60
ye^st^t^'s'ig^g^ae 26 USC 404,
PUBLIC LAW 88-272-FEB. 26, 1964
[78 STAT.
"(2) there shall be allowed as a deduction to the foreign subsidiary of which such individual is an employee an amount equal to the amount which (but for paragraph (1)) would be deductible under section 404 (or section 405(c)) hj the domestic corporation if he were an employee of the domestic corporation,
-•OS.
and
"(3) any reference to compensation shall be considered to be a reference to the total compensation of such individual (determined with the application of subsection (b)(2)). Any amount deductible by a foreign subsidiary under this subsection shall be deductible for its taxable year %vith or within which the taxable year of such domestic corporation ends. "(e)
2^ ^^^'^2. 26 USC 101. 26 USC 2039. 72 Stat. 1659.
TREATMENT AS EMPLOYEE UNDER EELATED PROVISIONS.—An
individual who is treated as an employee of a domestic corporation under subsection (a) shall also be treated as an employee of such domestic corporation, with respect to the plan described in subsection (a)(2), for purposes of applying the following provisions of this title: «^2) Section 72(d) (relating to employees* annuities). "(2) Section 72(f) (relating to special rules for computing employees' contributions). u(3) Section 101(b) (relating to employees' death benefits). «(4) Section 2039 (relating to annuities). «(5) Section 2517 (relating to certain annuities under (lualitied 1 ^ <-,.
26 USC 2517.
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plans). (b)
26 USC 401-405. Ante, p. 58.
EMPLOYEES OF DOMESTIC SUBSIDIARIES EN(iA(iED IN Bi SINESS QuTSiDE THE UNITED STATES.—Part I of subchapter I) of chapter 1
(relating to pension, profit-sharing, stock bonus plans, etc.) is amended by adding after section 406 (as added by subsection (a)) the following new section: "SEC. 407, CERTAIN EMPLOYEES OF DOMESTIC SUBSIDIARIES ENGAGED IN BUSINESS OUTSIDE THE UNITED STATES. (a) TREATMENT AS EMPLOYEES OF DOMESTIC PARENT CORPORATION.—
"'(1) I N (JENERAL.—For purposes of applying this part with respect to a pension, profit-sharing, or stock bonus plan described in section 401(a), an annuity plan described in section 403(a), or a bond purchase plan described in section 405(a), of a domestic parent corporation, an individual who is a citizen of the United States and who is an employee of a domestic subsidiary (within the meaning of paragraph (2)) of such domestic parent corporation shall be treated as an employee of such domestic parent corporation, if— " (A) the plan of such domestic parent corporation expressly provides for contributions or benefits for individuals who are citizens of the United States and who are employees of its domestic subsidiaries; and " (B) contributions under a funded plan of deferred compensation (whether or not a plan described in section 401(a), 403(a), or 405(a)) are not provided by any other person with respect to the remuneration paid to such individual by the domestic subsidiary. '• (2) DEFINITIONS.—For purposes of this section—
- '(A) DOMESTIC SUBSIDLVRY.—A corporation shall be
treated as a domestic subsidiary for any taxable year onlv if— "(i) such corporation is a domestic corporation 80 percent or more of the outstanding voting stock of which is owned by another domestic corporation;
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