Home topics news News Opinion News ATO targeting foreign income: what should you do? Danette Cheung August 23, 2013 The Australian Taxation Office (ATO) is currently targeting foreign funds transfers. Individuals need to be aware of their rights and responsibilities in order to discharge their Australian tax obligations efficiently and appropriately. Foreign income includes business income, foreign employment income, pensions and annuities, bank interest, dividends, royalties, rent, capital gains and personal services income. The ATO defines foreign income as: any income earned, derived or received from sources outside Australia a periodical payment by way of gifts or allowances from a source outside Australia a periodical benefit by way of gifts or allowances from a source outside Australia Provided that this amount has neither been included in your taxable income, nor received in the form of a fringe benefit. * Types of target foreign income you need to show in your tax return include the following: regular receipts of money and gifts from relatives living overseas which are exempt from Australian tax income from foreign business interests and investments, which are exempt from Australian tax, including income received by migrants with business interests in their country of origin foreign source income received while you were a temporary resident that is exempt from Australian tax the amount of exempt foreign employment income. The most important thing to remember is that you only have 28 days to respond to an ATO information request regarding the nature and source of funds. If you don’t