if it had been in force and applied to assessments in respect of the preceding year of income.
3. Provisional tax is calculated by applying the formula in subsection 23AF(17A) and subsection 23AG(3) of the ITAA to the uplifted provisional tax amount.
Example:
A taxpayer's 1992 income consists of the following:
$ Salary and Wages (a) 15 000 Exempt Foreign Income (EFI) (b) 25 000 Interest (c) 10 000 Notional Gross Taxable Income 50 000 (A) Notional Gross Taxable Income uplifted by 8% [for 1992/93] 54 000.00 (B) Notional Gross Tax 17 194.00 Medicare on Notional Gross Taxable Income as uplifted 675.00 17 869.00 (C) Average rate [(C) / (B)] 0.33091 (D) [(a) + (c)] x 108% x (D) 8 934.57 Less Spouse Rebate (1992 rate with child + $33 uplift) 1 412.00 Tax payable on uplifted income (excluding EFI) 7 522.57 (E) [(a) x 108%] x (D) 5 360.74 (F) Less Spouse Rebate (as above) 1 412.00 (G) Credit for salary and wages 3 948.74 (H) Provisional Tax (E) - (H) (rounded to the nearest whole dollar) 3 574.00
Commissioner of Taxation
25/02/93
Previously issued as Draft TD92/D186
References
ATO references:
NO NEWTD13
Subject References:
provisional tax;
foreign source income;
calculation
Legislative References:
ITAA 23AF;
ITAA 23AG;
ITAA 221YA;
ITAA 221YCAA;
ITAA 221YDA
| Date: | Version: | Change: | |
| You are here | 25 February 1993 | Original ruling | |
| 1 November 2006 | Withdrawn |
Copyright notice
© Australian Taxation Office for the Commonwealth of Australia
You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).
