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OE 18: When person stops being BETA person
or “How to end your status as a BETA person and close your branch equivalent tax account”
You could also call this:

“How BETA individuals can claim tax credits for overseas income”

If you’re a BETA person, you can get a branch equivalent tax credit for an income year. This credit is based on a calculation that takes into account your tax liability, your attributed CFC income or taxable income (whichever is less), and any foreign tax credits you’ve received.

To work out your credit, you use a formula. This formula considers your income tax liability for the year, the smaller amount between your attributed CFC income and your taxable income, and any foreign tax credits you’ve been allowed under sections LK 1 to LK 7.

The amount you get from this calculation is your branch equivalent tax credit. This credit is listed in a table called ‘person’s branch equivalent tax credits’ under the row ‘payment of income tax on foreign income’.

You get this credit on the day you file your tax return for the year the income relates to.

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Next up: OE 20: BETA person’s payment of income tax

or “Using branch equivalent tax credits to pay income tax on foreign dividends”
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Part O Memorandum accounts
Branch equivalent tax accounts (BETA): Branch equivalent tax credits

OE 19BETA person’s payment of income tax on foreign income

  1. A BETA person has a branch equivalent tax credit for an income year for an amount calculated using the formula—

    (tax liability × CFC or taxable income ÷ taxable income) − foreign tax credits.

    Where:

    • In the formula,—

    • tax liability is the person’s income tax liability for the income year:
      1. CFC or taxable income is the lesser of the person’s—
        1. attributed CFC income derived during the income year; or
          1. taxable income for the income year:
          2. taxable income is the person’s taxable income for the income year:
            1. foreign tax credits is the foreign tax credits allowed for the income year under sections LK 1 to LK 7 (which relate to tax credits relating to attributed CFC income).

              1. The branch equivalent tax credit in subsection (1) is referred to in table O9: person’s branch equivalent tax credits, row 2 (payment of income tax on foreign income).

              2. The credit date is the day the person files the return of income for the tax year corresponding to the income year.

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              Notes
              • Section OE 19 list of defined terms foreign tax: repealed, on , by section 218(a) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
              • Section OE 19 list of defined terms tax credit: inserted, on , by section 218(b) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).