CIMAPRA19-F01-1 Exam - Topic 3 Question 59 Discussion

Actual exam question for CIMA's CIMAPRA19-F01-1 exam

Question #: 59
Topic #: 3

What does the tax credit method of giving double taxation relief mean?

ATax paid in one country may be allowed as a tax credit in another country. Relief is normally restricted to the lower of the foreign or country of residency tax.

BTax paid in one country may be allowed as a tax credit in another country. Relief is normally restricted to the higher of the foreign or country of residency tax.

CTax relief is gained by deducting the foreign tax from the foreign income so that only the 'net' amount will be subject to tax in the country of residency.

DThe countries agree on certain types of income which will be exempt or partially exempt in one country or the other.

Show Suggested Answer

Suggested Answer: A

by Alex at Oct 14, 2022, 11:04 PM

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Veronika

4 months ago

Not sure I buy that, sounds too good to be true!

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Danilo

4 months ago

Definitely A, it’s all about the lower tax limit.

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Cheryl

4 months ago

Wait, so you can get credit for taxes paid abroad? That's cool!

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Elroy

4 months ago

I thought it was the higher tax that gets credited, not the lower?

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Santos

4 months ago

A tax credit can really help avoid double taxation!

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Gretchen

5 months ago

I vaguely recall that the tax credit method is about preventing double taxation, but I can't remember the specifics on how the limits work.

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Anthony

5 months ago

I’m a bit confused about the difference between the tax credit method and the deduction method. I feel like I might mix them up during the exam.

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Serita

5 months ago

I remember practicing a question similar to this, and I think the relief is usually limited to the lower of the two taxes. So, I would lean towards option A.

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Onita

5 months ago

I think the tax credit method allows you to offset taxes paid abroad against your domestic tax, but I'm not sure if it's the lower or higher amount that applies.

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Izetta

5 months ago

Hmm, this is a tricky one. I'll need to think through the service-orientation principles carefully to figure out which characteristic doesn't fit.

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Miesha

5 months ago

This seems like a straightforward question about improving the order fulfillment process. I'd focus on options that address the root causes, like the mismatch between inventory and sales orders.

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Dorsey

5 months ago

I remember a practice question where we discussed integrating sustainability into performance appraisals. It seems like it would motivate employees to prioritize it more.

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Malissa

5 months ago

Hmm, this looks like a tricky one. I'll need to carefully review the log entry and think through the potential causes before deciding on the best approach.

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Kati

5 months ago

I'm not sure negotiating with the product team to always prioritize reliability is realistic. There needs to be a balance between new features and service quality.

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