foreign tax credit

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Foreign tax credit

Home country credit against domestic income tax. Received in return for foreign taxes paid on foreign derived earnings.
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Foreign Tax Credit

A direct, dollar-for-dollar reduction in one's U.S. tax liability because of taxes levied by a foreign government. The United States is one of the only countries that taxes income that citizens earn abroad. However, the foreign tax credit exempts income paid as taxes to foreign governments, eliminating the possibility of double taxation.
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foreign tax credit

The reduction in a U.S. tax liability because of taxes accrued or paid to a foreign government during the same taxable year.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
The IRS issued proposed regulations on foreign tax credits for businesses and individuals.
Most tax professionals are aware of the limitations imposed on the utilization of foreign tax credits under Sec.
Winston-Salem, NC-based BB&T Corporation (NYSE: BBT) has responded to a ruling by the US Court of Federal Claims regarding the Internal Revenue Service's disallowance of tax deductions and foreign tax credits in connection with a financing transaction by BB&T in 2002.
tax return claimed $50 billion in foreign tax credits, an all-time high for this credit and increase of over $7.5 billion from Tax Year 2002.
The purpose of this FTCL is to prevent foreign tax credits from reducing U.S.
The current foreign tax credit rules often result in double taxation and leave many taxpayers with excess foreign tax credits.
The notice provides guidance on the application of the new look-through rules and the transition from the previous treatment The transition issues addressed include the carryover and carry-back of excess foreign tax credits and the treatment of separate limitation losses and overall foreign losses.
Regular columns cover: anti-deferral and anti-tax avoidance; cross-border business combinations; financing international operations; foreign investment into the U.S.; foreign tax credits; partnerships, joint ventures and hybrids; transfer pricing; and, technology and telecommunications.
In January and March of 1998 the IRS issued temporary regulations (TD 8751 and 8766) changing the SRLY provisions for general business credits, minimum tax credits, foreign tax credits and overall foreign losses.

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