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A foreign tax credit is a financial term that refers to a tax or levy that is dependent on the availability of a tax credit in another country. This means that if a taxpayer pays taxes in a foreign country, they may be eligible to receive a credit on their taxes in their home country. This can help to reduce the impact of double taxation and is an important consideration for individuals and businesses with international financial activities. Essentially, a foreign tax credit allows for the recognition of taxes paid in a foreign country and helps to promote fair taxation practices.
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