The US Internal Revenue Service (IRS) has published a statistical report with data of corporations that claim the US foreign tax credit (FTC). The report was published by the IRS Statistics of Income (SOI) Division based on sampling of corporate income tax returns with accounting periods ending between July 2010 and June 2011.
The FTC is claimed under section 901 of the US Internal Revenue Code (IRC) and is intended to prevent potential double taxation on the foreign-source income of US corporations. The FTC is subject to a limitation under IRC section 904 that restricts the FTC to the amount of US income tax a corporation would have otherwise paid on foreign-source taxable income, which is attached to their corporate income tax return. The IRS report includes a chart that compares the foreign-source taxable income of corporations. The IRS report also notes that US corporations claimed total FTCs of USD 118.1 billion for the 2010 tax year, and were able to reduce their overall US income tax liability by approximately 48.6% by means of the FTC and other available credits.
An analysis of geographic regions shows that countries located in Europe had the largest shares of foreign-source taxable income (44.0%), and the largest current-year amount of foreign taxes paid, accrued, and deemed paid (49.7%). The report notes that corporations in the Netherlands, United Kingdom, Canada, Luxembourg, and Bermuda combined to account for more than 35% of foreign-source taxable income.
