Page:United States Statutes at Large Volume 94 Part 3.djvu/863

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PUBLIC LAW 96-000—MMMM. DD, 1980

PUBLIC LAW 96-603—DEC. 28, 1980

94 STAT. 3507

"(D) changes in the interest rate under subsection (g)(3)(B), and "(E) such other factors as may be prescribed by regulations. "(d) AMOUNTS TAKEN INTO ACCOUNT MUST B E CONSISTENT WITH AMOUNTS ALLOWED UNDER FOREIGN LAW.— "(1) GENERAL RULE.—In the case of any plan, the amount

allowed as a deduction under subsection (a) for any taxable year shall equal— "(A) the lesser of— "(i) the cumulative United States amount, or "(ii) the cumulative foreign amount, reduced by "(B) the aggregate amount determined under this section for all prior taxable years. "(2) CUMULATIVE AMOUNTS DEFINED.—For purposes of paragraph (D— "(A) CUMULATIVE UNITED STATES AMOUNT.—The term 'cumulative United States amount' means the aggregate amount determined with respect to the plan under this section for the taxable year and for all prior taxable years to which this section applies. Such determination shall be made for each taxable year without regard to the application of paragraph (1). "(B) CUMULATIVE FOREIGN AMOUNT.—The term 'cumulative foreign amount' means the aggregate amount allowed as a deduction under the appropriate foreign tax laws for the taxable year and all prior taxable years to which this section applies. "(3) EFFECT ON EARNINGS AND PROFITS, ETC.—In determining the earnings and profits and accumulated profits of any foreign corporation with respect to a qualified foreign plan, the amount determined under paragraph (1) with respect to any plan for any taxable year shall in no event exceed the amount allowed as a deduction under the appropriate foreign tax laws for such taxable year. "(e) QUALIFIED FOREIGN PLAN.—For purposes of this section, the term 'qualified foreign plan' means any written plan of an employer for deferring the receipt of compensation but only if— "(1) such plan is for the exclusive benefit of the employer's employees or their beneficiaries, "(2) 90 percent or more of the amounts taken into account for the taxable year under the plan are attributable to services— "(A) performed by nonresident aliens, and "(B) the compensation for which is not subject to tax under this chapter, and "(3) the employer elects (at such time and in such manner as the Secretary shall by regulations prescribe) to have this section apply to such plan. "(f) FUNDED AND RESERVE PLANS.—For purposes of this section— "(1) QUALIFIED FUNDED PLAN.—The term 'qualified funded plan' means a qualified foreign plan which is not a qualified reserve plan. "(2) QUALIFIED RESERVE PLAN.—The term 'qualified reserve plan' means a qualified foreign plan with respect to which an election made by the taxpayer is in effect for the taxable year. An election under the preceding sentence shall be made in such manner and form as the Secretary may by regulations prescribe