Page:United States Statutes at Large Volume 49 Part 1.djvu/1722

 7 4TH CONGRESS. SESS,. II. CH. 690. JUNE 22, 1936. 1677 (2) RETAINED NET INCOME .-The te rm "retained net in com e" " Retain ed not ha- mea ns the special adjusted net income mi nus the sum of the come ." dividends paid credit provided in section 27 and the credit pro- Ante, pp. 1664, 3663. vided in section 26 (c), relating to cont racts re strictin g divide nds. For the purposes of this subsection, such credits shall be com- puted by substituting in section 26 (c) and in section 27 for the words "adjusted net income" wherever appearing in such sections the words "special adjusted net income". (d) PAYMENT OF SURTAX ON PRO RATA SHARES.--The tax imposed onPaym re nt of es urtax b y this s ection s hall not apply if (1) all the sha reholder s of the cor- poration include (at the time of filing their returns) in their gross inc ome thei r entire pro rat a shares, whether distrib uted or not, of the retained net income of the corporation for such year, and (2) 90 per centum or more of such retained net income is so included in the gross income of shareholders other than corporations. Any amount so included in the gross income of a shareholder shall be treated as a dividen d received. Any subsequent distribution made by the ti sub sequent di stribu . corporation out of earnings or profits for such taxable year shall, if distributed to any shareholder who has so included in his gross income his pro rata share., be exempt from tax in the amount of the share so included. (e) TAX ON P ERSONAL HOLD ING COMPANIES.-For surtax on per- Personal holding sonal holding companies, see section 3a1. Post, p . p. 1732. SEC. 103 . RATES OF TAX ON CITIZENS AND CORPORATIONS OF CER- Discri minato ryorex- TAIN FOREIGN COUNTRIES. tr ater rito rial tax es. When ever the President finds tha t, under the laws of any fo reign Rates when citizens are subjected by foreign country, citizens or corporations of the United States are being sub- countries to. j ected to discrim inatory or extrat erritori al taxes, the Pr esident shall so proclaim and the rates of tax imposed by sections 11, 12, 13, 201 Pnte, ppp .l 165 3, 1 1655 ; (b), 204 (a), 211 (a), and 231 (a) shall, for the taxable year during 17 14,17 1 pp. , 71 1, 7. which such proclamation is made and for each taxable year there- after, be doubled in the case of each citizen and corporation of such foreign country ; but the tax at such doubled rate shall be considered as imposed by sections 11, 12, 13, 201 (b), 204 (a), 211 (a), or 231 (a), as the case may be. In no case shall this section operate to increase Limitation. the taxes imposed by such sections (computed without regard to this section) to an amount in excess of 80 per centum of the net income of the taxpayer. Whenever the President finds that the laws of any fl d fo re ign l aws modi- foreign country with respect to which the President has made a proclamation under the preceding provisions of this section have been modified so that discriminatory and extraterritorial taxes applicable to citizens and corporations of the United States have been removed, h e shall s o proclai m, and the provisio ns of thi s section providin g for doubled rates of tax shall not apply to any citizen or corporation o f such fo reign cou ntry with respect t o any tax able year beginnin g a fter such proclama tion is ma de. SEC. 104. BANK S AND TRU ST CO MPAN IES. Banks and trust corn. p anies. (a) DEFINITION .-As used in this section the term "bank" means Def initi on. a bank or trust company incorporated and doing business under the laws of the United States (including laws relating to the District of Columbia), of any State, or of any Territory, a substantial part o f the bus iness of which cons ists of r eceiving deposits and makin g loans and discounts, or of exercising fiduciary powers similar to those permitted to national banks under section 11 (k) of the Federal p. 262. Reserve Act, as amended, and which is subject by law to supervision and examination by State or Federal authority having supervision over banking institutions.