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TITLE 26-INTERNAL REVENUE CODE EFnEcTxv- DATE OF 1976 AMENDMENT Amendment of subsec. (b) by section 1901(a)(114) of Pub. L. 94-455 applicable with respect to taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94-455, set out as an Effective Date of 1976 Amendment note under section 2 of this title. EFrEcTIvE DATE OF 1958 AMENDMENT Section 103(c) of Pub. L. 95-866 provided that: "The amendment made by subsection (a) of this section [to section 131(e) of Internal Revenue Code of 1939] shall apply for all taxable years beginning on or after Janu- ary 1, 1950, as to which section 131 of the Internal Revenue Code of 1939 is the applicable provision. The amendment made by subsection (b) of this section [to subsec. (b) of this section] shall apply with respect to taxable years beginning after December 31, 1953, and ending after August 16, 1954. No interest shall be al- lowed or paid on any overpayment resulting from the amendments made by subsections (a) and b) of this section." SECTION REFEREM TO IN OTHER SECTIONS This section is referred to in sections 6040. 6213, 6501. 6504 of this title. § 906. Nonresident alien individuals and foreign cor- porations (a) Allowance of credit A nonresident alien individual or a foreign corporation engaged in trade or business within the United States during the taxable year shall be allowed a credit under section 901 for the amount of any income, war profits, and excess profits taxes paid or accrued during the taxable year (or deemed, under section 902, paid or ac- crued during the taxable year) to any foreign country or possession of the United States with respect to income effectively connected with the conduct of a trade or business within the United States. (b) Special rules (1) For purposes of subsection (a) and for purposes of determining the deductions al- lowable under sections 873(a) and 882(c), In determining the amount of any tax paid or accrued to any foreign country or possession there shall not be taken into account any amount of tax to the extent the tax so paid or accrued is imposed with respect to income from sources within the United States which would not be taxed by such foreign country or possession but fojkthe fact that- (A) in the case of a nonresident alien indi- vidual, such individual is a citizen or resi- dent of such foreign country or possession, or (B) in the case of a foreign corporation, such corporation was created or organized under the law of such foreign country or possession or is domiciled for tax purposes in such country or possession. (2) For purposes of subsection (a), In apply- ing section 904 the taxpayer's taxable income shall be treated as consisting only of the tax- able income effectively connected with the taxpayer's conduct of a trade or business within the United States. (3) The credit allowed pursuant to subsec- tion (a) shall not be allowed'against any tax imposed by section 871(a) (relating to income of nonresident alien individual not connected with United States business) or 881 (relating to income of foreign corporations not con- nected with United States business). (4) For purposes of sections 902(a) and 78, a foreign corporation choosing the benefits of this subpart which receives dividends shall, with respect to such dividends, be treated as a domestic corporation. (Added Pub. L. 89-809, title I, § 106(a)(1), Nov. 13, 1966, 80 Stat. 1568.) EFFECTIVE DATE Section applicable with respect to taxable years be- ginning after Dec. 31, 1966, and, in applying section 904 of this title with respect to this section, no amount to be carried from or to any taxable year beginning before Jan. 1, 1967, and no such year to be taken into account, see section 106(a)(6) of Pub. L. 89-809, set out as an Effective Date of 1966 Amendment note under section 874 of this title. SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 841, 874, 882, 901 of this title. § 907. Special rules in case of foreign oil and gas income (a) Reduction in amount allowed as foreign tax under section 901 In applying section 901, the amount of any oil and gas extraction taxes paid or accrued (or deemed to have been paid) during the taxable year with respect to foreign oil and gas extrac- tion income which would (but for this subsec- tion) be taken into account for purposes of sec- tion 901 shall be reduced by the amount (if any) by which the amount of such taxes ex- ceeds the product of- (1) the amount of the foreign oil and gas ex- traction income for the taxable year, multi- plied by (2) the percentage which is the sum of the normal tax rate and the surtax rate for the taxable year specified in section 11. (b) Application of section 904 limitation (1) Corporations In the case of a corporation, the provisions of section 904 shall be applied separately with respect to- (A) foreign oil related income, and (B) other taxable income. (2) Other taxpayers In the case of a taxpayer other than a cor- poration, the provisons of subsection (a) shall not apply and the provisions of section 904 shall be applied separately with respect to- (A) foreign oil and gas extraction income, and (B) other taxable income (including other foreign oil related income). (c) Foreign income definitions and special rules For purposes of this section- (1) Foreign oil and gas extraction income The term "foreign oil and gas extraction income" means the taxable income derived from sources without the United States and its possessions from- (A) the extraction (by the taxpayer or any other person) of minerals from oil or gas wells, or § 906 Page 586