Add a foreign tax credit

On the Foreign Tax Credits workpaper, you can record any credits received from tax paid on foreign income.

The system can do a full limitation calculation for you, on a segment by segment basis, to determine whether there are any restrictions on the foreign tax credit allowed. The system gets the data from the following workpapers that may have been added against an account in the Trial Balance: Foreign interest, Foreign dividend or Attributed FIF/CFC income.  

Use the full limitation calculation or enable the manual override

1. In the entity’s income tax return, click the Workpapers tab > Foreign Tax Credits.
2. Select your required option:
   • Full limitation calculation.
   • Manual override.

Using the manual override option

1. Click the New button.
2. Type the name of the segment.
3. Enter the amount of foreign income tax paid and the foreign tax credit allowed.
4. Optional: Add a note explaining why you made this transaction.
5. Click Save.

The tax credit displays in the Statement of Tax Position.

Foreign tax credits and consolidated tax groups

If the entity is a member of a tax consolidated group, you can use the Full limitation calculation or the Manual override option as outlined above.

• Full limitation calculation – The foreign tax credit can be entered in the member entity. The foreign tax credit limitation calculation will not be displayed on the member entity. However, the full limitation calculation will be displayed in the Tax Consolidated Group.
• Manual override – If you are using this option, you will need to manually enter the foreign tax credits at the Tax Consolidated Group.