Discuss CIMA CIMAPRA19-F01-1 Exam Topic 5 Question 58

What does the deduction method of giving double taxation relief mean?

ATax relief is gained by adding the foreign tax from the foreign income so that the gross amount will be subject to tax in the country of residency.

BTax paid in one country may be allowed as a tax deduction another country. Relief is normally restricted to the lower 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.

DTax 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.

Suggested Answer: C

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12 comments · newest first

Noah 12 months ago

Isn't it weird that relief is capped at the lower tax? Sounds unfair!

Barney 12 months ago

Nah, I disagree with that. It’s more complicated than just deducting.

Jaime 1 year ago

Wait, so you can deduct foreign taxes? That's kinda cool!

France 1 year ago

I thought it was option C? Seems like a common mistake.

Raymon 1 year ago

Option B is correct! That's how it works.

Jaime 1 year ago

If I recall correctly, the deduction method is about reducing your taxable income, so I lean towards option C, but I need to double-check that.

Abel 1 year ago

I'm a bit confused about the difference between a deduction and a credit. I feel like I might mix them up in the exam.

Josphine 1 year ago

I remember practicing a question similar to this, and I think option C sounds right because it talks about the 'net' amount being taxed.

Sueann 1 year ago

I think the deduction method means you subtract the foreign tax from your income, but I'm not entirely sure if that's how it works.

Viva 1 year ago

Hmm, I'm a bit unsure about this one. I know the transfer of training is affected by factors like reinforcement and fear of change, but I'm not sure which one of these wouldn't impact it. I'll have to think this through carefully.

Frank 1 year ago

I guess it could be "functions," but that feels off, right? I thought metadata was more about organizing with tags.

Ailene 1 year ago

It seems like "appliance" could be relevant too, but it really depends on what functionalities we need for the network.

CIMAPRA19-F01-1 Exam - Topic 5 Question 58 Discussion