Page:United States Statutes at Large Volume 54 Part 1.djvu/1023

 54 STAT.] 76TH CONG. , 3D SESS.-CH. 757-OCT. 8, 1940 989 "SEC. 728. MEANING OF TERMS USED. "The terms used in this subchapter shall have the same meaning as 53 sat. 4 . when used in Chapter 1. V hi. C. pp "SEC. 729. LAWS APPLICABLE. "(a) GENERAL RULE. - Al l provisions of law (including penalties) applicable in respect of the taxes imposed by Chapter 1, shall, insofar as not inconsistent with this subchapter, be applicable in respect of the tax imposed by this subchapter. "(b) RETUmNS.- Notwithstanding subsection (a), no return under section 52 (a) shall be required to be filed by any taxpayer under this subchapter for any taxable year for which its excess profits net income, computed with the adjustments provided in section 711 (a) (2) and placed on an annual basis as provided in section 711 (a) (3), is not greater than $5,000. "(c) FOREIGN TAXES PAID.-In the application of section 131 for the purposes of this subchapter the tax paid or accrued to any country shall be deemed to be the amount of such tax reduced by the amount of the credit allowed with respect to such tax against the tax imposed by Chapter 1. "(d) LIMrrATIONS ON AMOUNT OF FOREIGN TAX CREDIT.-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 excess profits net income from sources within such country bears to its entire excess profits net income 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 excess profits net income from sources without the United States bears to its entire excess profits net income for the same taxable year. "SEC. 730. CONSOLIDATED RETURNS. "(a) PRIVILEGE TO FILE CONSOLIDATED RErtRnN. - An affiliated group of corporations shall, subject to the provisions of this section, have the privilege of making a consolidated return for the taxable year in lieu of separate returns. The making of a consolidated return shall be upon the condition that all the corporations which have been members of the affiliated group at any time during the taxable year for which the return is made consent to all the regulations under sub- section (b) prescribed prior to the last day prescribed by law for the filing of such return- and the making of a consolidated return shall be considered as such consent. In the case of a corporation which is a member of the affiliated group for a fractional part of the year the consolidated return shall include the income of such corporation for such part of the year as it is a member of the affiliated group. "(b) REGULATIONS. -The Commissioner, with the approval of the Secretary, shall prescribe such regulations as he may deem neces- sary in order that the tax liability of any affiliated group of cor- porations making a consolidated return and of each corporation in the group, both during and after the period of affiliation, may be returned, determined, computed, assessed, collected, and adjusted, in such manner as clearly to reflect the excess profits tax liability and the various factors necessary for the determination of such liability, and in order to prevent avoidance of such tax liability. General rule. Returns. 53 Stat. 27. 26 U. S. C., Supp. V, 52 (a). Ante, pp. 976, 977. Foreign taxes paid. 53 Stat. 56. 26 U. . C., Supp. V, §131. 53 Stat. 4. 26 U. S. C., Supp. V, ch. 1. Limitations on amount of foreign tax credit. Affiliated group of corporations. Regulations

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