1096
PUBLIC LAW 761-SEPT. 1, 1954
[68 S T A T.
" (A) paid for services covered by an agreement entered into pursuant to paragraph (1) as would be wages if the services constituted employment, and " (B) as is reported to the Secretary or his delegate pursuant to the provisions of such agreement or of the regulations issued under this subsection, shall be considered wages subject to the taxes imposed by this chapter. "(7)
Ante, pp. 10521054, 1061.
Ante, p. 1090.
OVERPAYMENTS AND UNDERPAYMENTS.—
" (A) If more or less than the correct amount due under an agreement entered into pursuant to this subsection is paid with respect to any payment of remuneration, proper adjustments with respect to the amounts due under such agreement shall be made, without interest, in such manner and at such times as may be required by regulations prescribed by the Secretary or his delegate. " (B) If an overpayment cannot be adjusted under subparagraph (A), the amount thereof shall be paid by the Secretary or his delegate, through the Fiscal Service of the Treasury Department, but only if a claim for such overpayment is filed with the Secretary or his delegate within two years from the time such overpayment was made. "(8) DEFINITION OF FOREIGN SUBSIDIARY.—For purposes of this subsection and section 210(a) of the Social Security Act, a foreign subsidiary of a domestic corporation is— " (A) a foreign corporation more than 50 percent of the voting stock of which is owned by such domestic corporation; or " (B) a foreign corporation more than 50 percent of the voting stock of which is owned by the foreign corporation described in subparagraph (A). "(9) DOMESTICORPORATION AS SEPARATE ENTITY.—Each domestic corporation which enters into an agreement pursuant to paragraph (1) of this subsection shall, for purposes of this subsection and section 6413(c)(2)(C), relating to special refunds in the case of employees of certain foreign corporations, be considered an employer in its capacity as a party to such agreement separate and distinct from its identity as a person employing individuals on its own account. "(10) EEGULATIONS.—Regulations of the Secretary or his delegate to carry out the purposes of this subsection shall be designed to make the requirements imposed on domestic corporations with respect to services covered by an agreement entered into pursuant to this subsection the same, so far as practicable, as those imposed upon employers pursuant to this title with respect to the taxes imposed by this chapter." DEDUCTIONS FROM GROSS INCOME FOR PAYMENTS W I T H RESPECT TO EMPLOYEES OF CERTAIN FOREIGN CORPORATIONS
68A Stat. 67.
Ante, p. 1094.
SEC. 210. (a) The Internal Revenue Code of 1954 is amended by inserting after section 175 thereof the following new section: "SEC. 176. PAYMENTS WITH RESPECT TO EMPLOYEES OF CERTAIN FOREIGN CORPORATIONS. "In the case of a domestic corporation, there shall be allowed as a deduction amounts (to the extent not compensated for) paid or incurred pursuant to an agreement entered into under section 3121(1) with respect to services performed by United States citizens employed by foreign subsidiary corporations. Any reimbursement of any
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