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Taiwan Explains Correct Calculation of Foreign Tax Credits

|Approved Changes|Taiwan
Taiwan

Taiwan's Ministry of Finance has issued a notice that explains the correct calculation of deductible foreign tax credits. This involved the determination of three values:

  • The actual amount of foreign tax paid (A);
  • The deductible limit (B), which is calculated as: (Foreign income – related costs) × 20% (corporate tax rate); and
  • The (incremental) domestic tax payable due to the addition of fore…

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