The Tax Authority has recently made a clarification through a guide, GLN 25641, regarding foreign tax credit (FTC) as well as unilateral relief methods. The following instructions are effective immediately and have included in the Tax Code:

  • The highest foreign tax credit rate (27%) is equal to local corporate tax rate.
  • Foreign customers required to show a withholding tax certificate for claiming the validity of their FTC.
  • the invoice corresponding to the transaction at hand must be available at the request of the DGII; and
  • a official letter must be provided from the foreign tax authorities confirming the remittance of said withholding tax.