Private ruling: Foreign income tax offset
Date of advice: 2 April 2026
Published: 15 June 2026
Ruling period: Period ended DD MM YY | Period ended DD MM YY | Period ended DD MM YY | Period ended DD MM YY | Period ended DD MM YY | Period ending DD MM YY
Date scheme commenced: DD MM YY

Ruling: Q1: Can you claim a foreign income tax offset (FITO) for the Cess type A you pay in your income tax return for Country A? | A1: The XXXX is a tax of the federal government of Country A and Article X of the Double Taxation Agreement (DTA) between Australia and Country A details that tax paid under the law of Country A and in accordance with the DTA shall be allowed as a credit against Australian tax payable in respect of any income derived by a resident of Australia from sources in Country A.

Relevant facts and circumstances: You are an Australian citizen and resident for tax purposes. You are also a resident of Country A and have been filing tax returns there since the YY income year. The tax year for Country A starts on DD MM of each year and ends on DD MM. You have been reporting your income earned in Country A in your Australian tax return and have been claiming the FITO for tax you have paid in Country A on this income. As part of your tax return for Country A pay a XXXX. Details on the this include: • It is calculated at a rate of X% • It is calculated on the tax payable or tax amount and not on the total income • It is applicable to all taxpayers of Country A • It generates specific revenue for; ­ Funding and strengthening public healthcare systems, ­ Improving quality, access, and infrastructure in primary, secondary, and higher education, ­ Support for government welfare initiatives in the health and education sectors. Your tax agent from Country A advised in an email forwarded to the ATO on DD MM YY that "A XXXX is distinct from general tax revenue in the sense that it is collected for a specific purpose and is intended to be utilised for that sector." You have not currently included the relevant tax in your annual FITO claim.

Relevant legislative provisions: Income Tax Assessment Act 1997 subsection 770 | International Tax Agreements Act 1953