Who can claim a foreign tax credit?
If you receive foreign income that is taxable in Australia, and you paid foreign tax for which you were personally liable in respect of that income, you may be entitled to a foreign tax credit. Taxes for which credit is allowed are called creditable taxes. If you are claiming a foreign tax credit in respect of a foreign capital gain, you should include a note on your income tax return that specifies the amount of the foreign capital gain included in your net capital gain. Creditable taxes for all resident taxpayers A credit can be allowed for: • foreign tax which is similar to Australian income tax or capital gains tax • foreign withholding taxes similar to the Australian withholding taxes on interest, dividends or royalties • foreign taxes listed in Australia’s double taxation agreements. Note You are not allowed a credit for penalties, fines or interest. If you are not sure whether you can apply for a foreign tax credit, write Schedule of additional information – Question 19 on the t
