A tax credit allows an entity to reduce the taxes paid to the home government by the amount of taxes paid to the foreign government.

Question

Quizplus · Accepted Answer

This statement is true. A tax credit is a provision in tax law that allows a taxpayer to claim a credit for a certain amount of foreign taxes paid on income earned in another country, and then reduce the taxes paid to the home government by that amount.

A Tax Credit Allows an Entity to Reduce the Taxes