Which of the following statements is NOT correct with regard to the foreign tax credit? The purpose of the foreign tax credit is to mitigate the double tax caused by a U.S. citizen working in a foreign country. If the U.S. tax rate rate and actual tax is higher than the foreign tax rate and tax, this will result in a 100% refund of foreign taxes. The foreign taxes paid can potentially be fully recovered by the foreign tax credit. Sales tax is not used in computing the foreign tax credit. The credit is equal to the greater of the overall limitation or the actual foreign taxes paid.