How To Claim Foreign Tax Credit?

With increased scale of globalisation and growing levels of economic activities, the entrepreneurs, to explore global market potentials, are expanding their business activities in various countries. This has led to increased cross border transactions which in turn raises many issues on double taxation of their income.

Every Company/Individual is taxed on its global income in the country of its residence. A Company/Individual is also exposed to tax in the country where it has its Source of income. Therefore, they are exposed to double taxation on the same income, if source of such income is derived from another country. This is hindrance to smooth flow of cross border transactions. Many countries have therefore signed Double Tax Avoidance Agreements (DTAA) as a solution to address this problem of double taxation.