Page:United States Statutes at Large Volume 78.djvu/871

 78 STAT. ]

PUBLIC LAW 88-563-SEPT. 2, 1964

" (B) For purposes of subparagraph (A) of paragraph (1), obligations of any other less developed country corporation shall be taken into account under section 955(c)(1)(B) (iii) without regard to the period remaining to maturity at the time of their acquisition. " (C) For purposes of subparagraph (B) of paragraph (1), deposits outside the United States (other than deposits in a less developed country) with persons carrying on the banking business, and income from such deposits, shall not be taken into account. "(3) APPLICABLE PERIODS.—The determinations required by

subparagraphs (A) and (B) of paragraph (1) shall be made (A) for the annual accounting period (if any) of the foreign corporation immediately preceding its accounting period in which the acquisition involved is made, (B) for the annual accounting period of the foreign corporation in which such acquisition is made, and (C) for the next succeeding annual accounting period of the foreign corporation. "(4)

SPECIAL RULES FOR TREATMENT or CORPORATIONS AS LESS

DEVELOPED COUNTRY CORPORATIONS.—A foreign Corporation shall be treated as satisfying the definition in paragraph (1) with respect to the acquisition by a United States person of stock or a debt obligation if— " (A) before the acquisition occurs (or, in the case of an acquisition occurring before or within 60 days after the date of the enactment of this chapter, pursuant to application made within such period following such date as may be prescribed by the Secretary or his delegate in regulations), it is established to the satisfaction of the Secretary or his delegate that such foreign corporation— " (i) has met the applicable requirements of paragraph (1) for the period (if any) referred to in paragraph (3)(A), and "(ii) may reasonably be expected to satisfy such requirements for the periods referred to in paragraphs (3)(B) and (C); or " (B) in the case of an acquisition occurring on or before December 10, 1963, the applicable requirements of paragraph (1) are met for the annual accounting period of the for e i ^ corporation immediately preceding its accounting period m which the acquisition occurred. "(5)

TREATMENT OF CORPORATIONS AS LESS DEVELOPED COUNTRY

CORPORATIONS IN OTHER CASES.—A foreign corporation may also be treated as satisfying the definition in paragraph (1) with respect to the acquisition by a United States person of stock or a debt obligation (but subject to possible subsequent liability for tax under subsection (d)(1)), if— " (A) such corporation has met the applicable requirements of paragraph (1) for the period (if any) referred to in paragraph (3)(A), and " (B) such person reasonably believes that such corporation will satisfy such requirements for the periods referred to in paragraphs (3)(B) and (C). "(d)

SUBSEQUENT LIABILITY FOR TAX I N CERTAIN CASES.— " (1) STOCK AND DEBT OBLIGATIONS OF CERTAIN CORPORATIONS.—

Where a foreign corporation is treated under subsection (c)(5) as satisfying the definition in subsection (c)(1) and the exclusion provided by subsection (a)(2) has applied with respect to the acquisition of stock or a debt obligation of such corporation by

829

76 sta^ ^10^13.

26 USC 955.

�