CAF-2 · Chapter 13 · Question 4 of 15
For the purpose of calculating the Foreign Tax Credit, how is the "Pakistan tax payable" in respect of foreign-source income determined?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) B) By applying the average rate of Pakistan income tax applicable to the taxpayer for the year against the net foreign-source income.
Explanation
The Pakistan tax payable in respect of foreign-source income shall be computed by applying the average rate of Pakistan income tax applicable to the taxpayer for the year against the taxpayer’s net foreign-source income for the year.
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