26 USC 970 - Reduction of subpart F income of export trade corporations

U.S Code last checked for updates: Nov 23, 2024

§ 970.

Reduction of subpart F income of export trade corporations

(a)

Export trade income constituting foreign base company income

(1)

In general

In the case of a controlled foreign corporation (as defined in section 957) which for the taxable year is an export trade corporation, the subpart F income (determined without regard to this subpart) of such corporation for such year shall be reduced by an amount equal to so much of the export trade income (as defined in section 971(b)) of such corporation for such year as constitutes foreign base company income (as defined in section 954), but only to the extent that such amount does not exceed whichever of the following amounts is the lesser:

(A)

an amount equal to 1½ times so much of the export promotion expenses (as defined in section 971(d)) of such corporation for such year as is properly allocable to the export trade income which constitutes foreign base company income of such corporation for such year, or

(B)

an amount equal to 10 percent of so much of the gross receipts for such year (or, in the case of gross receipts arising from commissions, fees, or other compensation for its services, so much of the gross amount upon the basis of which such commissions, fees, or other compensation is computed) accruing to such export trade corporation from the sale, installation, operation, maintenance, or use of property in respect of which such corporation derives export trade income as is properly allocable to the export trade income which constitutes foreign base company income of such corporation for such year.

The allocations with respect to export trade income which constitutes foreign base company income under subparagraphs (A) and (B) shall be made under regulations prescribed by the Secretary.

(2)

Overall limitation

[(b)

Repealed. Pub. L. 115–97, title I, § 14212(b)(5), Dec. 22, 2017, 131 Stat. 2217]

(c)

Investments in export trade assets

(1)

Amount of investments

(2)

Increase in investments in export trade assets

For purposes of subsection (a), the amount of increase in investments in export trade assets of any controlled foreign corporation for any taxable year is the amount by which—

(A)

the amount of such investments at the close of the taxable year, exceeds

(B)

the amount of such investments at the close of the preceding taxable year.

(3)

Decrease in investments in export trade assets

For purposes of subsection (b), the amount of decrease in investments in export trade assets of any controlled foreign corporation for any taxable year is the amount by which—

(A)

the amount of such investments at the close of the preceding taxable year (reduced by an amount equal to the amount of net loss sustained during the taxable year with respect to export trade assets), exceeds

(B)

the amount of such investments at the close of the taxable year.

(4)

Special rule

(Added Pub. L. 87–834, § 12(a), Oct. 16, 1962, 76 Stat. 1027; amended Pub. L. 94–455, title XIX, §§ 1901(b)(27)(A), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1799, 1834; Pub. L. 115–97, title I, § 14212(b)(5), Dec. 22, 2017, 131 Stat. 2217.)

cite as: 26 USC 970