Tax Sparing
Tax sparing refers to granting a home country foreign tax credit for specific foreign taxes that would have been payable but for tax exemption in the foreign country. The concept of tax sparing was once fairly widespread, but has been reconsidered by many countries. The apparent intent of the provisions was for developed nations to provide economic incentives for enterprises in such nations to invest in developing nations. Under the Germany/Indonesia tax treaty of 1977 (a typical provision), Germany allowed a credit with respect to dividends, interest and royalties for Indonesian taxes that would have been paid but for provisions of Indonesian law designed to promote economic development in Indonesia.
Read more about this topic: Foreign Tax Credit
Famous quotes containing the words tax and/or sparing:
“Change of fashion is the tax levied by the industry of the poor on the vanity of the rich.”
—Sébastien-Roch Nicolas De Chamfort (1741–1794)
“We are expected to put the utmost energy, of every power that we have, into the service of our fellow men, never sparing ourselves, not condescending to think of what is going to happen to ourselves, but ready, if need be, to go to the utter length of self-sacrifice.”
—Woodrow Wilson (1856–1924)