SCh 2011 practice test Q5 V1 investing, practice, domestic, investor, provided

ohai

Q5 talks abt taxes credit
In solution for q5, Sch says: The withholding taxes assessed by foreign gov can be significant obstacle to international investing. Although the tax are often paid back to the investor after period of time, the delay create oppotunity cost. In some contries, the tax are not paid back but are mitigated by tax credit provided by domestic gov. However, the credit do not benifit investor who are tax exempted.
Is that the taxes paid back when foreign tax rate higher than domestic tax rate ?
In question 8, they say effective tax rate is the higher (it means no tax paid back ?)

maratikus

witholding taxes

dontknow1987

Igor, though it is withholding taxes. I am not sure that domestic gov will pay back to investor.
Currently, we see a lot of company move their headquaters to tax-heaven territories like cayman, bristish island….which has very low tax rate.
Assum a company located in cayman where tax rate is 5%. The company has an income arising in Vietnam and Vietnam gov taxes 20% withholding….Is the company refunded 15% difference?