IN WHAT SITUATION MIGHT AN MNC HAVE AN EXCESS AMOUNT OF FOREIGN TAX...

79.In what situation might an MNC have an excess amount of foreign tax credits? a. If the income tax rate in a foreign country is higher than the tax rate in the home country of the MNC, the MNC would pay more foreign income tax than it would domestic income tax, in which case, the foreign tax credit would exceed the domestic tax due. b. If the income tax rate in a foreign country is lower than the tax rate in the home country, the MNC would pay more domestic income tax than it would foreign income tax, so that the MNC would have domestic income tax in excess of the foreign income tax. c. If the foreign subsidiary of an MNC pays income taxes in more than one foreign country, the MNC will have excess foreign tax credits because the taxes paid in more than one foreign country cannot be used as credits against domestic income taxes. d. If the foreign subsidiary of an MNC pays income taxes in the country where it operates and then remits some or all of its profits to the MNC, the withholding taxes on that remittance will not be included in the foreign tax credit that the MNC is entitled to claim.