Credit for notional tax foregone by developing countries



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Certain double taxation agreements with developing countries provide for 'tax sparing'. Tax sparing preserves taxation incentives which are provided by a treaty partner to promote economic development. If tax sparing applies to a tax incentive, you can claim a credit for tax foregone by a treaty partner under the incentive. The double taxation agreements list the taxes for which tax sparing is provided.

Last modified: 05 Dec 2006QC 17522