myTax 2024 Foreign income tax offset

Things to know

Complete this section if you paid foreign tax on:

• income included in your assessable income this year
• an attribution account payment you received (usually a dividend distribution) that was paid out of previously attributed income and that payment is non-assessable non-exempt income. This includes where you
  • acquired employee share scheme interests at a discount in relation to your foreign employment
  • paid tax on the discounts in the foreign country.

You may be entitled to the foreign income tax offset (FITO). FITO is a non-refundable offset.

The Guide to foreign income tax offset rules explains which foreign taxes count towards the offset. If you received a distribution statement from a managed fund that reports a ‘Foreign tax offset applicable to discountable capital gains’ you will need to apportion that amount.

You need to read the Guide to foreign income tax offset rules, if:

• the total amount of foreign tax you paid during 2023–24 exceeds $1,000
• you have paid foreign tax on an attribution account payment you received (usually a dividend distribution) that was paid out of previously attributed income and that payment is non-assessable non-exempt income
• the amount of foreign tax you have paid relates to an amount that differs from the amount included in your assessable income. For example, where you have both capital losses and foreign capital gains, the net capital gain included in your assessable income will be less than the foreign capital gain on which you paid foreign tax.

For Australian resident individuals with Joint Petroleum Development Area (JPDA) income, the FITO for an employee is the lesser of:

• Australian tax payable on the net assessable JPDA income (JPDA income less allowable deductions relating to that income)
• Timor-Leste tax paid on JPDA employment income.

The FITO limit doesn't apply to this income.

Completing this section

All foreign tax paid must be converted to Australian dollars before you enter your amounts into your tax return. You can use the Foreign income conversion calculatorThis link opens in a new window.

At Personalise return, you don’t need to make a selection to show foreign income tax offset. It's always shown at Prepare return when you have shown an amount at foreign tax paid in the following sections:

• Income statements and payment summaries
• Managed fund and trust distributions
• Foreign income, assets and entities
• Other income

To show your foreign income tax offset, at Prepare return select 'Add/Edit' at the Offsets banner.

At the Foreign income tax offset heading:

1. Does the total amount of the foreign tax you paid during 2023–24 exceed $1,000?
   • No – go to step 2.
   • Yes – go to step 3.
2. When the total amount of the foreign tax you paid during 2023–24 does not exceed $1,000, the amount of foreign tax you paid is automatically completed at Offset amount in the Offsets section. Go to step 4.
3. When the total amount of the foreign tax you paid during 2023–24 exceeds $1,000, you need to work out and enter at Offset amount the foreign income tax offset amount that you are entitled to claim. To work out the amount, see Guide to foreign income tax offset rules.
   Alternatively, you can simply enter a tax offset amount of $1,000 at Offset amount. However, if you claim only $1,000 for 2023–24, you will not be able to claim the rest of your 2023–24 foreign tax in a future income year.
4. Select Save and continue when you have completed the Offsets section.

Note: If you paid foreign tax on exempt foreign employment income and included the amount in your tax return at the Foreign employment section, your foreign income tax offset amount may be different on your notice of assessment. We may calculate your foreign income tax offset amount in this circumstance.