Foreign taxes accrued on dividends cannot be claimed as a business deduction or a tax credit by a U.S.corporation.

Question

Quizplus · Accepted Answer

Foreign taxes accrued on dividends can be claimed as a tax credit by a U.S. corporation. This is done through the foreign tax credit system, where a dollar-for-dollar credit is given for foreign taxes paid on foreign source income, which includes dividends. However, it cannot be claimed as a business deduction.

Foreign Taxes Accrued on Dividends Cannot Be Claimed as a Business