Rules of Foreign Tax Deduction

The profits realized abroad for which the ‎foreign tax shall be deducted from income ‎tax in the Republic set forth in article (6) of ‎the CIT Law no.17 of 2010 is meant all the profits that are ‎obtained by the legal resident person, in ‎return of his investments outside the Republic ‎including proceeds collected on loans granted ‎abroad.‎

The foreign tax paid abroad from the income ‎tax in the Republic shall be deducted in ‎applying the following conditions on the ‎provision of article (6) of law:‎

• ‎The legal person claiming deduction shall ‎submit the supporting documents of ‎foreign tax settlement.‎
  
• The deduction of the tax settled abroad ‎shall not exceed the tax amount due from ‎the income resulted from foreign ‎resources that could be due in the ‎Republic in accordance with the ‎provisions of this Law and this Regulation.‎
  
• The payable tax in the Republic shall be ‎calculated on the basis of gross profits ‎realized abroad and included within the ‎resident legal person income multiplied by ‎the tax rate specified under the law to ‎which the taxpayer claiming deduction is ‎subject.

In all cases, losses realized abroad shall not ‎be deducted from profits earned within the ‎Republic.‎

The profits realized in each country shall be ‎treated independently from profits realized in ‎other countries. The losses resulting from any ‎activity realized in a certain country shall not ‎be deducted from the profits of any activity ‎realized in the Republic.‎