Page:United States Statutes at Large Volume 96 Part 1.djvu/493

 PUBLIC LAW 97-248—SEPT. 3, 1982

96 STAT. 451

foreign oil related income more rapidly than ratably over the 8-year period beginning with the first taxable year beginning after December 31, 1982. For purposes of the preceding sentence, an "old" section is such section as in effect on the day before the date of the enactment of this Act. SEC. 212. CURRENT TAXATION OF FOREIGN OIL RELATED INCOME OF CONTROLLED FOREIGN CORPORATIONS. (a) FOREIGN OIL RELATED INCOME ADDED TO CURRENTLY TAXED

AMOUNTS.—Subsection (a) of section 954 (defining foreign base com- 26 USC 954. pany income) is amended by adding at the end thereof the following new paragraph: "(5) the foreign bsise company oil related income for the taxable year (determined under subsection (h) and reduced as provided in subsection (b)(5))." (b) SPECIAL RULES.— (1) ALLOWANCE OF DEDUCTIONS AGAINST FOREIGN BASE COMPANY OIL RELATED INCOME.—Paragraph (5) of section 954(b)

is amended by striking out "and the foreign base company shipping income" and inserting in lieu thereof ", the foreign base company shipping income, and the foreign base company oil related income'. (2) PREEMPTION OF FOREIGN BASE COMPANY OIL RELATED

INCOME.—Subsection (b) of section 954 is amended by adding at the end thereof the following new paragraph: "(8) FOREIGN BASE COMPANY OIL RELATED INCOME NOT TREATED

AS ANOTHER KIND OF BASE COMPANY INCOME.—Income of a Corporation which is foreign base company oil related income shall not be considered foreign base company income of such corporation under paragraph (1), (2), or (3) of subsection (a)." (c) DEFINITION OF FOREIGN BASE COMPANY OIL RELATED INCOME.—

Section 954 (relating to foreign base company income) is amended by adding at the end thereof the following new subsection: "(h) FOREIGN BASE COMPANY OIL RELATED INCOME.—For purposes

of this section— "(1) IN GENERAL.—Except as otherwise provided in this subsection, the term 'foreign base company oil related income' means foreign oil related income (within the meaning of section 907(c)(2)) other than income derived from a source within a foreign country in connection with— "(A) oil or gas which was extracted from an oil or gas well located in such foreign country, or "(B) oil, gas, or a primary product of oil or gas which is sold by the foreign corporation or a related person for use or consumption within such country or is loaded in such country on a vessel or aircraft as fuel for such vessel or aircraft. "(2) PARAGRAPH (i) APPLIES ONLY WHERE CORPORATION HAS PRODUCED 1,000 BARRELS PER DAY OR MORE.—

"(A) IN GENERAL.—The term 'foreign base company oil related income' shall not include any income of a foreign corporation if such corporation is not a large oil producer for the taxable year. "(B) LARGE OIL PRODUCER.—For purposes of subparagraph

(A), the term 'large oil producer' means any corporation if, for the taxable year or for the preceding taxable year, the average daily production of foreign crude oil and natural

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