Sec. 303. Modifications of foreign tax credit rules applicable to major integrated oil companies which are dual capacity taxpayers

373 words·~2 min read·/bill/113/hr/699/ih/section-303

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

Section 901 of the Internal Revenue Code of 1986 is amended by redesignating subsection

(n)as subsection

(o)and by inserting after subsection

(m)the following new subsection: Notwithstanding any other provision of this chapter, any amount paid or accrued by a dual capacity taxpayer which is a major integrated oil company (as defined in section 167(h)(5)(B)) to a foreign country or possession of the United States for any period shall not be considered a tax— if, for such period, the foreign country or possession does not impose a generally applicable income tax, or to the extent such amount exceeds the amount (determined in accordance with regulations) which— is paid by such dual capacity taxpayer pursuant to the generally applicable income tax imposed by the country or possession, or would be paid if the generally applicable income tax imposed by the country or possession were applicable to such dual capacity taxpayer. Nothing in this paragraph shall be construed to imply the proper treatment of any such amount not in excess of the amount determined under subparagraph (B). For purposes of this subsection, the term dual capacity taxpayer means, with respect to any foreign country or possession of the United States, a person who— is subject to a levy of such country or possession, and receives (or will receive) directly or indirectly a specific economic benefit (as determined in accordance with regulations) from such country or possession. For purposes of this subsection— The term generally applicable income tax means an income tax (or a series of income taxes) which is generally imposed under the laws of a foreign country or possession on income derived from the conduct of a trade or business within such country or possession. Such term shall not include a tax unless it has substantial application, by its terms and in practice, to— persons who are not dual capacity taxpayers, and persons who are citizens or residents of the foreign country or possession. . The amendments made by this section shall apply to taxes paid or accrued in taxable years beginning after the date of the enactment of this Act. The amendments made by this section shall not apply to the extent contrary to any treaty obligation of the United States.