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lets say company A(PARNET COMPANY) pay 25% tax and company B(SUBSIDAIRY) pays 20% tax and also there is a bilateral treaty between them when the subsiairy remits dividends to parent company there have to pay 10% tax on dividends.
DOUBT – in this case when the A(PARNET COMPANY) pay the additioanl 5% taxx on the profits of the company B(SUBSIDAIRY) would it subtract the tax that the company B already paid on the remittance of dividends?
No. The tax paid on the remittances of dividends is not taken into account in calculating the extra tax on the profits (unless the question was to specify different rules).