Suppose that the German parent has sales equaling 200, and the Tunisian branch, 100. Direct costs are 80 and 30, respectively. German tax authorities allocate over head, which amounts to 120, on the basis of sales, while in Tunisia allocation is proportional to direct cost. German and Tunisian taxes are 40 percent. Are you vexed by or happy with this discrepancy between the rules? Consider both the credit system and the exclusion system.