Overseas Debtors Repayment Guidelines 2017

The central legal concepts created or clarified by the Guidelines are foreign‑sourced income, three mutually exclusive calculation methods, the translation rule for foreign currency, and the minimum content of statutory notices required by the Act.

Foreign‑sourced income. The Guidelines operate to produce a single numerical foreign‑sourced income figure for an income year, which the Guidelines explicitly link to the Act’s requirement to work out a person’s assessed worldwide income under section 154‑17 of the Act (s 5). The instrument does not redefine “foreign‑sourced income” beyond providing methods for its computation; it relies on the Act and the Income Tax Assessment Act 1997 for other defined expressions (s 4(2)).

Three methods for calculation. Section 6 names and constrains the options:

• Simple self‑assessment method (s 7). This computes foreign‑sourced income as total income for the income year that is not Australian‑sourced ordinary or statutory income, less a standard deduction. The standard deduction itself depends on whether the person’s occupation is listed in the ATO Occupation Code. If it is listed, the deduction is the median ratio of work‑related expenses to employment‑related income that the ATO calculated for that occupation; if not, the deduction is nil (s 7(1) and (2)).

• Overseas assessed method (s 8). This method uses a person’s most recent foreign taxation authority assessment of the person’s income for a 12 month period, provided that assessment overlaps the income year and is not one of multiple overlapping 12 month assessments from different foreign authorities, and provided it has not already been used for another income year (s 8(1) and (2)).

• Comprehensive tax‑based assessment method (s 9). This treats foreign‑sourced income as total foreign income for the year less the total deductions that would be allowable under Australian income tax law if the foreign income were assessable income. The Guidelines refer expressly to the income tax law for the deductibility rules (s 9).

Choice and default. The person must state the chosen method in the notice required under subsection 154‑18(3) of the Act (s 6(2)). If they do not choose, the simple self‑assessment method may be used (s 6(3)). The person may not choose more than one method for the same income year (s 6(4)).

Currency translation. Section 10 prescribes that amounts in foreign currencies are to be translated to Australian currency using the average exchange rate for the financial year most closely corresponding to the income year for the purposes of subsection 154‑17(2) of the Act.

Notices. Part 3 sets minimum mandatory content for notices under section 154‑18 of the Act:

• Leaving Australia (s 12): name, date of birth, and, to the extent known, intended country of residence and contact details including email and telephone.

• Absence from Australia (s 13): name, date of birth, country of residence and, to the extent known, contact details.

• Income notices (s 14): name, date of birth, country of residence, occupation, amount of income (including foreign‑sourced income), method used to calculate foreign‑sourced income, and, if the overseas assessed method was used, the tax‑identification number used for foreign tax purposes. Paragraphs (d) to (g) do not apply if the person’s income does not exceed 25% of the minimum repayment income for the income year and the notice includes a declaration to that effect (s 14(2)).

Interaction with Commissioner powers. The Guidelines expressly preserve the Commissioner’s ability to require additional content in an approved form under the Taxation Administration Act 1953 (s 15). The Guidelines do not modify penalty or enforcement clauses from the Act.

Definitions and external linkage. The instrument defines ATO Occupation Code as the Salary and wage occupation codes 2018 published by the ATO in June 2018 (s 4). It also notes that expressions used in the instrument which also appear in the Income Tax Assessment Act 1997 have the same meaning as in that Act (s 4(2)). The instrument therefore ties its operational meaning to external materials and to primary taxation law for the treatment of deductions and related concepts.

Primary affected persons are those whose assessed worldwide income under the Act depends on foreign‑sourced income and who are required to give notices under section 154‑18 of the Act. The Guidelines themselves identify three overlapping categories of people for notice and calculation purposes: persons leaving Australia (s 12), persons outside Australia (s 13), and persons required to report income for an income year (s 14). The instrument is framed for “a person” rather than a specific class such as students, but its statutory source , the Higher Education Support Act 2003 , connects the calculation to repayment obligations under that Act; the Guidelines themselves state that foreign‑sourced income is relevant to calculating assessed worldwide income for section 154‑17 of the Act (s 5).

Who pays. The Guidelines affect individuals who must provide notices tied to the Act and whose repayment liabilities under the Act are calculated using assessed worldwide income. The instrument imposes procedural obligations on those persons to provide specific information in notices. It also affects persons by constraining how their foreign income will be numerically computed for the purposes of the Act, which in turn affects any Act‑based repayment liabilities or thresholds linked to assessed worldwide income.

Who decides. The person liable under the Act chooses the applicable foreign‑sourced income calculation method and gives a notice stating that choice (s 6(2)). The Commissioner retains procedural authority to require additional content in approved forms under the Taxation Administration Act 1953 (s 15). Decisions by foreign taxation authorities also affect the computation where the overseas assessed method is chosen because that method depends on the foreign taxation authority’s most recent 12 month assessment (s 8(1)). The ATO’s occupation codes data is an external input where the simple self‑assessment method is used (s 7(2)).

Affected intermediaries and institutions. Tax agents, accountants and advisers who assist persons with notices, income gathering and calculations will be affected by the mechanics the Guidelines prescribe. In particular:

• Advisers who calculate foreign‑sourced income must know how to apply either the simple self‑assessment ratios (s 7), interpret foreign taxation assessments (s 8) or map deductible items under Australian income tax law to foreign income (s 9).

• Administrators and IT systems at the Commissioner’s office must accept and process notices containing the specified fields, implement the currency translation rule (s 10), and track which foreign assessments have been used (s 8(2)(c)).

Geography and time. The Guidelines explicitly apply for the 2016‑17 income year and later years (s 5). The overseas assessed method places a temporal condition on the foreign assessment used , it must be the most recent 12 month assessment and that period must overlap the income year (s 8(1) and (2)(a)).

Scope limitations. The Guidelines do not create new categories of debtors or new repayment liabilities. They operate to implement computation and notice rules tied to the Act. They do not set penalty levels or procedural enforcement mechanisms; those remain matters of the Act and other legislation, not this instrument (see s 3, s 15 and the absence of penalty clauses within the Guidelines).

Duties imposed by the Guidelines are largely procedural and computational. They specify what information must be provided in statutory notices and how foreign‑sourced income must be calculated when selected methods are used.

Duty to choose and state a method. A person must choose one of the three methods for calculating foreign‑sourced income and state that choice in the notice given under subsection 154‑18(3) of the Act (s 6(2)). If the person fails to choose, the simple self‑assessment method may be used (s 6(3)). The person cannot choose more than one method for the same income year (s 6(4)).

Duty to provide specified notice content. Notices under subsection 154‑18(1) (leaving Australia) must include name, date of birth and, to the extent known, intended country of residence and contact details (s 12(1)). A person who previously gave a leaving notice and has not been an Australian resident since that notice does not have to give another leaving notice (s 12(2)). Notices under subsection 154‑18(2) (absence from Australia) must include name, date of birth, country of residence and, where known, contact details (s 13). Notices under subsection 154‑18(3) (income notices) must include name, date of birth, country of residence, occupation, the amount of income including foreign‑sourced income, the method used to calculate foreign‑sourced income, and, if the overseas assessed method was used, the tax identification number used in the foreign assessment (s 14(1)). Paragraphs (d) to (g) of s 14(1) do not apply where a person’s income does not exceed 25% of the minimum repayment income and the notice includes a declaration to that effect (s 14(2)).

Duty to translate foreign currency in a specified way. For the purposes of subsection 154‑17(2) of the Act, foreign currency amounts are to be converted to Australian dollars at the average exchange rate for the financial year most closely corresponding to the income year (s 10). This is a mandatory computational rule for converting foreign currency amounts that feed into the Act’s assessed worldwide income computation.

Duties tied to external sources. The simple self‑assessment method requires reference to the ATO Occupation Code (s 7(2)). The overseas assessed method requires the person to produce or identify the relevant foreign tax assessment (s 8(1)). The comprehensive tax‑based assessment method requires computation of deductions that would be allowable under Australian income tax law (s 9).

Rights and discretions. The Guidelines preserve existing discretions and procedural rights:

• Choice right. The person has a statutory right to choose which method will be used for an income year and to state that choice in the relevant notice (s 6(2)). This is a substantive right insofar as the method chosen affects the numerical result used under the Act.

• Exception right. A person with low income relative to the minimum repayment income can provide a simplified income notice and a declaration instead of full occupation and deduction details (s 14(2)). A person who previously gave a leaving notice and has not been an Australian resident since does not have to give a further leaving notice (s 12(2)).

• Administrative power reserved to the Commissioner. The Commissioner may require additional content in the approved form under s 388‑50 of the Taxation Administration Act 1953; the Guidelines do not limit that power (s 15). This means the Commissioner can augment the minimum notice content set by the Guidelines.

Limits on the use of foreign assessments. The overseas assessed method contains limits: the assessment must be the most recent 12 month assessment by a foreign taxation authority and must overlap the income year (s 8(1) and (2)(a)); multiple overlapping 12 month assessments from different foreign authorities disqualify the method (s 8(2)(b)); and an assessment already used for a previous income year cannot be reused (s 8(2)(c)). These limits constrain how persons may rely on foreign tax authority data.

Procedural interplay with the Act. The Guidelines are procedural and computational; the legal consequences of a notice, and the consequences of non‑compliance with notice obligations, are governed by the Act. The Guidelines therefore function within the Act’s compliance and enforcement framework rather than creating independent sanctioning mechanisms.

The Guidelines do not themselves prescribe penalties. The instrument is made under the Higher Education Support Act 2003 (s 3) and repeatedly references provisions of that Act to which its computations and notice requirements are tied (for example s 154‑17 and s 154‑18 referenced in notes and the text). Enforcement, sanctions for failure to give notices, and the legal consequences of inaccurate or late notices are matters for the Act and for any other applicable laws; the Guidelines regulate only how foreign‑sourced income is to be calculated and what minimum content must appear in notices.

Commissioner’s forms and additional content. Section 15 explicitly preserves the Commissioner’s power under section 388‑50 in Schedule 1 to the Taxation Administration Act 1953 to require additional content in approved forms of notices under section 154‑18 of the Act. That power can be used to request further data beyond the minimum fields in the Guidelines. The availability of this power indicates administrative channels for handling perceived deficiencies or ambiguities in notices, but the instrument itself does not set enforcement steps or punishments.

Operational enforcement risks. Because the Guidelines set computational methods and minimum notice fields but do not set penalties, practical enforcement will rely on provisions in the Act and on the Commissioner’s administrative processes. The Guidelines create clear rules that the Commissioner can test notices against: whether a person stated a method in the income notice (s 6(2)), whether a foreign assessment used under the overseas assessed method satisfies the overlap and uniqueness requirements (s 8(2)), whether occupation information or the declared low‑income exception is properly included (s 14 and s 14(2)), and whether foreign currency was translated using the prescribed average exchange rate (s 10). Non‑conformance with any of these rules will be handled under the Act’s enforcement framework, not by this instrument.

Record‑keeping and evidentiary consequences. The Guidelines implicitly require supporting documentary evidence for certain methods. For example, using the overseas assessed method requires reliance on a foreign taxation authority’s most recent 12 month assessment (s 8(1)). The comprehensive tax‑based assessment method requires the person to compute deductions as if the foreign income were assessable under Australian income tax law (s 9). If the Commissioner exercises compliance review powers under the Act, the person will need to produce documentary support for the chosen method and the computations performed. The Guidelines therefore create predictable evidentiary points for administrative review.

No express appeal or review provisions in the Guidelines. The instrument does not set out appeal rights or internal review procedures specific to determinations derived from these computation methods. Any challenge to a Commissioner’s decision or to an assessment that uses these Guidelines will be governed by the objection and appeal mechanisms in the Act and by the general administrative law framework.

The Guidelines are explicitly subordinate to and integrated with the Higher Education Support Act 2003. They are made under that Act (s 3) and repeatedly reference parts of the Act that they implement. Section 5 declares the Guidelines’ purpose as setting out how to work out foreign‑sourced income for 2016‑17 and later years and notes that foreign‑sourced income is relevant to a person’s assessed worldwide income for section 154‑17 of the Act. Many of the Guidelines’ procedural obligations are framed as the content required in notices mandated by section 154‑18 of the Act (Parts 3, ss 11-15).

Links to income tax law. The Guidelines rely on the Income Tax Assessment Act 1997 for the meaning of expressions that appear in both instruments (s 4(2)). The comprehensive tax‑based assessment method (s 9) requires that total deductions be those that would be allowable under the income tax law if the foreign income were assessable income. That cross‑reference brings Australian income tax deductibility rules into play when applying s 9. Practically, this means interpretations and precedents under Australian income tax law will be leveraged when assessing whether deductions claimed under s 9 would be allowable.

Interaction with ATO datasets. The simple self‑assessment method depends on the ATO Occupation Code (s 4) and, for occupations listed, on the ATO’s published median ratio of work‑related expenses to employment‑related income for that occupation (s 7(2)(a)). The Guidelines thereby rely on ATO statistical products to operationalise the standard deduction. The Guidelines specify that the ATO Occupation Code means the Salary and wage occupation codes 2018 published by the Australian Taxation Office in June 2018 (s 4). That external linkage means updates or changes to ATO products could have operational consequences , the Guidelines define the precise ATO publication to be used.

Taxation Administration Act powers. Section 15 preserves the Commissioner’s power under section 388‑50 of Schedule 1 to the Taxation Administration Act 1953 to require additional content in the approved form of a notice under section 154‑18 of the Act. That provision creates a legal channel for the Commissioner to require more detail than the Guidelines’ minimum fields. It also interfaces with the Commissioner’s broader compliance powers under taxation administration laws.

Foreign taxation authorities. The overseas assessed method (s 8) directly incorporates assessments from foreign taxation authorities. It therefore interacts, operationally, with the administrative practice and document formats of those foreign authorities. The Guidelines impose constraints on which foreign assessments can be used , the most recent 12 month assessment overlapping the income year and not previously used for a prior income year (s 8(1) and (2)). If a person has multiple foreign assessments from different countries for overlapping 12 month periods, the overseas assessed method cannot be used (s 8(2)(b)). That rule creates an interaction point where foreign temporal tax reporting regimes may or may not align with Australian income years.

Higher Education Support Act thresholds. The Guidelines explicitly reference the minimum repayment income concept under section 154‑10 of the Act in s 14(2). That provision creates an interaction: where a person’s income for the income year does not exceed 25% of the minimum repayment income for that year, the income notice can be simplified and need not include occupation, income method and foreign tax identification number if the person includes a declaration (s 14(2)). Thus, the Guidelines operate in tandem with the Act’s income thresholds and repayment constructs.

Legislative hierarchy and amendment interplay. The Guidelines are a legislative instrument made under the Act and therefore operate inside the Act’s regulatory architecture. The endnotes show that the instrument has been amended (see the 2018 instrument F2018L00949), which modifies definitions and certain parts of s 7 (endnotes and amendment history). Changes to the Act, to the Income Tax Assessment Act 1997, to ATO publications used as inputs, and to the Taxation Administration Act 1953 powers of the Commissioner can all change the practical meaning or the implementation of these Guidelines.

The compilation material in the instrument includes endnotes that record the instrument’s legislative history and amendments. The Guidelines were first registered as the Overseas Debtors Repayment Guidelines 2017 on 24 February 2017 and commenced on 25 February 2017, according to the legislation history recorded in the endnotes (Endnote 3). A subsequent instrument, the Higher Education (Overseas Debtor Repayment) Amendment and Repeal Instrument 2018 (F2018L00949), was registered on 29 June 2018 and commenced on 1 July 2018 (Endnote 3).

The endnote “Amendment history” (Endnote 4) records that the 2018 instrument amended the definitions at r. 4 and parts of the provisions in r. 7, specifically r. 7(1)(b) and r. 7(2), where “r” denotes regulation or rule numbering from an earlier format. The summary in the endnotes indicates the 2018 amendment added or redefined certain provisions (notated as “ad def F2018L00949”). The compilation date of the version provided is 1 July 2018, and the text presented is the instrument as amended and in force on that date (Compilation No. 1, compilation date sited on the cover).

Practical effect of recorded amendments. The amendment history indicates the instrument’s definition of the “ATO Occupation Code” and the operation of the standard deduction under the simple self‑assessment method have been subject to amendment. The text as compiled shows the ATO Occupation Code is defined in s 4 and s 7(2) sets out the standard deduction rule relying on that code: if the occupation has an occupation code listed in the ATO Occupation Code, the standard deduction is the median ratio of work‑related expenses to employment‑related income calculated by the ATO for that occupation; otherwise it is nil (s 7(2)). The endnote indicates those provisions were specifically targeted by the 2018 instrument.

Uncommenced amendments and modification note. The compilation notes highlight that uncommenced amendments are not shown in the compiled text and that the endnotes include details of amending laws up to the compilation date (the compilation note near the beginning and Endnote 1). The instrument also notes that modifications by other laws can affect its operation but are not shown in the text of the compiled law (compilation note). Users must therefore check the Legislation Register or the series page for any later amendments or uncommenced changes beyond the compilation date.

Summary. The Guidelines were made in February 2017 and were amended by a consequential instrument registered in June 2018 that took effect 1 July 2018. The amendment history recorded in the endnotes identifies definitional and s 7 changes as the subjects of the 2018 amendment. For current application, practitioners must refer to the in‑force text and check whether further amendments have been made after the compilation date.

The compilation provided does not include any cases or litigation history. The Guidelines themselves do not cite any judicial decisions, nor do the endnotes supply any litigation annotations. The instrument is a legislative guideline and its text, notes and endnotes focus on commencement, amendment history and definitions rather than judicial interpretation.

Implication for practitioners. Because there is no litigation history set out in the compiled instrument, there are no judicially established interpretations of the specific provisions of these Guidelines recorded here that can be cited. Where legal disputes arise in practice about the application of these Guidelines , for example, the proper construction of the overlap requirement in the overseas assessed method (s 8(2)(a)), or the correct application of the ATO Occupation Code median ratios (s 7(2)) , practitioners will need to rely on the Act’s dispute resolution and objection mechanisms, and on general administrative law principles, until (and if) judicial decisions develop interpreting these provisions.

Sources to consult if litigation arises. If litigation or administrative review occurs, the relevant sources for argument will include:

• The Higher Education Support Act 2003 provisions to which these Guidelines are subordinate, particularly s 154‑17 and s 154‑18 referenced in the Guidelines.

• Income Tax Assessment Act 1997 interpretations for any issues arising under the comprehensive tax‑based assessment method (s 9), since the Guidelines adopt the tax law’s meanings where expressions overlap (s 4(2)).

• The Taxation Administration Act 1953 where s 388‑50 powers are invoked by the Commissioner to require additional form content (s 15).

• Any ATO publications used as inputs, notably the Salary and wage occupation codes 2018 for the ATO Occupation Code (s 4 and s 7(2)).

Absence of precedents in the instrument. The lack of litigation history in the Guidelines places higher emphasis on careful compliance documentation and on administrative engagement with the Commissioner where ambiguities are foreseeable. The Guidelines’ clear procedural rules (e.g. the necessity to state a method and the restrictions on reuse of foreign assessments in s 8(2)(c)) create discrete issues that could be litigated, but the instrument itself contains no record of adjudication.

The Guidelines are compact but contain several operational and legal traps for the unwary. Practitioners should note the following specific points drawn from the text.

Choice matters and defaults bite. The person must choose a method in the notice under subsection 154‑18(3) of the Act (s 6(2)). If the person fails to choose, the simple self‑assessment method may be used as a default (s 6(3)). The default could materially change the computed foreign‑sourced income, because the three methods use different approaches to deductions and evidentiary bases (ss 7-9). A failure to state a method therefore has a predictable computational consequence.

Cannot pick multiple methods. A person cannot choose more than one method for the same income year (s 6(4)). If a person attempts to mix elements of two methods when preparing an income notice, the Commissioner could reject that approach on the basis the Guidelines only permit one method.

ATO Occupation Code dependency. The simple self‑assessment method’s “standard deduction” depends on the occupation being listed in the ATO Occupation Code (s 7(2)). The instrument defines the ATO Occupation Code as the Salary and wage occupation codes 2018 published by the ATO in June 2018 (s 4). If an occupation is not listed in that ATO publication, the standard deduction is nil (s 7(2)(b)). Practitioners must therefore verify whether the occupation appears in that external ATO product before relying on any standard deduction. The Guidelines tie the deduction to a specific publication and date; subsequent ATO updates are not referenced in the text as the defined ATO Occupation Code.

Overseas assessed method has strict temporal and uniqueness constraints. The overseas assessed method uses the most recent assessment of income by a foreign taxation authority for a period of 12 months (s 8(1)). But s 8(2) disqualifies the method if the assessment period does not overlap the income year (s 8(2)(a)), if multiple foreign authorities have overlapping 12 month assessments that overlap the income year (s 8(2)(b)), or if that assessment has already been used to compute foreign‑sourced income for a previous income year (s 8(2)(c)). These constraints create a need to check foreign assessments carefully for periods and prior use before electing s 8.

Currency translation uses a particular average rate. Section 10 prescribes using the average exchange rate for the financial year most closely corresponding to the income year. Practitioners must be clear which average exchange rate series is intended and must document the source and calculation because choice of a different average rate (for example a calendar‑year average or a daily spot rate aggregation) would not follow the Guidelines.

Low‑income declaration option requires an express declaration. The income‑notice simplification in s 14(2) is available only if the person’s income for the income year does not exceed 25% of the minimum repayment income for the income year and the notice includes a declaration to that effect. The instrument cross‑references the Act’s definition of minimum repayment income (s 14(2) referencing s 154‑10 of the Act). Practitioners should not assume the simplified route is available without confirming the 25% threshold numerically and including the required declaration.

Documentary evidence and reuse prohibition. The overseas assessed method depends on an identifiable foreign tax assessment and, importantly, s 8(2)(c) prevents reuse of an assessment that has already been used for a previous income year. Practitioners must track when a foreign assessment has been relied upon so as not to contravene s 8(2)(c).

Commissioner can require more information. Section 15 preserves the Commissioner’s power under the Taxation Administration Act 1953 to require additional content in approved forms. The Guidelines set minimum fields, but they do not cap the Commissioner’s information‑requesting power. Prepare for further data requests.

Interaction with income tax deductibility rules. The comprehensive tax‑based assessment method requires using the deductions that would be allowable under Australian income tax law if the foreign income were assessable income (s 9). This requires mapping foreign income and expenses to Australian deductibility rules, which may be conceptually and evidentially challenging for certain cross‑border income types.

Timing mismatches between foreign tax periods and Australian income years. The overseas assessed method needs a 12 month foreign assessment that overlaps with the income year (s 8(2)(a)). Foreign taxation years do not always align with Australian income years. Practitioners must confirm overlap before relying on s 8.

Precision of occupation descriptions. The simple self‑assessment method bases the standard deduction on the occupation in which the person derived the most income other than Australian‑sourced ordinary or statutory income (s 7(1)(b)). Accurate classification of occupation and the identification of which occupational income is “the most” are factual exercises that can alter the standard deduction applied.

No penalties in the Guidelines. Because the Guidelines do not themselves set penalties, practitioners must consult the Act for the enforcement consequences of failing to give notices or for inaccuracies. The absence of penalties in the Guidelines does not mean there are no consequences; those consequences are located in primary legislation.

This section sets out a practical compliance checklist and steps mapped to specific provisions of the Guidelines. Follow these steps to prepare notices and to calculate foreign‑sourced income in conformity with the instrument.

1. Identify applicability and timing (s 5, s 2)

• Confirm the income year in question is 2016‑17 or later (s 5).
• Check the instrument’s commencement and any subsequent amendments since the compilation date by consulting the Legislation Register for up‑to‑date text and any uncommenced amendments (compilation notes and endnotes).

2. Decide whether you need to give a notice under the Act (s 12-14)

• If the person is leaving Australia, prepare a notice under subsection 154‑18(1) with name, date of birth and, to the extent known, intended country of residence and contact details (s 12(1)). If the person already gave such a notice before and has not been an Australian resident since, a new leaving notice is not required (s 12(2)).
• If the person is outside Australia, prepare a notice under subsection 154‑18(2) with name, date of birth, country of residence and, to the extent known, contact details (s 13).
• If the person must report income for an income year, prepare a notice under subsection 154‑18(3) containing the fields in s 14(1). Assess whether the low‑income exception in s 14(2) applies.

3. Choose a foreign‑sourced income method and state it in the income notice (s 6(2))

• Review the three methods: simple self‑assessment (s 7), overseas assessed (s 8) and comprehensive tax‑based assessment (s 9).
• Choose the method most appropriate for your factual circumstances and state it in the subsection 154‑18(3) notice. If you do not choose, the simple self‑assessment method may be applied (s 6(3)). Do not attempt to combine methods; only one method can be chosen per income year (s 6(4)).

4. Applying the simple self‑assessment method (s 7)

• Aggregate the person’s total income for the income year that is not ordinary or statutory income with an Australian source (s 7(1)(a)).
• Determine the occupation in which the person derived the most foreign income (other than Australian‑sourced ordinary or statutory income) for the income year (s 7(1)(b)).
• Check whether that occupation has a code listed in the ATO Occupation Code as defined in s 4. The instrument specifies the ATO Occupation Code as the Salary and wage occupation codes 2018 published by the ATO in June 2018 (s 4). If it does, obtain the ATO’s median ratio of work‑related expenses to employment‑related income for that occupation and apply that ratio as the standard deduction. If the occupation is not listed, the standard deduction is nil (s 7(2)).

5. Applying the overseas assessed method (s 8)

• Obtain the most recent assessment of the person’s income by a foreign taxation authority for a 12 month period (s 8(1)).
• Verify the assessment period overlaps the income year (s 8(2)(a)), that there are not overlapping 12 month assessments by different foreign authorities that overlap the income year (s 8(2)(b)), and that the particular foreign assessment has not already been used for another income year (s 8(2)(c)).
• If these conditions are satisfied, the person’s foreign‑sourced income for the income year equals the income amount from that foreign assessment for the 12 month period (s 8(1)). Record the foreign tax identification number used in the foreign tax system and include it in the income notice as required by s 14(1)(g).

6. Applying the comprehensive tax‑based assessment method (s 9)

• Aggregate total foreign income for the income year that is not Australian‑sourced ordinary or statutory income (s 9(a) mirrors s 7(1)(a)).
• Compute the total amounts of deductions that would be allowable under Australian income tax law if that income were assessable income (s 9(b)). This requires applying Australian income tax deductibility rules from the Income Tax Assessment Act 1997; ensure you document how each deduction would meet Australian deductibility tests.
• The foreign‑sourced income is the difference between the total foreign income and the total allowable deductions under Australian law (s 9).

7. Currency translation (s 10)

• Translate foreign currency amounts into Australian dollars using the average exchange rate for the financial year most closely corresponding to the income year (s 10). Document the source of the exchange rate and the calculation used (for example, the published average from an recognised source for that financial year).

8. Preparing the income notice content (s 14)

• Ensure the income notice contains name, date of birth, country of residence, occupation, the amount of income including foreign‑sourced income, the method used to calculate that foreign‑sourced income, and, if the overseas assessed method was used, the person’s foreign tax identification number used by the relevant foreign taxation authority (s 14(1)(a)-(g)).
• If the person’s income for the income year does not exceed 25% of the minimum repayment income for the year, consider using the simplified notification route by including an explicit declaration that the income does not exceed the threshold (s 14(2)). Confirm the minimum repayment income figure under section 154‑10 of the Act before relying on this exception.

9. Record-keeping and evidentiary support

• Retain copies of foreign tax assessments, records of income and deductions, the ATO occupation code lookup and the statistical ratio used, and documentary support for the currency conversion chosen. The overseas assessed method contains a non‑reuse rule (s 8(2)(c)); maintain a record that shows when an assessment was used to compute foreign‑sourced income for an income year.
• Be prepared to provide further information if the Commissioner exercises the power in Schedule 1 to the Taxation Administration Act 1953 to require additional content in the approved form (s 15).

10. Administrative follow-up

• Anticipate that the Commissioner may request supplementary information, clarification or supporting documents under the Taxation Administration Act 1953 powers preserved in s 15.
• If disagreement arises about the Commissioner’s treatment of foreign‑sourced income, use the objection and review procedures set out in the Act and taxation administration law; the Guidelines themselves do not establish separate appeal routes.

11. Practical checks

• Confirm whether the occupation for the simple self‑assessment appears in the ATO Occupation Code defined in s 4. If not, expect no standard deduction under s 7(2)(b).
• For the overseas assessed method, double‑check date ranges and whether a given foreign assessment has been used previously (s 8(2)(a) and (c)).
• Ensure that only one method is chosen and stated for the income year (s 6(4)).

In sum, compliance requires timely and accurate notice content, careful selection and documentation of the computation method, careful handling of currency translation, and preservation of supporting documentary evidence that links the chosen method to the person’s factual circumstances. The Commissioner retains the capacity to require additional detail, so a conservative approach to record‑keeping and to providing clear, traceable computations will reduce administrative friction.