PUBLIC LAWS-CH. 757-OCT. 8 , 1940 Amount of excess profits credit. Domestic corpora- tions. Foreign corpora- tions. Average base period net income. Ante, p. 977. Post, p. 985. "SEC. 713. EXCESS PROFITS CREDIT-BASED ON INCOME. "(a) AMOUNT OF ExcEss PROFITS CREDrr.-T he excess profits credit for any taxable year, computed under this section, shall be- "(1) DoMrslIc conRPoRTIoNs.- In the case of a domestic cor- poration- "(A) 95 per centum of the average base period net income, as defined in subsection (b), "(B) Plus 8 per centum of the net capital addition as defined in subsection (c), or "(C) Minus 6 per centum of the net capital reduction as defined in subsection (c). "(2) FOREIGN CORPORATIONS. -In the case of a foreign corpora- tion, 95 per centum of the average base period net income. "(b) AVERAoE BASE PERIOD NET INCOME.- For the purposes of this section the average base period net income of the taxpayer shall be determined as follows: "(1) By computing the aggregate of the excess profits net income for each of the taxable years of the taxpayer beginning after December 31, 1935, and before January 1, 1940, reduced, in the case of each such taxable year in which the deductions plus the credit for dividends received exceeded the gross income, by the amount attributable to such excess under paragraph (4); "(2) By dividing the amount ascertained under paragraph (1) by the total number of months in all such taxable years; and "(3) By multiplying the amount ascertained under paragraph (2) by twelve. (4) For the purposes of paragraph (1)- "(A) In determining whether, for any taxable year, the deductions plus the credit for dividends received exceeded the gross income, and in determining the amount of such excess, the adjustments provided in section 711 (b) (1) shall be made; and "(B) The amount attributable to any taxable year in which there is such an excess shall be the amount of such excess, except that such amount shall be zero if there is only one such year, or, if more than one, shall be zero for the year in which such excess is the greatest. "(5) For the purposes of paragraph (1), if the taxpayer was in existence during only part of the 48 months preceding the beginning of its first taxable year under this subchapter (herein- after in this paragraph called 'base period'), its excess profits net income- "(A) for each taxable year of twelve months (beginning with the beginning of such base period) during which it was not in existence, shall be an amount equal to 8 per centum of the excess of- "(i) the daily invested capital for the first day of the taxpayer's first taxable year beginning after December 31, 1939, over "(ii) an amount equal to the same percentage of such daily invested capital as is applicable under section 720 in reduction of the average invested capital of the pre- ceding taxable year; "(B) for the taxable year of less than twelve months con- sisting of that part of the remainder of the base period dur- ing which it was not in existence, shall be the amount ascer- tamed for a full year under subparagraph (A), multiplied by the number of days in such taxable year of less than 980 [54 STAT.
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