Page:United States Statutes at Large Volume 98 Part 1.djvu/698

 98 STAT. 650

PUBLIC LAW 98-369—JULY 18, 1984 "(5) SECRETARY MAY PROVIDE SUBSECTION N O T TO APPLY I N CASES OF INADEQUATE INFORMATION EXCHANGE.—

i'

"(A) IN GENERAL.—If the Secretary determines that the exchange of information between the United States and a foreign country is inadequate to prevent evasion of the United States income tax by United States persons, the Secretary may provide in writing (and publish a statement) that the provisions of this subsection shall not apply to payments of interest to any person within such foreign country (or payments addressed to, or for the account of, persons within such foreign country) during the period— "(i) beginning on the date specified by the Secretary, and "(ii) ending on the date that the Secretary determines that the exchange of information between the United States and the foreign country is adequate to prevent the evasion of United States income tax by United States persons. "(B)

>

26 USC 871.

EXCEPTION FOR CERTAIN

OBLIGATIONS.—Subpara-

graph (A) shall not apply to the payment of interest on any obligation which is issued on or before the date of the publication of the Secretary's determination under such subparagraph. "(6) REGISTERED FORM.—For purposes of this subsection, the term 'registered form' has the same meaning given such term by section 163(f).". (2) CONFORMING AMENDMENT.—Paragraph (1) of section 871(a) (relating to tax on income other than capital gains) is amended by striking out "There" and inserting in lieu thereof "Except as provided in subsection (i), there", (b) FOREIGN CORPORATIONS.—

26 USC 881. Post, p. 654.

(1) IN GENERAL.—Section 881 (relating to tax on income of foreign corporations not connected with United States business), as amended by this Act, is amended by redesignating subsection (c) as subsection (d) and by adding after subsection (b) the following new subsection: "(c) REPEAL OF TAX ON INTEREST OF FOREIGN CORPORATIONS RECEIVED FROM CERTAIN PORTFOUO DEBT INVESTMENTS.—

"(1) IN GENERAL.—In the case of any portfolio interest received by a foreign corporation from sources within the United States, no tax shall be imposed under paragraph (1) or (3) of subsection (a). "(2) PORTFOUO INTEREST.—For purposes of this subsection, the term 'portfolio interest' means any interest (including original issue discount) which is described in any of the following subparagraphs: "(A) CERTAIN OBLIGATIONS WHICH ARE NOT REGISTERED.—

Ante, p. 648.

Ante, p. 648.

Interest which is paid on any obligation which is described in section 871(h)(2)(A). "(B) CERTAIN REGISTERED OBLIGATIONS.—Interest which is paid on an obligation— "(i) which is in registered form, and "(ii) with respect to which the person who would otherwise be required to deduct and withhold tax from such interest under section 1442(a) has received a statement which meets the requirements of section 871(h)(4)

�