4.1 Unilateral Double Taxation Relief
Sec. 24 Para 2 deals with a so called „residual“ method for eliminating double taxation. This method does not fully eliminate double taxation; it only mitigates its impact. Where there is no Double Taxation Treaty to be applied and as a consequence Sec. 38f will not be applicable a legal entity can deduct the tax paid abroad as a tax expense in the following fiscal period. This method allows the inclusion of the income tax paid abroad in the costs which decrease the domestic tax base (the tax is included to the extent that it was not counted in the domestic tax liability by using the credit system under the particular Double Taxation Treaty).
