Exception for certain taxes paid by securities dealers
(A) In general
(A)In general#
Paragraphs (1) and (2) shall not apply to any qualified tax with respect to any security held in the active conduct in a foreign country of a business as a securities dealer of any person—
(i) who is registered as a securities broker or dealer under section 15(a) of the Securities Exchange Act of 1934,
(ii) who is registered as a Government securities broker or dealer under section 15C(a) of such Act, or
(iii) who is licensed or authorized in such foreign country to conduct securities activities in such country and is subject to bona fide regulation by a securities regulating authority of such country.
(A)(i)#
who is registered as a securities broker or dealer under section 15(a) of the Securities Exchange Act of 1934,
(A)(ii)#
who is registered as a Government securities broker or dealer under section 15C(a) of such Act, or
(A)(iii)#
who is licensed or authorized in such foreign country to conduct securities activities in such country and is subject to bona fide regulation by a securities regulating authority of such country.
(B)Qualified tax#
For purposes of subparagraph (A), the term “qualified tax” means a tax paid to a foreign country (other than the foreign country referred to in subparagraph (A)) if—
(i) the dividend to which such tax is attributable is subject to taxation on a net basis by the country referred to in subparagraph (A), and
(ii) such country allows a credit against its net basis tax for the full amount of the tax paid to such other foreign country.
(B)(i)#
the dividend to which such tax is attributable is subject to taxation on a net basis by the country referred to in subparagraph (A), and
(B)(ii)#
such country allows a credit against its net basis tax for the full amount of the tax paid to such other foreign country.
(C)Regulations#
The Secretary may prescribe such regulations as may be appropriate to carry out this paragraph, including regulations to prevent the abuse of the exception provided by this paragraph and to treat other taxes as qualified taxes.