Foreign tax credit limits domestic tax to the portion attributable to income taxed abroad; exempt income may affect remaining tax. A resident's State shall allow a deduction from domestic tax equal to income tax paid in the other Contracting State, but not exceeding the part of domestic tax attributable to income taxable in that other State; additionally, where income is exempt in the resident State under the Agreement, that State may take the exempted income into account when calculating tax on the resident's remaining income.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Foreign tax credit limits domestic tax to the portion attributable to income taxed abroad; exempt income may affect remaining tax.
A resident's State shall allow a deduction from domestic tax equal to income tax paid in the other Contracting State, but not exceeding the part of domestic tax attributable to income taxable in that other State; additionally, where income is exempt in the resident State under the Agreement, that State may take the exempted income into account when calculating tax on the resident's remaining income.
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