FOREIGN TAX CREDIT FOR UNITED KINGDOM INCOME TAX PAID WITH RESPECT TO ROYALTIES, ETC.

SEC. 103. FOREIGN TAX CREDIT FOR UNITED KINGDOM INCOME TAX PAID WITH RESPECT TO ROYALTIES, ETC. (a) Credit Under 1939 Code.—Section 131 (e) of the Internal Revenue Code of 1939 (relating to the foreign tax credit) is hereby amended by adding at the end thereof the following new sentence: “For the purposes of this section, the recipient of a royalty or other amount paid or accrued as consideration for the use of, or for the privilege of using, copyrights, patents, designs, secret processes and formulas, trademarks, and other like property, and derived from sources within the United Kingdom of Great Britain and Northern Ireland, shall be deemed to have paid or accrued any income, war-profits, and excess-profits taxes paid or accrued to the United Kingdom with respect to such royalty or other amount (including the amount by which the payor’s United Kingdom tax was increased by inability to deduct such royalty or other amount) if such recipient elects to include in its gross income the amount of such United Kingdom tax.” (b) Credit Under 1954 Code.—Section 905 (b) of the Internal Revenue Code of 1954 is hereby amended by adding at the end thereof the following new sentence: “For purposes of this subpart, the recipient of a royalty or other amount paid or accrued as consideration for the use of, or for the privilege of using, copyrights, patents, designs, secret processes and formulas, trademarks, and other like property, and derived from sources within the United Kingdom of Great Britain and Northern Ireland, shall be deemed to have paid or accrued any income, war-profits and excess-profits taxes paid or accrued to the United Kingdom with respect to such royalty or other amount (including the amount by which the payor’s United Kingdom tax was increased by inability to deduct such royalty or other amount) if such recipient elects to include in its gross income the amount of such United Kingdom tax.” (c) Effective Date.—The amendment made by subsection (a) of this section shall apply for all taxable years beginning on or after January 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 shall apply with respect to taxable years beginning after December 31, 1953, and ending after August 16, 1954. No interest shall be allowed or paid on any overpayment resulting from the amendments made by subsections (a) and (b) of this section.