foreign tax credit

(redirected from Foreign Tax Credits)

Foreign tax credit

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

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.

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.
References in periodicals archive ?
Most tax professionals are aware of the limitations imposed on the utilization of foreign tax credits under Sec.
Court of Appeals for the Second Circuit upholding the disallowance of foreign tax credits claimed by other corporate entities not affiliated with the company.
tax return claimed $50 billion in foreign tax credits, an all-time high for this credit and increase of over $7.
taxpayers with foreign counterparts to generate foreign tax credits.
The IRS has released proposed regulations that would disallow foreign tax credits for foreign taxes purportedly paid in connection with certain artificially engineered, highly structured transactions.
profits in this structure), the foreign tax credits applicable to such foreign dividends paid into the United States are likely to be reduced, potentially resulting in an additional U.
The purpose of this FTCL is to prevent foreign tax credits from reducing U.
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.
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.
As previously disclosed, the company determined during fiscal 2006 that it was necessary to establish a valuation allowance related to deferred tax assets for its foreign tax credits.

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