Translation of "tax credit method " (English → French) :

6. Points out that some Member States apply various methods for the elimination of double taxation, either by crediting taxes paid abroad (the credit method) or by exempting foreign income from the tax base (the exemption method); notes that only some of the Member States applying the exemption method do not provide for relief on losses incurred by foreign branches;

6. Points out that some Member States apply various methods for the elimination of double taxation, either by crediting taxes paid abroad (the credit method) or by exempting foreign income from the tax base (the exemption method); notes that only some of the Member States applying the exemption method do not provide for relief on losses incurred by foreign branches;

Using the credit method would result in very little tax being paid in the state of residence because the source country's tax would fully (or almost fully) cover any tax liability.

Using the credit method would result in very little tax being paid in the state of residence because the source country's tax would fully (or almost fully) cover any tax liability.

Depending on the national income tax systems different methods are used to achieve targeted tax reductions: a reduction of basic income tax rates or increases of basic allowances or, in the case of the Netherlands, by higher tax credits.

To resolve this difficulty, some Member States allow foreign tax to be credited to the domestic tax payable (imputation or tax credit method) while others which exempt the profits of foreign undertakings allow foreign losses to be deducted temporarily in some cases and to be reincorporated at a later date into the results of the head office to the extent of the amounts previously deducted (deduction method with subsequent reincorporation).2 (See annexes) In order to take account of the different practices in Member States but also to rationalize those practices, the proposal for a Directive envisages two technical methods for taking loss ...[+++]es into account that are designed, among other things, to facilitate new transfrontier activities, which, during the start-up phase, often generate losses for undertakings.