The foreign tax credit regime is the primary mechanism used by the U.S. government to mitigate or eliminate the potential double taxation of income earned by U.S. individuals outside the United States.

Question

Quizplus · Accepted Answer

The statement is true. The foreign tax credit regime allows U.S. taxpayers to offset U.S. tax liability by the amount of income tax paid to foreign countries on their foreign-sourced income. This helps to avoid or reduce the double taxation of income earned abroad.

The Foreign Tax Credit Regime Is the Primary Mechanism Used