Section 1
SECTION 1. Section 24 (c) of the National Internal Revenue Code is hereby amended to read as follows: "(c) Rate of tax on certain dividends. Dividends received by a domestic or resident foreign corporation from a domestic corporation liable to tax under this Code— shall be subject to a final tax at 10% on the total amount thereof, which shall be collected and paid as provided in Sections 53 and 54 of this Code, and shall not be included in the determination of the gross income of the recipient corporation: Provided, however, That interest paid or incurred on indebtedness abroad by a domestic or resident foreign corporation, which indebtedness was incurred to provide funds for investment in a domestic corporation shall be allowed as a deduction from the intercorporate dividends before computing the 10% final tax. Any excess of the interest herein allowed as deduction from intercorporate dividends may be deducted from the other gross income of the recipient corporation, subject to the provisions of Section 30(b) of this Code. "The above deduction of interest from intercorporate dividends shall be allowed only if the recipient domestic or resident foreign corporation submits an authenticated copy of the foreign loan-agreement stipulating the end-use of the loan proceeds and such other information as may be required for its determination. "The Secretary of Finance, upon recommendation of the Commissioner of Internal Revenue, shall promulgate rules and regulations to implement the provisions of this paragraph."