FITO rejected - pls help

(Enthusiast)Enthusiast

2 July 2025

hi there, we are a share trader small biz entity using ATO trading stock rules across our australian and overseas share trading/investment activities. We report all activity together in section 6 of the return. We also reported our non-Aus activity separately within the Gross & Net Foreign income section 8-G & 8-R. & we claimed a FITO in 20-J which is tax we paid on overseas dividend income.

ATO sent back the return saying that section 20-J (FITO) is wrong and should be the difference between section 8-G & 8-R.

Our gross foreign income was $335k, and we made a net foreign income loss of $-7k. The FITO we are claiming is $900.. Re-reading the ATO instructions struggling to figure out where we went wrong here.

Thanks!

0 likes

112 views

1 replies

112 views

1 replies

All replies

YellowPotato

(Taxicorn)Taxicorn

2 July 2025

Might be better to ask them to explain further.

I skimmed over the instructions for

8-G Gross Foreign Income - Gross up of foreign income (before tax paid)

8-R Net Foreign Income - Gross up of foreign income (before tax paid) minus expenses

I'm pretty sure that foreign tax paid reduces the tax liability not the assessable income, so not expense. Unless I'm misunderstanding something, in general journal entries it would be Dr Asset - Cash/Bank, Dr Asset - Foreign tax credits/paid, Cr Revenue - Foreign Income

EDIT: I think there could be something in the FITO rules to explain what went wrong. I think it would be best to see a tax agent to find out what went wrong

0 likes

FITO rejected - pls help

All replies

Featured articles

Tax tips for managing your side hustle

Tax on gifts and inheritances

How much tax should I pay on a second job? Claiming the tax-free threshold

Top liked users

Top contributors

Explore tax & super topicsExplore tax & super topics

About usAbout us