CIMA Exam CIMAPRA19-F01-1 Topic 5 Question 58 Discussion

Actual exam question for CIMA's CIMAPRA19-F01-1 exam

Question #: 58
Topic #: 5

What does the deduction method of giving double taxation relief mean?

ATax relief is gained by adding the foreign tax from the foreign income so that the gross amount will be subject to tax in the country of residency.

BTax paid in one country may be allowed as a tax deduction another country. Relief is normally restricted to the lower of the foreign or country of residency tax.

CTax relief is gained by deducting the foreign tax from the foreign income so that only the 'net' amount will be subject to tax in the country of residency.

DTax paid in one country may be allowed as a tax credit in another country. Relief is normally restricted to the higher of the foreign or country of residency tax.

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Suggested Answer: C

by Chanel at Sep 17, 2022, 12:31 PM

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