Page:United States Statutes at Large Volume 49 Part 1.djvu/1762

 74 TH CONGRESS. SESS. II. CH. 690. J UNE 22, 1936 . Su ppl eme nt I-Foreign Corporations SEC. 231. TAX ON F ORE IGN COR POR ATIO NS. not be subject to the surtax imposed by section 14. (d) GROSS INCOME .-In the case of a foreign corporation gross income includes only the gross income from sources within the United States. (e) SHIPS UNDER FOREIGN FLAG .-The income of a foreign cor- poration, which consists ex clusively off earnings derived from the operation of a ship or ships documented under the laws of a foreign country which grants an equivalent exemption to citizens of the United States and to corporations organized in the United States, shall not be included in gross income and shall be exempt from taxa- tion under this title. SEC. 232. DED UCTION S. (a) IN GENERAL .-In the case of a foreign corporation the deduc- tions shall be allowed only if and to the extent that they are con- nected with income from sources within the United States ; and the proper apportionment and al location of the deductions wit h respect to sources within and without the United States shall be determined as provided in section 119, under rules and regulations prescribed by the Commissioner with the approval of the Secretary. (b) CH ARIT ABL E, AND SO FORTH, CONTRIBUTIONS .-The so-called "charitable contribution" deduction allowed by section 23 (q) shall be allowed whether or not connected with income from sources within the United States. SEC. 233. ALLOWANCE OF DEDUCTIONS AND CREDITS. A foreign corporation shall receive the benefit of the deductions and credits allowed to it in this title only by filing or causing to be filed with the c ollect or a true a nd ac curate retu rn of its t otal income received from all sources i n the United States, in the ma nner pre- scribed in this title ; including therein all the information which the Commissioner may deem neces sary for the calculation of su ch deduc- tions and c redit s. 1717 Foreign corporations. Tax on foreign corpo- rations. (a) NONRES IDENT CoRPORATIONs .-There shall be levied, collected, and paid for each taxable year, in lieu of the tax imposed by sections 13 and 14, upon the amount received by every foreign corporation not engaged in trade or business within the United States and not having an office or place of business therein, from sources within the United States as interest (except interest on deposits with persons carrying on the banking business), dividends, rents, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, or other fixed or determinable annual or periodical gains, profits, and income, a tax of 15 per centum of such amount, except that in the case of dividends the rate shall be 10 per centum, and except that in the case of corporations organized under the laws of a contiguous country such rate of 10 per centum with respect to dividends shall be reduced to such rate (not less than 5 per centum) as may be provided by treaty with such country. (b) RESIDENT CORPORATIONS .-A forei gn corporation engaged in trade or business within the United States or having an office or place of business therein shall be taxable without regard to the provisions of subsection (a), but the normal tax imposed by section 13 shall be at the rate of 22 per centum instead of at the rates provided in such sect ion. Not su bj ect to un- (C) UNDI STRIBU TED PR OFITS SURTAX .-A forei gn cor porati on sha ll distributed profits tax. Ante, p. 1655. Gro ss in co me, fr om United States sources. Nonresident corpora- tions. Ante, p. 1655. Resident corpor a- tions. Ships under foreign flag. Conditional exemp- tions. Deductions. On income from United States sources. Apportionment, etc. Ante, p. 1693. Chari table, etc ., con- tributi ons . Ante, p. 1661. Allowance of deduc- tions and credits. Benef it of, by fili ng return of all income from United St ates sources.