Page:United States Statutes at Large Volume 47 Part 1.djvu/236

 212 72d C ONGRESS. SESS.I. CH. 209 JUNE 6, 1932 . u'c°'Z TAX (d) YEAR Ix WmCM CREDIT TAxEx .The credits provided for cr edit s for foreign in this section may, at the option of the taxpayer and irrespective taxes may be taken the ye ar accr ued. of -the method of accounting employed in keeping his books, be taken in the y ear in which th e taxes of the f oreign country o r the possession of the United Stat es accrtied, sub ject, however, t o the tax- for edit onssamee basis con diti ons pre scribed in subsec tion (c) of this section. If the tax- payer elects to take such credits in the year in which the taxes of the foreign country or the possession of the United States accrued, the credits for all subsequent years shall be., taken upon the same basis, and no portion of any such taxes shall be allowed as a deduc- tion in the same or any succeeding year. Proof of credits. (e) PROOF of CREDITs.-The credits provided in this section shall be allowed onl y if the taxpay er establishes t o the satisfacti on of Evidence of foreign the C ommissioner (1) the total amount of income deriv ed from income. Arue, p. xoa sources without the United States, determined as provided in section 119, (2) the amount of income derived from each country, the tax amounts . ation of paid or accrued to which is claimed as a credit under this section, such amount to be determined under rules and regulations prescribed by li on Additional necessary .informs- the Commissioner with the approval of the Secretary, and (3) all 3r7 other information necessary for the verification and computation of Taxes of fore ign sub- such credits . sidiery. (f) TA XES OF FoRmoN S1 smDIARY:For the purposes of this section a dome stic corporatio n which owns a m ajority of the v oting Pr opor tio n of fore ign tax on dividends re-stock of a foreign corporation from which it receives dividends (not ceived deemed to have deductible under section 23(p)) in any taxable year shall be deemed been paid. to have paid the same proportion of any income, war-profits, or excess-profits taxes paid by such foreign corporation to any foreign country or to any possession of the United States, upon or with respect to the accumulated profits of such foreign corporation from which such div idends were pai d, which the amo unt of such divi dends Limit °on credit al- bears to the amount 'of such accumulated profits Provided, That lowed. the amount of tax deemed to have been paid under this subsection shall in no case exceed the same proportion of the tax against which credit is taken which 'the amount of such dividends bears to the Meaning of "accumu- amount of the entire net income of the domestic corporation in which sated profits ." such dividends are included. The term " accumulated profits " when used in this subsection in reference to a foreign corporation, means Determination of, by the amount of its gains, profits, or income in excess of the income, commissioner. war-profits, a nd excess-profi ts taxes imposed upon or with re spect to such profits or income ; and the Commissioner with the approval of the Secretary shall have full power to determine from the accumulated profits of what year or years such dividends were paid treating di vidends paid in t he first sixty da ys of any year a s having been paid from the accumulated profits of the preceding year or years (unless to his satisfaction shown otherwise), and 'in other Accountingperiodror respects treating dividends as having been paid from the most foreignc orporation r recently accumulated gains, profits, or earnings. In the case ofa foreign corporation, the income, war-profits, and excess-profits taxes of which are determined on the basis of an accounting period of less than one year, the word " year " as used in this subsection shall be construed to mean such accounting period. C orpo rat ions tr eat ed as forei gn. (g) CORPoRATIoNs TREATED AS Foimmx .-For the purposes of this . section the following corpor ations shall be t reated as foreig n corpo- United states posses- rations slons. (1) A: corporation entitled to the benefits of section 251, by P°A p' 231. reason of rece iving a large pe rcentage of its gross income fr om China Trade Act sources within a possession i1 the United States ; corporat ions. (2) A corporation organized under the China Trade Act, 1922, P. M. . and entitled to the credit prov ided for in secti on 261.