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(b) Amount allowed. — Subject to the applicable limitation of (A) for purposes of subsections (a) (1) and (b) (1), the amount of its
section 904, the following amounts shall be allowed as the gains, profits, or income computed without reduction by the
credit under subsection (a): amount of the income, war profits, and excess profits taxes
imposed on or with respect to such profits or income by any
(a) Citizens and domestic corporations. — In the case of a foreign country. . . .; and
citizen of the United States and of a domestic
corporation, the amount of any income, war profits, and (B) for purposes of subsections (a) (2) and (b) (2), the amount of
excess profits taxes paid or accrued during the taxable its gains, profits, or income in excess of the income, war
year to any foreign country or to any possession of the profits, and excess profits taxes imposed on or with respect to
United States; and such profits or income.
xxx xxx xxx The Secretary or his delegate shall have full power to determine
from the accumulated profits of what year or years such dividends
Sec. 902. — Credit for corporate stockholders in foreign were paid, treating dividends paid in the first 20 days of any year
corporation. as having been paid from the accumulated profits of the preceding
year or years (unless to his satisfaction shows otherwise), and in
(A) Treatment of Taxes Paid by Foreign Corporation. — For other respects treating dividends as having been paid from the
purposes of this subject, a domestic corporation which owns most recently accumulated gains, profits, or earning
at least 10 percent of the voting stock of a foreign corporation
from which it receives dividends in any taxable year shall Amount (a)
— Amount (a), i.e., the amount of the dividend tax waived by the
Philippine government is arithmetically determined in the
xxx xxx xxx following manner:
P100.00
-35.00
———
P65.00 — Available for remittance as dividends to P&G-USA
Amount (b)
Amount (b), i.e., the amount of the "deemed paid" tax credit which
US tax law allows under Section 902, Tax Code, may be computed
arithmetically as follows:
Dividends actually
remitted by P&G-Phil.
to P&G-USA P55.25
——————— = ——— x P35.00 = P29.75 10
Amount of accumulated P65.00 ======