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Adam.B(Newbie)Newbie
3 Oct 2023

Dear community,


I am preparing my 2022/23 financial year, of which I only lived in Australia for 3 full months. I have ensured to state that I was only a resident for the specific dates in the year. In these months, I made 23k as a sole trader (I believe PSI rules apply to me). For the other 9 months of the financial year, I lived and worked in Germany where I paid tax on that income already. I know there is a tax agreement between Australia and Germany, meaning I should not have to pay tax to Australia for the income I made in Germany.


However, when I go to submit my tax form, the estimated tax they calculate is 20k, as it is estimating the tax that I should pay for my entire 12 months of employment (foreign income earned + Sole Trader activities in Aus)

Therefore, how/where do I check in this form that I am only attempting to pay tax on the 23k made in these 3 months while a resident in Oz for tax purposes, and to prevent paying tax on my entire year income from overseas?


Any help is greatly appreciated!

Adam

1,580 views
1 replies
1,580 views
1 replies

Most helpful response

Most helpful reply

AnitaATO(Community Support)Community Support
4 Oct 2023

Hey @Adam.B,


As you've paid tax already on your foreign income in Germany you may be entitled to claim an Australian foreign income tax offset. Which provides relief from paying double tax.


To be eligible to claim the foreign income tax offset you:


  • you must have actually paid, or be deemed to have paid, an amount of foreign income tax,
  • the income or gain on which you paid foreign income tax must be included in your assessable income


If you're claiming an offset of under $1000 you only need to record the actual amount of foreign tax paid up until this amount. If it's above $1000 you'll need to work out your foreign tax offset limit that you can claim.



All replies

Most helpful reply

AnitaATO(Community Support)Community Support
4 Oct 2023

Hey @Adam.B,


As you've paid tax already on your foreign income in Germany you may be entitled to claim an Australian foreign income tax offset. Which provides relief from paying double tax.


To be eligible to claim the foreign income tax offset you:


  • you must have actually paid, or be deemed to have paid, an amount of foreign income tax,
  • the income or gain on which you paid foreign income tax must be included in your assessable income


If you're claiming an offset of under $1000 you only need to record the actual amount of foreign tax paid up until this amount. If it's above $1000 you'll need to work out your foreign tax offset limit that you can claim.



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