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Income Tax

Non-cash receipts

The following non-cash receipts are assessable:

  • Barter transactions

  • Non-cash business benefits

  • Non-cash fringe benefits to employees (subject to Fringe Benefits Tax)

Franked Dividends

Franking Credit

Franked dividend amount x 30/70

Tax Payable

A Franking tax offset is allowed equal to the Franking credit

Tax treatment of foreign income
  • The net amount of assessable foreign income is grossed-up by the amount of foreign tax paid on that income by the taxpayer and is included as part of assessable income

  • To avoid double taxation, a credit is allowed for the foreign tax paid

Assessable Income

Factors determining assessability
  • Residency

  • Source of income

  • Derivation

  • Capital vs. Income receipts

  • Exempt status

Residency

A resident Australian taxpayer is a person:
  • whose permanent home is in Australia,

  • who has continuously or intermittently been in Australia for more than half of the income year, unless their usual home is outside Australia – s.6(1)

Resident Australian taxpayers are assessed on income derived in Australia and overseas

Non-resident taxpayers are assessed only on income derived within Australia

Income from Property
  • Interest

  • Rental income

  • Royalties

  • Dividends
Foreign tax credit

A foreign tax credit is the lesser of:

Foreign tax paid on foreign income,
or
Australian tax payable on foreign income