Abstract: The tax credit rules on Chinese enterprises foreign income aim to eliminate double taxations， protect the governments tax interests and encourage its enterprises to invest overseas. However， the current tax credit rules are problematic such as increasing the taxation burden of taxpayers and reducing the enthusiasm of overseas investment. Therefore， based on the national circumstances and needs， and in light of the experiences of developed countries， China should implement comprehensive quota credit instead of branch country quota credit， improve the counting standard and credit quota of foreign income and optimize the carry-over mechanism of excess credit. Moreover， China should relax the indirect tax credit restrictions on enterprise level and ownership while prescribing a limit to investors holding time， and implement the conditional unilateral sparing credit measures. Consequently， China could enhance its enterprises international competitiveness， promote a smooth implementation of the “going-out” policy， and drive the Chinese economy to develop more sustainably.

Key words: Chinese enterprise, foreign income, tax credit