Double tax relief allocator
See which country taxes an item of income first and where the credit is claimed.
Open itA foreign tax credit is capped at the share of your home country tax that the foreign income represents. Enter the four figures and this shows the cap, the credit you actually get, and what is left over to carry.
This year on your return
$
Net of the deductions your home country allocates to it, if the rules require that.
$
The same base your home country tax is computed on.
$
What you would owe with no relief at all.
$
Only tax that is creditable under your rules. A refundable foreign levy usually is not.
$
Leave at zero if you have none.
Creditable this year
—
Foreign income as a share of total income —
Foreign tax exceeds the limit —
Credit limit for the year—
Foreign tax available, including the carry-in—
Credit allowed this year—
Carried forward to next year—
Limit left unused—
Home country tax after the credit—
Effective foreign rate on the foreign income—
Effective home rate on total income—
The limit is a ratio, not a rate
Every credit system caps relief at the home country tax attributable to the foreign income. The cap is the home country tax multiplied by foreign income over total income. That is why a credit can be denied even when the foreign tax was genuinely paid: the cap moves with your whole return, not with the foreign payment.
Two consequences follow, and both are visible in the readout. If your foreign rate is higher than your home effective rate, the excess is stranded. If your foreign rate is lower, part of the limit goes unused, which is where a carried-forward credit from an earlier year can finally be absorbed.
Where the four figures come from
Foreign-source income is not the gross payment. Most systems make you allocate a share of deductions and expenses against it, and the allocated figure is what goes in the numerator. Getting that wrong inflates the cap and overstates the credit.
Foreign tax means tax, not every deduction at source. A levy that is refundable, or one you could have avoided by claiming a treaty rate you did not claim, is often not creditable at all — the point of the treaty-rate calculators in this set. And a credit is usually computed separately by category of income, so a single blended run is a first pass rather than the answer.
Worked example
Total income 180,000, of which 60,000 is foreign. Home country tax before relief is 48,000, and 18,000 of foreign tax was withheld.
- Foreign income is one third of total income, so the cap is one third of 48,000 — 16,000.
- 18,000 of foreign tax is available, so 16,000 is credited and 2,000 carries forward.
- Home country tax falls from 48,000 to 32,000. The 2,000 waits for a year with limit to spare.
Now drop the foreign tax to 12,000. The credit becomes 12,000, nothing carries, and 4,000 of limit is left unused — the position a carried-forward credit is built to fill.
What this calculator assumes
- One basket. Where your rules split the credit by category of income, run each category separately and add the results.
- The limit uses the ratio of foreign income to total income. Some systems compute it on taxable income rather than total income; use whichever base your return uses.
- Carryback is not modelled. Where your rules allow it, a carried-out figure may go back before it goes forward.
- Only creditable foreign tax counts. A refundable levy, and tax you could have avoided by claiming a treaty rate, are usually outside the credit.
An estimate, not advice. This is an estimate built from what you typed, not advice on your file. Nothing here reads your documents, checks your treaty article or looks at the year you are actually in. Where the number matters, we agree a fixed fee in writing before any work starts.
Where these figures come from
- current guidance Canada — federal foreign tax credit, CRA
- current instructions United States — Form 1116 instructions, IRS
- current guidance India — foreign tax credit, Income Tax Department
Any figure prefilled in the panel above is stated with the year it belongs to and can be changed. Rates and thresholds move; a calculator that asks you for the current one stays right, and one that hides a guess does not.
Cross-border tax case studies
Case study 1
Indian Rent Collected While Resident Somewhere Else
Rent from Indian property is taxed in India and again where you live, with relief on one side only. The file gets the Indian deduction right first, then claims the credit on the home return against what was actually paid.
Read how this one runs
Case study 2
One Salary, Two Countries Claiming It
A US citizen resident in Canada, taxed in full on both sides because each return was prepared without the other in view. Deciding which country has the first right to the income, then claiming relief on the second return in the right order, is what stops the same dollar being taxed twice.
Read how this one runs
Case study 3
The Same Income Taxed Twice on Paper
Relief usually exists and is lost to sequence: one country taxes at source and the other credits it, and preparing them in the wrong order claims a credit against a figure nobody has computed.
Read how this one runs
Case study 4
Information Returns Missed Behind a Correct Return
The heaviest exposure on a cross-border file is often a disclosure form rather than the tax. Where the return itself was right, the procedures for late information returns turn on a reasonable-cause narrative with dates and documents behind it.
Read how this one runs
Case study 5
Social Security Contributions Owed in Two Countries at Once
A totalization agreement assigns contributions to one system and exempts the other, but only against a certificate obtained in advance. Without it both sets come out of the same salary and neither is straightforward to recover.
Read how this one runs
Case study 6
A Certificate Obtained Before the Money Moved
An application for a reduced or nil deduction is made in advance and decided on the computed liability, not on the gross amount. Applying after the payment leaves a refund claim in place of a certificate.
Read how this one runs
Case study 7
Indian Transfer Pricing Certification With a Hard Deadline
An Indian entity with international related-party transactions needs an accountant's report filed by a date of its own, ahead of the return. The work is reconciling the transactions to the books first, because the report is only as defensible as that reconciliation.
Read how this one runs
Case study 8
An Assignment Priced on an Equalisation Promise
A policy that leaves the assignee no better or worse off has to be computed, not just stated, and the hypothetical deduction runs alongside the real one. The engagement builds both and reconciles them at year end.
Read how this one runsAll case studies — every published engagement in one place.
Core International & Cross-Border Tax Services
International Tax Planning & Advisory
Strategy and compliance for income, assets and families spread across borders.
One coordinating team: filings on every side of the border are sequenced so treaty relief and foreign tax credits are claimed once — and in the right country.
U.S. & Cross-Border Tax Returns
Dual filers: U.S. citizens in Canada and Canadians with U.S. income run two parallel systems — we prepare both, in the right order, every year.
Expat & Emigration Tax
The move year is its own project: the elections and valuations filed that year decide the next decade of both countries’ returns.
Non-Resident Canadian Tax
Default withholding is 25% of gross: elective returns routinely turn over-withheld rent and pensions into refunds.
Transfer Pricing & BEPS
Documentation prepared with the return is the cheapest insurance in international tax; reconstructing it during an audit is the most expensive.
Tax Treaties & Withholding
Relief is only as good as the paperwork claiming it — we build treaty positions that survive review on both sides.
Cross-Border Estates & Trusts
Wills drafted for one country routinely misfire in the other — deemed disposition here, estate tax there, credits in between.
Global Investments & Reporting
Information returns carry the sharpest penalties — $25 a day whether or not any tax is owing. We keep them clean and on time.
Cross-Border Corporate Tax
Expansion raises the same four questions every time — entity, PE, repatriation, payroll. We answer them before the tax authorities do.
India Tax for NRIs & Returning Residents
The deduction is taken on the sale price, not the gain — which is why an NRI property sale strands cash unless the certificate is applied for before closing.
Canadian Tax with a Foreign Element
Residency is decided on facts, not on a form — and the year you arrive or leave is the one where the largest amounts turn on the smallest details.
UAE Tax for Expats & Their Home Country
A zero-tax country is only half the answer — the question that decides the bill is whether the country you came from still treats you as resident.
Industries & Client Types We Serve Worldwide
Global E-commerce & Marketplaces
Technology & SaaS
Professional Services Firms
Cross-Border Real Estate
Importers, Exporters & Manufacturers
Athletes, Artists & Entertainers
Remote Workers & Digital Nomads
Investment Funds & Holding Companies
Global E-commerce & Marketplaces
- Foreign VAT / GST / sales tax registrations
- Marketplace withholding reviews
- Inventory nexus & PE analysis
- Multi-currency books reconciled
Who We Serve:
Technology & SaaS
- Cross-border revenue sourcing & withholding
- IP structuring with real substance
- Equity for cross-border teams
- U.S. expansion: entity & PE setup
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Professional Services Firms
- Reg 105 / 102 waivers
- Permanent establishment risk
- Partner mobility planning
- Cross-border withholding recovery
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Cross-Border Real Estate
- Section 216 rental returns
- FIRPTA withholding recovery
- Section 116 clearance
- Treaty credit optimization
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Importers, Exporters & Manufacturers
- Transfer pricing documentation (s.247)
- Customs value vs transfer price
- Foreign affiliate reporting (T1134)
- Country-by-country reporting
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Athletes, Artists & Entertainers
- Reg 105 & U.S. CWA agreements
- Multi-state & country calendars
- Touring income allocation
- Royalty & image-rights withholding
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Remote Workers & Digital Nomads
- Residency analysis before moving
- Employer payroll exposure
- Totalization & social security
- Foreign tax credits
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Investment Funds & Holding Companies
Holding structures live or die on treaty access, beneficial ownership and substance — the MLI's principal-purpose test now sits over every arrangement.
A holding structure is only as good as its reporting. Foreign affiliates, accrued passive income and distributions each carry their own return, and the penalties on those attach to the form rather than to any tax being owed — so a structure that saves tax can still cost money if the information returns are late.
- Treaty access & PPT reviews
- FAPI & surplus computations
- Withholding-efficient routing
- Governance & substance
Who We Serve:
