Page:United States Statutes at Large Volume 80 Part 1.djvu/1596

 1560

PUBLIC LAW 89-809-NOV. 13, 1966

[80 STAT.

(B) by striking out the period at the end of subparagraph (B) and inserting in lieu thereof ", and"', and (C) by inserting after subparagraph (B) the following new subparagraph: " (C) in the case of a foreign corporation all of the outstanding stock of which during the last half of the taxable year is owned by nonresident alien individuals (whether directly or indirectly through foreign estates, foreign trusts, foreign partnerships, or other foreign corporations), all items of income which would, but for this subparagraph, constitute personal holding company income under any paragraph of subsection (a) other than paragraph (7) thereof:" 68A Stat. 189. ^3^ Section 645 (relating to definition of undistributed personal holding company income) is amended— (A) by striking out subsection (a) and inserting in lieu thereof the following: " (a) DEFINITION.—For purposes of this part, the term 'undistributed personal holding company income' means the taxable income of a personal holding company adjusted in the manner provided in subsections (b), (c), and (d), minus the dividends paid deduction as defined in section 561. I n the case of a personal holding company which is a foreign corporation, not more than 10 percent in value of the outstanding stock of which is owned (within the meaning of sec76 Stat. 1018. (-Ion 958(a)) during the last half of the taxable year by United States persons, the term 'undistributed personal holding company income' means the amount determined by multiplying the undistributed personal holding company income (determined without regard to this sentence) by the percentage in value of its outstanding stock which is the greatest percentage in value of its outstanding stock so owned by United States persons on any one day during such period."; and (B) by adding at the end thereof the following new subsection: " (d) CERTAIN FOREIGN CORPORATIONS.—In the case of a foreign corporation all of the outstanding stock of which during the last half of the taxable year is owned by nonresident alien individuals (whether directly or indirectly through foreign estates, foreign trusts, foreign partnerships, or other foreign corporations), the taxable income for purposes of subsection (a) shall be the income which constitutes 78 Stat. 81. personal holding company income under section 543(a)(7), reduced by the deductions attributable to such income, and adjusted, with respect to such income, in the manner provided in subsection (b). " 26 USC 6671. (4)(A) Subchapter B of chapter 68 (relating to assessable penalties) is amended by adding at the end thereof the following new section: "SEC. 6683. FAILURE OF FOREIGN CORPORATION TO FILE RETURN OF PERSONAL HOLDING COMPANY TAX. "Any foreign corporation which— "(1) is a personal holding company for any taxable year, and " (2) fails to file or to cause to be filed with the Secretary or his delegate a true and accurate return of the tax imposed by section 541, shall, in addition to other penalties provided by law, pay a penalty 26 USC 1-1388. equal to 10 percent of the taxes imposed by chapter 1 (including the tax imposed by section 541) on such foreign corporation for such taxable year." (B) The table of sections for such subchapter B is amended by adding at the end thereof the following new item: "Sec. 6683. Failure of foreign corporation to file return of personal holding company tax."

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