58.1-332.1 - Credit for taxes paid to a foreign country on retirement income.
§ 58.1-332.1. Credit for taxes paid to a foreign country on retirement income.
A. Whenever a Virginia resident has become liable to a foreign country forincome tax paid on any pension or retirement income to the extent that suchincome is included in federal adjusted gross income for the taxable year,derived from foreign sources as a result of past employment in a foreigncountry and subject to taxation under this chapter, the amount of such taxpayable by him shall, upon proof of such payment, be credited on thetaxpayer's return with the income tax so paid to the foreign country. Thecredit allowable under this section shall not exceed: (i) such proportion ofthe income tax otherwise payable by him under this chapter as his income uponwhich the tax imposed by the foreign country was computed bears to hisVirginia taxable income upon which the tax imposed by this Commonwealth wascomputed or (ii) the income tax otherwise payable under this chapter, in theevent that the income upon which the tax imposed by the foreign country iscomputed is less than the Virginia taxable income upon which the tax imposedby this Commonwealth is computed.
B. For purposes of determining this credit, the foreign currency must betranslated into United States dollars using the prevailing rate of exchangewhich most nearly reflects the value of the foreign currency at the time thetaxes were actually paid to the foreign country.
C. As used in this section, a foreign country shall include all possessionsof the United States. Any foreign country which does not qualify for thefederal foreign tax credit under § 901(j) of the Internal Revenue Code willalso be disqualified for the credit allowed under this section.
(1998, c. 292.)