FOREIGN BRIBES.

SEC. 1065. FOREIGN BRIBES. (a) Dental of Deferral.— (1) Controlled foreign corporations.— Section 952(a) (relating to general definition of subpart F income) is amended— (A) by striking out “and” at the end of paragraph (2), (B) by striking out the period at the end of paragraph (3) and inserting in lieu thereof a comma and the word “and”, and (C) by adding at the end thereof the following new paragraph: “(4) the sum of the amounts of any illegal bribes, kickbacks, or other payments (within the meaning of section 162(c)) paid by or on behalf of the corporation during the taxable year of 90 STAT. 1654the corporation directly or indirectly to an official, employee, or agent in fact of a government.” (2) DISC’s.— Subparagraph (D) of section 995(b)(1) (relating to distributions in qualified years) is amended— (A) by striking out “and” at the end of clause (i), (B) by adding at the end thereof the following new clause: “(iii) any illegal bribe, kickback, or other payment (within the meaning of section 162(c)) paid by or on behalf of the DISC directly or indirectly to an official, employee, or agent in fact of a government, and”. (b) Bribes Not To Reduce Foreign Earnings and Profits.— Section 964(a) (relating to earnings and profits of foreign corporations) is amended by adding at the end thereof the following sentence,: “In determining such earnings and profits, or the deficit in such earnings and profits, the amount of any illegal bribe, kick-back, or other payment (within the meaning of section 162(c)) shall not be taken into account to decrease such earnings and profits or to increase such deficit.”.