credit against

Question

...excluding any withholding taxes imposed if such withholding tax is allowed as a credit against our income taxes where such withholding is required by law.

"as a credit against" ? What does this phrase mean? Can somebody give me a hand?

Much thanks

Nona the brit · Accepted Answer

I can't make head or tail of that sentence (poor you having to deal with all these contracts) but 'credit against' means, for example

A owes B £100.

Unfortunatly B already owes A £200.

Therefore A credits what he owes against the amount B owes him, so will now only expect £100 from B.

Kathrin · Answer

Hi,

take a look at that link because the same phase has been used in the same way:

http://findarticles.com/p/articles/mi_qa3898/is_199810/ai_n8822112

If you want to take a credit, you have to offer some security known as loan security or collateral security so the bank could be sure the money would not have gone in the worst case scenario. Sometimes credit against is used in order to name the kind of security. You can see a very good sample for this in the mentioned link above.

Sometimes it is a bit complicated because it means 'to charge up against sth'. You know one person has a claim and the other person has a claim and so they can charge the one claim up against the counter-claim. At least in Germany you can do that but it is a common principle.

In your case I would say that the withholding tax can be used as a credit not from the bank but a form of credit and also charged up against the income taxes, so my understanding of the phrase but maybe Feebs11 have a better idea.

Best wishes,

Kathrin

Nona the brit · Answer

This isn't credit as in loans.

It just means to balance up one payment against another.

Kathrin · Answer

Hi,

Yes, of course not, I tryed to explain the idea. See my last paragraph.

Best wishes,

Kathrin

Qianlizhixing · Answer

Thanks you all!

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