Page:United States Statutes at Large Volume 49 Part 1.djvu/1765

 1720 74TH C ONGRESS. SESS. II. CH. 690. JUNE 22, 1936. this title only as to income derived from sources within the United States, and in such case the tax shall be computed and paid in the same manner and subject to the same conditions as in the case of other persons who are taxable. only as to income derived from such sou rces. V irgin Isla nds. (b) Nothing in this section shall be construed to alter or amend not Payment of taxes in, the provisions of the Act entitled "An Act making appropriations Vol .42,p.123. for the nava l ser vice for the fisca l ye ar en ding June 30, 1922, and for other purposes", approved July 12, 1921, relating to the imposition of income taxes in the Virgin Islands of the United States. China Trade Act cor- Supplement K-China Trade Act Corporations porations. SEC. 261. TAXATION IN GENERAL. Nor mal tax. In the case of a corporation organized under the China Trade Ante, p. 1655. Act, 1922, the normal tax imposed by section 13 shall be at the rate of 15 per centum instead of at the rates provided in such section, and suc h a corp oration shall n ot be s ubject to the s urtax i mposed by section 14. Credit ag ai nst net SEC. 262. CREDIT AGAI NST NET INCOM E. income, Ante, pp. 1019, 1655 . (a) ALLOWANCE OF CREDIT.--For the purpose only of the taxes imposed by section 13 of this Act and section 106 of the Revenue Act of 1935 there shall be allowed, in the case of a corporation organized under the China Trade Act, 1922, in addition to the credits against net income otherwise allowed such corporation, a credit agai nst the net inc ome of an amou nt equal to the proport ion of the net income derived from sources within China (determined in a Ante, p . 1693. similar manner to that provided in section 119) which the par value of the shares of stock of the corporation owned on the last day of the taxable year by (1) persons resident in China, the United States, or possessions of the United States, and (2) individual citizens of the United States or China wherever resident, bears to the par value of th e whole number of shar es of st ock of the corp oration outstan ding Proviso. on such date : Provided, That in no case shall the diminution, by Limitation. Ante, p.1ss5. reason of such credit, of the tax imposed by such section 13 (computed without regard to this section) exceed the amount of the special divi- dend certified under subsection (b) of this section ; and in no case shall the diminution, by reason of such credit, of the tax imposed by such section 106 (computed without regard to this section) exceed the amount by which such special dividend exceeds the diminution per- mitted by this section in the tax imposed by such section 13. Sp eci al dividend. Cond ition . (b) SPECIAL DIVIDEND .-Such credit shall not be allowed unless . the Secretary of Commerce has certified to the Commissioner- Credit subje ct to (1) The amount which, during the year ending on the date s dividend to residents of China, etc . fixed by law for filing thereturn, the corporation as distributed as a special dividend to or for the benefit of such persons as on the last day of the taxable year were resident in China, the United S tates, or posse ssions of the United S tates, or were individ ual citizens of the United States or China. and owned shares of stock of the corporation ; Additional to all othe r payments. (2) That such special dividend was in addition to all other amounts, payable or to be payable to such persons or for their benefit, by reason of their interest in the corporation ; and Distribution propor- (3) That such distribution has been made to or for the benefit tionate to sto ck owned. of such persons in proportion to the par value of the shares of Exce ption. stock of the corporation owned by each ; except that if the cor- poration has more than one class of stock, the certificates shall contain a statement that the articles of incorporation provide a