Galaxy Inc. (Galaxy), a U.S. corporation, is engaged in the business of rendering engineering and project management services in Country A. Galaxy also licenses certain Country A patents to clients for use in connection with projects in which Galaxy is involved. Country A has no generally applicable income tax. It does, however, impose a withholding tax of 20% on gross royalties and a withholding tax of 25% on gross fees for services rendered in Country A which such royalties and fees are paid by residents of Country A to foreign persons. The gross royalties and gross service fees are independent tax bases on which each withholding tax is separately computed. No deductions are permitted.

(a) Galaxy receives royalties and engineering and project management fees from clients in Country A from which the 20 and 25% taxes are withheld, respectively. Are the withholding taxes creditable by Galaxy?

(b) Would the results in part (a) be different if Country A has a generally applicable income tax that is not imposed on royalties and fees paid by Country A residents to foreign persons, which are subject to the withholding taxes described?