18 Another question will save this responde Question & 45 points suport Double taxation is an international issue that discourages foreign investments in any country. Therefore, many tax treaties among countries bring some just to considering the foreign income tax that is paid by the firm as a tax deduction or tax credit in this hypothetical example, up the late with the cotations need of ca tax and the effective tax rate under the two columns provided for deduction or credit Income earned by the foreign company Foreign tax at 30% 1. UK tax at 40 % Net Income after foreign tax 2. UK tax at 40 % 3. UK tax at 40% Net Income after tax in UK 1 Double Taxation $200 2 Deduction 3 Crede $200 $200 Effective tax rate Note: 1 refers to the Double Taxation, 2 refers to the Tax deduction 3 refers to the Tax credit