If you’ve already paid foreign tax on that income, Australia allows you to claim a Foreign Income Tax Offset (FITO) so that you don’t get double-taxed.

LodgeiT doesn't calculate FITO. The user should calculate FITO limit manually Via Worksheet

Foreign income tax offset is the sum of Foreign tax paid amounts from worksheets from Foreign section. User can enter it there and they will be shown up in 20O field.

Via 20 O

ATO Reference

LodgeiT only follows the design/rule of ATO's: 


Common Mistakes to Avoid

  • Claiming FITO on income that’s exempt in Australia.
  • Using the wrong exchange rate.
  • Not declaring the foreign income in the first place.
  • Claiming FITO on amounts that were refunded or credited back overseas.


Notes:

  • The offset reduces the Australian tax payable on that same income.
  • Usually the FITO is offset against the Tax Payable until exhausted. FITO is also non-refundable.