The extensive system of foreign tax credits allows
A)U.S.MNCs to lower their effective tax rate on foreign-source income to below the U.S.corporate tax rate
B)governments to collect more taxes from MNCs
C)reduce the amount of taxes they owe the host country
D)MNCs to avoid double taxation on foreign?source income

Question

Quizplus · Accepted Answer

The extensive system of foreign tax credits allows MNCs to avoid double taxation on foreign-source income, meaning they do not have to pay taxes on the same income in both the foreign country where it was earned and the United States. This helps to prevent double taxation and promotes international trade and investment.

The Extensive System of Foreign Tax Credits Allows