国际税收chapter4.ppt

Note: The three methods for limiting the foreign tax credit are not mutually exclusive. For instance, the U.S. uses this type of hybrid method, i.e. separate baskets approach.（p42） Qin Luo, School of Public Finance and Taxation,SLUC China: EIT: country-by-country IIT: country-by-country and item-by-item　why? Qin Luo, School of Public Finance and Taxation,SLUC Assignment 3-1: T Co is the resident of China. Its domestic income taxable is 3000,000 in 2008. Its income earned abroad is as follows: Country A Business income 1500,000 40% Royalty 500,000 15% Country B Rent 300,000 20% Interest 500,000 Royalty 200,000 Qin Luo, School of Public Finance and Taxation,SLUC All income earned abroad is taxed by local government. Compute the foreign tax credit and the actual tax payable T Co should pay to China. Qin Luo, School of Public Finance and Taxation,SLUC Assignment 3-2: Mr. Li earned income 79,600 from country A in 2010, including payroll 69,600 (average 5,800 per month) from one company and service income 10,000. He paid tax 2100 to country A. Besides, he earned royalty 30,000 from country B and also paid tax 6,000. Compute the foreign tax credit and the actual tax payable Mr. Li should pay to China. Qin Luo, School of Public Finance and Taxation,SLUC Assignment 3-1: Country A limitation: (1500,000+500,000)*25%=500,000 Country B limitation: (300,000+500,000+200,000)*25%=250,000 Country A tax: 1500,000*40%+500,000*15%=675,000 Country B tax: (300,000+500,000+200,000)*20%=200,000 Qin Luo, School of Public Finance and Taxation,SLUC total tax before credit: (3000,000+2000,000+1000,000)*25%=1500,000 Tax after credit: 1500,000-500,000-200,000=800,000 Qin Luo, School of Public Finance and Taxation,SLUC Assignment 3-2: (1) country A limitation: Payroll: Per month: (5800-4800)*10%-25=75 Per year: 75*12=900 Service:10,000*(1-20%)*20%=1,600 Total limitation: 900+1600=2500 (2) country B limitation: 30,000 *(1-20%)*20%=4800 Qin Luo, School of Public Finance and Taxation,SLUC C