78 STAT. ]
809
PUBLIC LAW 88-563-SEPT. 2, 1964
P u b l i c Law 88-563 AN ACT September 2, 1964 [H. R. 8000] To amend the Internal Revenue Code of 1954 to impose a tax on acquisitions of certain foreign securities in order to equalize costs of longer-term financing in the United States and in markets abroad, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, Interest EqualSECTION 1. SHORT TITLE, ETC. ization Tax Act. (a) S H O R T T I T I J S. — T h i s Act may be cited as the " I n t e r e s t E q u a l i zation T a x Act ". (b) AMENDMENT OF 1954 C O D E. — E x c e p t as other w i s e expressly provided, w h e n e v e r i n t h i s Act a n amendment is expressed in term s of a n amendment to a section o r other provision, the reference shall be considered to be m a d e to a section or other p r o v i s i o n of the 68A Stat. 3. I n t e r n a l Revenue Code of 1954. SEC. 2. INTEREST EQUALIZATION TAX. (a) IMPOSITION OF T A X. — S u b title D ( r e l a t i n g to miscellaneous excise tax e s) is amended by a d d i n g a t the e n d thereof the following new chapter:
26 USC 1 et seq.
'CHAPTER 41—INTEREST EQUALIZATION TAX "SUBCHAPTER A. Acquisitions of foreign stock and debt obligations. "SUBCHAPTER B. Acquisitions by commercial banks.
"Subchapter A—Acquisitions of Foreign Stock and Debt Obligations "Sec. "Sec. "Sec. "Sec. "Sec. "Sec. "Sec.
4911. Imposition of tax. 4912. Acquisitions. 4913. Limitation on tax on certain acquisitions. 4914. Exclusion for certain acquisitions. 4915. Exclusion for direct investments. 4916. Exclusion for investments in less developed countries. 4917. Exclusion for original or new issues where required for international monetary stability. "Sec. 4918. Exemption for prior American ownership. "Sec. 4919. Sales by underwriters and dealers to foreign persons. "Sec, 4920. Definitions and special rules. "SEC. 4911. IMPOSITION OF TAX. " (a) IN GENERAL. — The r e is hereby imposed, on each acquisition by a United States p e r s o n ( a s defined i n section 4 9 2 0 (a)(4)) of stock of a foreign issuer, o r of a debt obligation of a foreign obligor (if such obligation has a period r e m a i n i n g to m a t u r i t y of 3 year s o r more), a tax determined under subsection ( b j. "(b)
A M O U N T OF T A X. —
" (1) S TO C K. — The tax imposed by subsection (a) on the acquisition of stock shall b e equal to 15 p e r c e n t of the a c t u a l v a l u e of the stock. "(2)
D E B TO B L I G A T I O N S. — The tax i m p o s e d by subsection
(a)
on the acquisition of a debt obligation shall be equal to a percenta g e of the a c t u a l v a l u e of the debt o b l i g a t i o n m e a s u r e d by the
Post, p. 837.
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