Tax credit for foreign tax reduces domestic liability where income is taxable abroad; exempt income may affect tax progression. Article 23 provides two methods to eliminate double taxation: a limited foreign tax credit permitting deduction of tax paid in the other Contracting State ... Summary
Tax credit for foreign tax reduces domestic liability where income is taxable abroad; exempt income may affect tax progression.
Article 23 provides two methods to eliminate double taxation: a limited foreign tax credit permitting deduction of tax paid in the other Contracting State up to the portion of domestic tax attributable to the foreign-taxable income; and an exemption-with-progression rule allowing the State of residence to take exempted income into account when computing tax on the resident's remaining income.
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