Page:United States Statutes at Large Volume 80 Part 1.djvu/1591

 80 STAT.]

PUBLIC LAW 89-809-NOV. 13, 1966

1555

(n) EFFECTIVE DATES.—

(1) The amendments made by this section (other than the amendments made by subsections (h), (i), and (k)) shall apply with respect to taxable years beginning after December 31, 1966. (2) The amendments made by subsection (h) shall apply with respect to payments made in taxable years.of recipients begmning after December 31, 1966. (3) The amendments made by subsection (i) shall apply with respect to payments occurring after December 31, 1966. (4) The amendments made by subsection (k) shall apply with respect to remuneration paid after December 31, 1966. SEC. 104. FOREIGN CORPORATIONS. (a) TAX ON INCOME NOT CONNECTED W I T H UNITED STATES BUSI-

NESS.—Section 881 (relating to tax on foreign corporations not engaged in business in the United States) is amended to read as follows:

68A Stat. 282.

"SEC. 881, TAX ON INCOME OF FOREIGN CORPORATIONS NOT CONNECTED WITH UNITED STATES BUSINESS. " (a) IMPOSITION OF TAX.—There is hereby imposed for each tax-

able year a tax of 30 percent of the amount received from sources within the United States by a foreign corporation as— "(1) interest, dividends, rents, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, and other fixed or determinable annual or periodical gains, profits, and income, "(2) gains described in section 631(b) or (c), "(3) in the case of bonds or other evidences of indebtedness issued after September 28, 1965, amounts which under section 1232 are considered as gains from the sale or exchange of property which is not a capital asset, and "(4) gains from the sale or exchange after October 4, 1966, of patents, copyrights, secret processes and formulas, good will, trademarks, trade brands, franchises, and other like property, or of any interest in any such property, to the extent such gains are from payments which are contingent on the productivity, use, or disposition of the property or interest sold or exchanged, or from payments which are treated as being so contingent under section 871(e), but only to the extent the amount so received is not effectively connected with the conduct of a trade or business within the United States.

Ante, p. 1547.

" (b) DOUBLING OF TAX.— "For doubling of tax on corporations of certain foreign countries, see section 891." (b) TAX ON INCOME CONNECTED W I T H UNITED STATES BUSINESS.—

(1) Section 882 (relating to tax on resident foreign corporations) is amended to read as follows: "SEC. 882. TAX ON INCOME OF FOREIGN CORPORATIONS CONNECTED WITH UNITED STATES BUSINESS. " (a) NORMAL T A X AND S U R T A X. — " (1) IMPOSITION OF TAX.—A foreign corporation engaged in

trade or business within the United States during the taxable year shall be taxable as provided in section 11 or 1201(a) on its taxable income which is effectively connected with the conduct of a trade or business within the United States. "(2) DETERMINATION OF TAXABLE INCOME.—In determining taxable income for purposes of paragraph (1), gross income includes only gross income which is effectively connected with the conduct of a trade or business within the United States. " (b) GROSS INCOME.—In the case of a foreign corporation, gross income includes only—

Post, p. 1557.

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