98 STAT. 988
PUBLIC LAW 98-369—JULY 18, 1984 "(4) for engineering or architectural services for construction projects located (or proposed for location) outside the United States, or "(5) for the performance of managerial services for an unrelated FSC or DISC in furtherance of the production of foreign trading gross receipts described in paragraph (1), (2), or (3). Paragraph (5) shall not apply to a FSC for any taxable year unless at least 50 percent of its gross receipts for such taxable year is derived from activities described in paragraph (1), (2), or (3). "(b) FOREIGN MANAGEMENT AND FOREIGN ECONOMIC PROCESS REQUIREMENTS.—
"(1) IN GENERAL.—Except as provided in paragraph (2)— "(A) a FSC shall be treated as having foreign trading gross receipts for the taxable year only if the management of such corporation during such taxable year takes place outside the United States as required by subsection (c), and "(B) a FSC has foreign trading gross receipts from any transaction only if economic processes with respect to such transaction take place outside the United States as required by subsection (d). "(2) EXCEPTION FOR SMALL FSC.—
"(A) IN GENERAL.—Paragraph (1) shall not apply with respect to any small FSC. "(B) LIMITATION ON AMOUNT OF FOREIGN TRADING GROSS RECEIPTS OF SMALL FSC TAKEN INTO ACCOUNT.—
"(i) IN GENERAL.—Any foreign trading gross receipts of a small FSC for the taxable year which exceed $5,000,000 shall not be taken into account in determining the exempt foreign trade income of such corporation and shall not be taken into account under any other provision of this subpart. "(ii) ALLOCATION OF LIMITATION.—If the foreign trading gross receipts of a small FSC exceed the limitation of clause (i), the corporation may allocate such limitation among such gross receipts in such manner as it may select (at such time and in such manner as may be prescribed in regulations). "(iii) RECEIPTS OF CONTROLLED GROUP AGGREGATED.— For purposes of applying clauses (i) and (ii), all small FSC's which are members of the same controlled group of corporations shall be treated as a single corporation. "(iv) ALLOCATION OF LIMITATION AMONG MEMBERS OF CONTROLLED GROUP.—The limitation under clause (i)
shall be allocated among the foreign trading gross receipts of small FSC's which are members of the same controlled group of corporations in a manner provided in regulations prescribed by the Secretary. "(c) REQUIREMENT THAT FSC B E MANAGED OUTSIDE THE UNITED
STATES.—The management of a FSC meets the requirements of this subsection for the taxable year if— "(1) all meetings of the board of directors of the corporation, and all meetings of the shareholders of the corporation, are outside the United States, "(2) the principal bank account of the corporation is maintained outside the United States at all times during the taxable year, and
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