Foreign tax credit
The ability to reduce tax in the country of residence by an amount already withheld at source abroad, where a double taxation treaty between the two states is in force.
How to read the number
The credit does not happen by itself: it is claimed in a tax return and supported by a document confirming the withholding abroad.
When the metric lies
Where more was withheld abroad than is due at home, the difference is usually not refunded. Whether a treaty exists and how the credit works are set by the tax code and international agreements and change with the law.
Also known as: credit for tax withheld abroad