Page:United States Statutes at Large Volume 53 Part 2.djvu/400

 PUBLIC LAWS-CH. 247-JUNE 29, 1939 Taxable years to which applicable. e c si (c) TAXABE YESRs TO WHICH APPrrI ABnr-The amendments made by this section shall be applicable to taxable years beginning after December 31, 1938. SEC. 216. FOREIGN TAX CREDIT. AUowance of for- (a) DISALLOWANCE OF CREDIT TO SECION 102 CORPORATIONS.-Sec- ign tax credit. Antex cp. .1 tion 131 (a) of the Internal Revenue Code (relating to allowance of IR.C .§131(a). foreign tax credit) is amended by striking out "If the taxpayer signifies in his return his desire to have the benefits of this section, the tax imposed by this chapter shall be credited with" and inserting in lieu thereof "If the taxpayer signifies in his return his desire to Ate.3 . 0 have the benefits of this section, the tax imposed by this chapter, except the tax imposed under section 102, shall be credited with". Limit on foreign ta (b) LITrr ON CRETrr.- Section 131 (b) of the Internal Revenue redit. Ant, p. 56. Code (relating to the limit on foreign tax credit) is amended to read IR.. . 131 (b). as follows: "(b) LIMrr ON CREDTr. - The amount of the credit taken under this section shall be subject to each of the following limitations: "(1) The amount of the credit in respect of the tax paid or accrued to any country shall not exceed the same proportion of the tax against which such credit is taken, which the taxpayer's net income from sources within such country bears to his entire net income, in the case of a taxpayer other than a corporation, or to the normal-tax net income, in the case of a corporation, for the same taxable year; and "(2) The total amount of the credit shall not exceed the same proportion of the tax against which such credit is taken, which the taxpayer's net income from sources without the United States bears to his entire net income, in the case of a taxpayer other than a corporation, or to the normal-tax net income, in the case of a corporation, for the same taxable year." idiary, credit. Taieso oreignsub- (c) FOREIGN SUBSIDIARY.-Section 131 (f) of the Internal Revenue Are, p. 57.' Code (relating to credit for taxes of foreign subsidiary) is amended . R.C. 1131(. by striking out "entire net income" and inserting in lieu thereof "normal-tax net income". Tax exemption of certain Federal em- ployees'organizations. Ante, p. 33 . I.It. C.§101. Taxable years to which applicable. Employees' trusts. Ante, p. 67. I. R. C. 165. SEC. 217. EXEMPTION OF CERTAIN FEDERAL EMPLOYEES' ORGANI- ZATIONS. (a) Section 101 of the Internal Revenue Code (relating to exemp- tions from tax on corporations) is amended by adding at the end thereof the following new paragraph: "(19) Voluntary employees' beneficiary associations providing for the payment of life, sick, accident, or other benefits to the members of such association or their dependents or their desig- nated beneficiaries, if (A) admission to membership in such association is limited to individuals who are officers or employees of the United States Government, and (B) no -part of the net earnings of such association inures (other than through such payments) to the benefit of any private shareholder or individual." (b) The amendment made by this section shall be applicable to taxable years beginning after December 31, 1938. SEC. 218 . EMPLOYEES' TRUSTS. Section 165 of the Internal Revenue Code (relating to exemption from tax of certain trusts for the benefit of employees) is amended by inserting before the first paragraph "(a) ExErFTxON FROM 876 [53 STAT.

�