Why Declaring Income from Foreign Sources is Essential?

Toongabbie accountants

Once you step on the taxpayer bandwagon, there’s no turning back. So, when you file a return, you should declare any and all forms of income you earned from all sources. This is important because ATO can track all your income and compare it with what you declared. And any amount of undeclared income can attract a penalty depending on the scenario.

This doesn’t exclude any source of income, including the foreign ones even if you are paying taxes in the source country. But do you know? You might be eligible for some exemption on your liabilities based on how much foreign taxes are you paying.

The Need for Declaring Foreign Income

So, if you are earning income from a foreign source, you may or may not be taxed based on the value. When the income isn’t taxed, you need to pay applicable taxes in your home country. But if you are paying a certain amount of tax in a foreign country, you can claim an equivalent deduction depending on your taxation slab in Australia.

All you need to do is check with your tax agent and see if the taxes you paid in foreign are eligible for deduction. Moreover, when declaring a foreign income, you should provide a value in your home country’s currency.

While this process can become cumbersome and difficult at times, you can always consult professional accountants in Toongabbie for the best advice. Alternatively, you can also consult the office of the ATO directly for more clarification about the rules, taxes, and other details.