Sec. 121. Modifications of foreign tax credit rules applicable to oil and gas industry taxpayers receiving specific economic benefits
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/bill/116/hr/7781/ih/section-121·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 to a foreign country or possession of the United States for any period by a dual capacity taxpayer which is in the trade or business of the production, refining, processing, transportation, or distribution of fossil fuel 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 no amount other than the amount required to be paid by such taxpayer under the generally applicable income tax imposed by the country or possession were paid or accrued by 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, or organized or incorporated under the laws of the foreign country or possession. For purposes of this subsection, the term fossil fuel means coal, petroleum, natural gas, or any derivative of coal, petroleum, or natural gas that is used for fuel. . 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. Notwithstanding section 894 or 7852(d) of the Internal Revenue Code of 1986, the amendments made by this section shall apply without regard to any treaty obligation of the United States.