ch-3-double-taxation-relief-消除双重征税.pptVIP

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. 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. School of Public Finance and Taxation,SLUC * Indirect credit 1.definition: The indirect credit is a credit granted to a domestic corporation for the foreign income taxes paid by a foreign affiliated company. The amount allowable as credit is the amount of the underlying foreign tax paid by the foreign affiliate on the income out of which the dividend was paid. School of Public Finance and Taxation,SLUC * underlying tax： 母公司从国外子公司分得的股息必然会负担的子公司所在国的税款 2. condition: To claim a credit for taxes paid by a foreign affiliate, the domestic corporation must own at least a minimum percentage, usually 10% of the capital of the foreign corporation. China? School of Public Finance and Taxation,SLUC * 3. example: 43 4. The credit for withholding tax is a direct credit but not an indirect credit, because the domestic company itself is treated as the payer of the withholding tax. School of Public Finance and Taxation,SLUC * 5. Appraisal: (1) The credit method may have the effect of discouraging domestic corporation that have earned profits abroad through foreign affiliates from repatriating those profits as dividend distributions. (2) The rules designed to govern the indirect foreign tax credit are typically the most complex part of a foreign tax credit system.(p44,p2p3) School of Public Finance and Taxation,SLUC * Example 8: X国母公司A拥有Y国子公司B的50%的股份。A公司在某纳税年度在X国获利100万元，B公司在同一纳税年度在Y国获利200万元，缴纳公司所得税后，按股权比例向母公司支付毛股息，并缴纳预提所得税；X国公司所得税税率为40％，Y