Page:United States Statutes at Large Volume 98 Part 1.djvu/709

 PUBLIC LAW 98-369—JULY 18, 1984 "(B) at least 20 percent of the gross income of such corporation is shown to the satisfaction of the Secretary to have been derived from sources within Guam or the Virgin Islands (as the case may be) for the 3-year period ending with the close of the preceding taxable year of such corporation (or for such part of such period as the corporation has been in existence).

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98 STAT. 661

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"(2) PARAGRAPH (i) NOT TO APPLY TO TAX IMPOSED IN GUAM.—



For purposes of applying this subsection with respect to income tax liability incurred to Guam— "(A) Paragraph (1) shall not apply, and "(B) for purposes of this section, the term 'foreign corporation' does not include a corporation created or organized in Guam or under the law of Guam.

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"(3) DEFINITIONS.— "(A) FOREIGN PERSON.—For purposes of paragraph (1), the

term 'foreign person' means any person other than— "(i) a United States person, or "(ii) a person who would be a United States person if references to the United States in section 7701 included Ki ij^A':- > references to a possession of the United States. "(B) INDIRECT OWNERSHIP RULES.—For purposes of paragraph (1), the rules of section 318(a)(2) shall apply except that '5 percent' shall be substituted for *50 percent' in subparagraph (C) thereof. 1

"(4) CROSS REFERENCE.—

"For tax imposed in the Virgin Islands, see sections 934 and 934A."

Co) WITHHOLDING OF TAX.—Subsection (c) of section 1442 (relating 26 USC 1442. to exception for Guam corporations) is amended to read as follows: "(c) EXCEPTION FOR CERTAIN GUAM AND VIRGIN ISLANDS CORPORATIONS.—

"(1) IN GENERAL.—For purposes of this section, the term 'foreign corporation' does not include a corporation created or organized in Guam or the Virgin Islands or under the law of Guam or the Virgin Islands if the requirements of subparagraphs (A) and (B) of section 881(b)(1) are met with respect to Ante, p. 660. such corporation. "(2) PARAGRAPH (i) NOT TO APPLY TO TAX IMPOSED IN GUAM.—

For purposes of applying this subsection with respect to income tax liability incurred to Guam— "(A) paragraph (1) shall not apply, and "(B) for purposes of this section, the term 'foreign corporation' does not include a corporation created or organized in Guam or under the law of Guam. "(3) CROSS REFERENCE.—

"For tax imposed in the Virgin Islands, see sections 934 and 934A."

(c) TECHNICAL AMENDMENT.—Subparagraph (B) of section 7651(5) 26 USC 7651. is amended by inserting "(other than section 881(b)(1))" after "For purposes of this title". (d) EFFECTIVE DATE.—The amendments made by this section shall 26 USC 881 note. apply to payments made after March 1, 1984, in taxable years ending after such date.

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