Referring to the solution to EOC Q4, my conclusion is as follows. In any case, SOURCE has priority over RESIDENCE. Credit / Deduction Method : After levied by the SOURCE, the remaining will be for RESIDENCE Exemption Method : Only levied by the SOURCE Can anyone confirm ?
Sorry, it shall be R16 !
that sounds right… In the exemption method, all taxes from the foreign investment is exempt from any tax in the domestic currency. In deduction, you only get a domestic deduction for the amount of taxes you paid in the foreign country. In credit, you get a credit off your domestic taxes for the amount you paid in tax to the foreign country. If the tax rate is higher in the domestic country, this credit will not fully cover your domestic tax expense, and you may be on the hook to owe more.