Title II — TAX ON INCOME
estate or trust paid or incurred during the taxable year to a
foreign country, if his distributive share of the income of such
partnership or trust is reported for taxation under this Title.
An alien individual and a foreign corporation shall not be allowed
the credits against the tax for the taxes of foreign countries allowed
under this paragraph.
(4) Limitations on Credit. — The amount of the credit taken under this
Section shall be subject to each of the following limitations:
(a) The amount of the credit in respect to the tax paid or incurred
to any country shall not exceed the same proportion of the tax
against which such credit is taken, which the taxpayer’s taxable
income from sources within such country under this Title bears
to his entire taxable income for the same taxable year; and
(b) The total amount of the credit shall not exceed the same
proportion of the tax against which such credit is taken,
which the taxpayer’s taxable income from sources without the
Philippines taxable under this Title bears to his entire taxable
income for the same taxable year.
(5) Adjustments on Payment of Incurred Taxes. — If accrued taxes when
paid differ from the amounts claimed as credits by the taxpayer, or if
any tax paid is refunded in whole or in part, the taxpayer shall notify
the Commissioner, who shall redetermine the amount of the tax
for the year or years affected, and the amount of tax due upon such
redetermination, if any, shall be paid by the taxpayer upon notice
and demand by the Commissioner, or the amount of tax overpaid,
if any, shall be credited or refunded to the taxpayer. In the case of
such a tax incurred but not paid, the Commissioner as a condition
precedent to the allowance of this credit may require the taxpayer to
give a bond with sureties satisfactory to and to be approved by the
Commissioner in such sum as he may require, conditioned upon the
payment by the taxpayer of any amount of tax found due upon any
such redetermination. The bond herein prescribed shall contain such
further conditions as the Commissioner may require.
(6) Year in Which Credit Taken. — The credits provided for in Subsection
(C)(3) of this Section may, at the option of the taxpayer and
irrespective of the method of accounting employed in keeping his
books, be taken in the year in which the taxes of the foreign country
were incurred, subject, however, to the conditions prescribed in
Subsection (C)(5) of this Section. If the taxpayer elects to take
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