Applying a foreign income tax offset against Medicare levy, Medicare levy surcharge and flood levy
22 Nov 2012
Amendments to the law which apply for 2008-2009 and later years allow a taxpayer to apply any remainder of a foreign income tax offset (FITO) for an income year against the taxpayer’s liability to pay Medicare levy, and if any remains, to reduce any liability to pay Medicare levy surcharge for that income year. The foreign income tax offset is first applied against tax payable before it is applied to Medicare liabilities. Any remaining offset will be applied against a flood levy liability, if any.
The ATO advises that it has applied the foreign income tax offset against the Medicare levy and Medicare levy surcharge in all individual tax returns lodged or amended from July 2012. The ATO will begin a bulk amendment process in November 2012 to amend as many prior year assessments as possible. Taxpayers do not need to do anything to be included in this bulk amendment process.
For further information go here.