26 U.S.C. § 964 : US Code - Section 964: Miscellaneous provisions

Search 26 U.S.C. § 964 : US Code - Section 964: Miscellaneous provisions

(a) Earnings and profits
Except as provided in section 312(k)(4), for purposes of this
subpart, the earnings and profits of any foreign corporation, and
the deficit in earnings and profits of any foreign corporation, for
any taxable year shall be determined according to rules
substantially similar to those applicable to domestic corporations,
under regulations prescribed by the Secretary. In determining such
earnings and profits, or the deficit in such earnings and profits,
the amount of any illegal bribe, kickback, or other payment (within
the meaning of section 162(c)) shall not be taken into account to
decrease such earnings and profits or to increase such deficit. The
payments referred to in the preceding sentence are payments which
would be unlawful under the Foreign Corrupt Practices Act of 1977
if the payor were a United States person.
(b) Blocked foreign income
Under regulations prescribed by the Secretary, no part of the
earnings and profits of a controlled foreign corporation for any
taxable year shall be included in earnings and profits for purposes
of sections 952, 955, and 956, if it is established to the
satisfaction of the Secretary that such part could not have been
distributed by the controlled foreign corporation to United States
shareholders who own (within the meaning of section 958(a)) stock
of such controlled foreign corporation because of currency or other
restrictions or limitations imposed under the laws of any foreign
country.
(c) Records and accounts of United States shareholders
(1) Records and accounts to be maintained
The Secretary may by regulations require each person who is, or
has been, a United States shareholder of a controlled foreign
corporation to maintain such records and accounts as may be
prescribed by such regulations as necessary to carry out the
provisions of this subpart and subpart G.
(2) Two or more persons required to maintain or furnish the same
records and accounts with respect to the same foreign
corporation
Where, but for this paragraph, two or more United States
persons would be required to maintain or furnish the same records
and accounts as may by regulations be required under paragraph
(1) with respect to the same controlled foreign corporation for
the same period, the Secretary may by regulations provide that
the maintenance or furnishing of such records and accounts by
only one such person shall satisfy the requirements of paragraph
(1) for such other persons.
(d) Treatment of certain branches
(1) In general
For purposes of this chapter, section 6038, section 6046, and
such other provisions as may be specified in regulations -
(A) a qualified insurance branch of a controlled foreign
corporation shall be treated as a separate foreign corporation
created under the laws of the foreign country with respect to
which such branch qualifies under paragraph (2), and
(B) except as provided in regulations, any amount directly or
indirectly transferred or credited from such branch to one or
more other accounts of such controlled foreign corporation
shall be treated as a dividend paid to such controlled foreign
corporation.
(2) Qualified insurance branch
For purposes of paragraph (1), the term "qualified insurance
branch" means any branch of a controlled foreign corporation
which is licensed and predominantly engaged on a permanent basis
in the active conduct of an insurance business in a foreign
country if -
(A) separate books and accounts are maintained for such
branch,
(B) the principal place of business of such branch is in such
foreign country,
(C) such branch would be taxable under subchapter L if it
were a separate domestic corporation, and
(D) an election under this paragraph applies to such branch.
An election under this paragraph shall apply to the taxable year
for which made and all subsequent taxable years unless revoked
with the consent of the Secretary.
(3) Regulations
The Secretary shall prescribe such regulations as may be
necessary or appropriate to carry out the purposes of this
subsection.
(e) Gain on certain stock sales by controlled foreign corporations
treated as dividends
(1) In general
If a controlled foreign corporation sells or exchanges stock in
any other foreign corporation, gain recognized on such sale or
exchange shall be included in the gross income of such controlled
foreign corporation as a dividend to the same extent that it
would have been so included under section 1248(a) if such
controlled foreign corporation were a United States person. For
purposes of determining the amount which would have been so
includible, the determination of whether such other foreign
corporation was a controlled foreign corporation shall be made
without regard to the preceding sentence.
(2) Same country exception not applicable
Clause (i) of section 954(c)(3)(A) shall not apply to any
amount treated as a dividend by reason of paragraph (1).
(3) Clarification of deemed sales
For purposes of this subsection, a controlled foreign
corporation shall be treated as having sold or exchanged any
stock if, under any provision of this subtitle, such controlled
foreign corporation is treated as having gain from the sale or
exchange of such stock.