Deemed Paid FTC
Some countries grant FTC to corporations owning shares of a foreign corporation when the shareholder receives a dividend or other deemed income (e.g., under controlled foreign corporation provisions) based on the dividend payor's taxes and income. Under such systems, generally the amount of credit is the foreign taxes paid by the foreign corporation times the fraction of earnings distributed to the shareholder as a dividend. Generally, the amount of dividend is "grossed up" for the amount of available credit, before limitations, effectively charging the shareholder with home country tax for the income on a pre-tax basis. The deemed paid credit mechanism may be applied up the chain of corporate distributions, and may be subject to ownership limitations.
Read more about this topic: Foreign Tax Credit
Famous quotes containing the words deemed and/or paid:
“This unlettered man’s speaking and writing are standard English. Some words and phrases deemed vulgarisms and Americanisms before, he has made standard American; such as “It will pay.” It suggests that the one great rule of composition—and if I were a professor of rhetoric I should insist on this—is, to speak the truth. This first, this second, this third; pebbles in your mouth or not. This demands earnestness and manhood chiefly.”
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“He is well paid that is well satisfied.”
—William Shakespeare (1564–1616)