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Taxes

Foreign tax relief

When discussing the topic of foreign tax relief, there are two main approaches that are often used: the credit method and the exemption method. In simple terms, these methods provide relief from domestic taxes on income that has already been taxed in a foreign country. The credit method allows for a deduction of the foreign tax amount from the domestic tax liability, while the exemption method completely exempts the foreign income from being taxed domestically. Each approach has its own advantages and limitations, which we will explore further in our discussion.
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