The Tax Authority has recently made a clarification through a Public Ruling, GLN 25641, regarding foreign tax credit (FTC) as well as unilateral relief methods. According to the letters, the maximum foreign income tax credit paid to a foreign country is 27% of the taxes paid. Foreign customers must show their withholding tax certificate for claiming the validity of FTC. Also, a formal letter must be provided from the foreign tax authorities confirming the remittance of said withholding tax. Upon DGII’s request the invoice corresponding to the transaction at hand must be available.
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