Which of the Following Statements Is False

question 28

Multiple Choice

Which of the following statements is false?

• A) If the foreign tax rate exceeds the U.S. tax rate, companies must pay this higher rate on foreign earnings.
• B) U.S. tax policy allows companies to apply the part of the tax credit that is not used to offset domestic taxes owed, so this extra tax credit is not wasted.
• C) If the foreign tax rate is less than the U.S. tax rate, the company pays total taxes equal to the U.S. tax rate on its foreign earnings.
• D) A full tax credit is given for foreign taxes paid up to the amount of the U.S. tax liability.

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