Page:United States Statutes at Large Volume 114 Part 4.djvu/362

 114 STAT. 2424 PUBLIC LAW 106-519—NOV. 15, 2000 "(d) DENIAL OF CREDITS FOR CERTAIN FOREIGN TAXES.— Notwithstanding any other provision of this chapter, no credit shall be allowed under this chapter for any income, war profits, and excess profits taxes paid or accrued to any foreign country or possession of the United States with respect to extraterritorial income which is excluded from gross income under subsection (a). "(e) EXTRATERRITORIAL INCOME.— For purposes of this section, the term 'extraterritorial income' means the gross income of the taxpayer attributable to foreign trading gross receipts (as defined in section 942) of the taxpayer.". (b) QUALIFYING FOREIGN TRADE INCOME. —Part III of subchapter N of chapter 1 is amended by inserting after subpart D the following new subpart: "Sec. 941. Qualifying foreign trade income. "Sec. 942. Foreign trading gross receipts. "Sec. 943. Other definitions and special rules. ••SEC. 941. QUALIFYING FOREIGN TRADE INCOME. "(a) QUALIFYING FOREIGN TRADE INCOME. —For purposes of this subpart and section 114— "(1) IN GENERAL.—The term 'qualifying foreign trade income' means, with respect to any transaction, the amount of gross income which, if excluded, will result in a reduction of the taxable income of the taxpayer from such transaction equal to the greatest of— "(A) 30 percent of the foreign sale and leasing income derived by the taxpayer from such transaction, "(B) 1.2 percent of the foreign trading gross receipts derived by the taxpayer from the transaction, or "(C) 15 percent of the foreign trade income derived by the taxpayer from the transaction. In no event shall the amount determined under subparagraph (B) exceed 200 percent of the amount determined under subparagraph (C). " (2) ALTERNATIVE COMPUTATION. —A taxpayer may compute its qualifying foreign trade income under a subparagraph of paragraph (1) other than the subparagraph which results in the greatest amount of such income. " (3) LIMITATION ON USE OF FOREIGN TRADING GROSS RECEIPTS METHOD.—I f any person computes its qualifying foreign trade income from any transaction with respect to any property under paragraph (1)(B), the qualifying foreign trade income of such person (or any related person) with respect to any other transaction involving such property shall be zero. "(4) RULES FOR MARGINAL COSTING.—The Secretary shall prescribe regulations setting forth rules for the allocation of expenditures in computing foreign trade income under paragraph (1)(C) in those cases where a taxpayer is seeking to establish or maintain a market for qualifying foreign trade property. Regulations. "(5) PARTICIPATION IN INTERNATIONAL BOYCOTTS, ETC.— Under regulations prescribed by the Secretary, the qualifying foreign trade income of a taxpayer for any taxable year shall be reduced (but not below zero) by the sum of—
 * Subpart E—Qualifying Foreign Trade Income

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