Q7 of BPP revision kit. Tax on foreign subsidiary dividends

Hello Sir

My question is in reference to the Q7 of BPP revision kit. Following is the extract from the scenario.

“Limni co. is due to receive $15m in dividends from overseas subsidiary, on which annual tax of 20% on average has been paid. Limni co. itself pays tax at 26%, and the tax authorities, where Limni co. is based charge tax on dividend remittance made by overseas subsidiary companies, but give full credit on tax already paid on those remittances.”

So, what is the effective tax it pays? I say it is 26%. It pays 20% on remittance, then pays 26% to tax authorities in its own country. The same tax authorities refund Limni co. the 20%. Therefore, effective tax is 26%.

So why does the kit say it is 6% (26% – 20%)

Thanks in advance..

Sincerely,