Rev. Rul. 71-342

The Internal Revenue Service has issued ruling letters to a number of foreign corporations holding certain classes of their stock exempt from the interest equalization tax, pursuant to section 4920(b) (formerly 4920(a)(8)) of the Internal Revenue Code of 1954. This Revenue Ruling contains a list of foreign corporations that as of May 21, 1971, have received such letters and updates the list previously published in Revenue Ruling 71-17, C.B. 1971-1, 389.

The classes of stock of such foreign corporations that satisfy the requirements of section 4920(b) of the Code are treated not as foreign stock issues but as domestic issues. Accordingly, United States persons that acquire shares of such a class of stock are not subject to the interest equalization tax.

These ruling letters exempt only those shares included in the term "class of stock" as defined in section 4920(b)(2) of the Code. The term "class of stock" means all shares of stock of a corporation issued and outstanding as of the corporation's latest record date before July 19, 1963, which are identical with respect to rights and interests such shares represent in the control, profits, and assets of the corporation. The term also includes additional shares possessing rights and interests identical with the rights and interests of shares described in the preceding sentence if such additional shares have been (1) issued on or before November 10, 1964; (2) issued after November 10, 1964, pursuant to a written commitment made by such corporation on or before such date; (3) issued after November 10, 1964, to a shareholder with respect to or in exchange solely for shares described in this paragraph; or (4) issued in accordance with section 4920(b)(2)(D) of the Code.

Some corporations receiving ruling letters under section 4920(b) of the Code have issued shares of stock which, although similar to the exempt class, do not qualify for the exemption. In such cases, in order that the previously issued ruling letter not be adversely affected, the Service has specified that nonqualifying shares are to be identified by a legend on the stock certificate by which they can easily be distinguished from the exempt class of stock.

Corporations issuing both exempt stock and similar stock which does not qualify as part of the exempt class of stock (so-called legend stock) are listed separately below. Since this list of corporations issuing nonqualifying legend shares may be modified from time to time, United States persons should ascertain before acquisition of shares of stock of any such listed corporations whether the shares are exempt or non-exempt.

From time to time other lists will be published to include those corporations which have received rulings during the period subsequent to this Revenue Ruling.

The corporations listed below have received ruling letters under section 4920(b) of the Code holding that the class of stock described for each corporation is exempt from the interest equalization tax:

Alcan Aluminum Limited (formerly Aluminum Limited)--common stock without nominal or par value.

Alliance Tire & Rubber Co., Ltd.--class A stock.

Allied-Roxana Minerals Ltd.--common stock with nominal par value.

Alscope Consolidated Ltd.--common capital stock.

Asamera Oil Corp., Ltd.--common capital stock.

Avco Delta Corp. Canada Ltd. (formerly Delta Acceptance Corp., Ltd.)--first preference share $100 par value, series B 51/2 percent cumulative redeemable sinking fund shares; second preference shares $100 par value, series A 51/2 percent cumulative convertible shares and common stock no par value.

Beauty Counselors of Canada, Ltd.--common stock without par value issued prior to November 10, 1964.

Blue Crown Petroleums Ltd.--common stock.

Brilund Mines Ltd.--common stock.

British-American Insurance Co., Ltd.--common stock.

Cabol Enterprises Ltd.--common stock without par value.

Calgary & Edmonton Corp., Ltd. (The)--capital stock without nominal or par value.

Canada Costa Rica Mines Ltd.--common stock, par value $1.

Canada Southern Petroleum Ltd.--capital stock and voting trust certificates relating thereto.

Canada Southern Railway Co.--common stock.

Canadian Export Gas & Oil Ltd.--common stock.

Canadian Homestead Oils Ltd.--common stock.

Canadian Javelin Ltd.--common stock without par value.

Canadian Superior Oil Ltd.--common stock with $1 par value.

Canadian Westinghouse Co., Ltd.--common stock without nominal or par value.

Canvil, Ltd.--common stock.

Chemalloy Minerals Ltd.--common stock, par value $1.

Columbia Cellulos Co., Ltd.--common stock without nominal or par value.

Consolidated Marbenor Mines Ltd.--common stock.

Consolidated Panther Mines Ltd.--common stock.

Continental Research & Development Ltd.--common stock.

Crow's Nest Industries Ltd.--common stock (formerly Crow's Nest Pass Coal Co., Ltd.).

Dome Mines Ltd.--stock without nominal or par value.

Dome Petroleum Ltd.--common stock, par value $2.50. Elite Cobalt Mines Ltd.--common stock.

Exquisite Form Brassiere (Canada Limited)--common shares no par value.

Fargo Oils Ltd.--common stock, par value $1.

Ford Motor Co. of Canada Ltd.--common stock without par value.

Fruehauf Trailer Co. of Canada Ltd.--common stock without nominal or par value.

Glen Lake Silver Mines Ltd.--common stock.

Wm. Gluckin Co., Ltd.--5 percent convertible preferred stock and common stock, each par value one pound.

Golden Age Mines Ltd.--common stock (no par value).

Goodyear Tire & Rubber Co. of Canada Ltd. (The)--common stock.

Granby Mining Co. Ltd.--common stock.

Greyhound Lines of Canada Ltd.--common stock.

Hudson's Bay Oil & Gas Co. Ltd.--capital stock par value of $2.50.

Imperial Oil Ltd.--capital stock, without nominal or par value.

Indian Mountain Metal Mines, Ltd.--common stock.

Initiative Explorations Ltd.--common stock.

International Nickel Co. of Canada Ltd. (The)--common stock without nominal or par value.

James A. Lewis Engineering Co. Ltd.--common stock.

Jefferson Lake Petrochemicals of Canada Ltd.--common stock.

Jenkins Bros. Ltd.--common stock.

Kardar Canadian Oils Ltd.--common stock.

Magellan Petroleum Corp.--common capital stock par value $0.01 and voting trust certificates relating thereto.

Monarch Fine Food Ltd.--common stock without par value.

Murphy Oil Company Ltd.--common stock.

National Malartic Gold Mines Ltd.--common stock.

National Petroleum Corp., Ltd.--capital stock, par value $0.25. ¹ New Cayzor Athabaska Mines Ltd. (formerly Cayzor Athabaska Mines Ltd.)--common stock.

North Canadian Oils Ltd.--common stock, par value $0.25.

Northwest Nitro-Chemicals, Ltd.--common stock.

O'Okiep Copper Co., Ltd.--ordinary shares, par value 1 Rand.

Orofino-Mines Ltd.--common stock.

Pago Mining Ltd.--capital stock without par value.

Pancoastal Petroleum Ltd.--common capital stock and voting trust certificates relating thereto.

Pantepec Oil Co., C.A.--capital stock par value one bolivar.

Peel-Elder Ltd.--capital stock of no par value.

Peruvian Oils & Minerals, Ltd.--capital stock.

Phoenix Canada Oil Co., Ltd.--common stock.

Pompey Oil & Minerals Co., Ltd.--common stock.

Prairie Oil Royalties Co., Ltd.--capital stock.

Reeves MacDonald Mines Ltd.--common stock.

Sailfish Sports Craft Ltd.--common stock.

Schlumberger Ltd.--common stock.

Scott Paper Ltd.--common stock without nominal or par value.

Scurry-Rainbow Oil Ltd.--common stock.

Silver Ridge Mining Co., Ltd.--common stock.

Snowdrift Base Metal Mines Ltd.--common stock.

Stanrock Uranium Mines Ltd.--common stock.

St. John d'el Rey Mining Co., Ltd.--shares of ordinary stock.

Syntex Corp.--common stock.

TACA International Airlines S.A.--common stock $0.10 par value.

Teledyne Canada, Ltd. (formerly Vascan Ltd., which formerly was Vanadium-Alloys Steel Canada Ltd.)--common stock, no par value.

Texaco Canada Ltd.--common stock without nominal or par value. Tropical Gas Co., Inc.--common stock and preferred.

Union Carbide Canada Ltd.--common stock without nominal or par value.

Union Oil Co. of Canada Ltd.--common stock.

United Asbestos Corp. Ltd.--capital stock $1 par value.

United Canso Oil & Gas Ltd.--capital stock, par value $1 and voting trust certificate relating thereto.

Western Heritage Properties Ltd.--common stock.

The corporations listed below have received ruling letters holding that the described class or classes of their stock are exempt under section 4920(b) of the Code, but have subsequently issued additional shares which are not exempt, even though they are similar in rights and interest to the exempt shares:

Atlas Consolidated Mining & Developing Corp.--common stock.

Banff Oil Ltd.--common stock and preferred stock. (Corporation underwent voluntary liquidation on December 2, 1970. Acquisition after such date of such "stock" may be subject to tax, unless another statutory exclusion or exemption applies.)

Canadian Curtiss-Wright Ltd.--capital stock.

Coastal Caribbean Oils & Minerals Ltd.--capital stock, par value 1 shilling and voting trust certificates relating thereto.

Molybdenite Corp. of Canada, Ltd.--common stock with par value $5 (formerly common stock with par value $1.).

Murky Fault Metal Mines Ltd.--common stock.

Pacific Petroleums Ltd.--common stock par value $1.

Tashota Nipigon Mines Ltd.--common stock.

Warner Bros. Seven Arts Ltd. (formerly Seven Arts Productions Ltd.)--common shares without par value.

The stock certificates representing the nonexempt shares should in each case be marked with distinguishing legend.

"Surluga Gold Mines Limited--common stock," "Husky Oil Canada Limited--common stock," and "MacDonald Mines Limited--common stock" were previously deleted from lists published in prior Revenue Rulings. However, if a United States person can establish that his acquisition of shares of common stock of Surluga Gold Mines Limited or Husky Oil Canada Limited are shares which meet the requirements of section 4920(b) of the Code, such an acquisition will not be subject to the interest equalization tax.

Under the provisions of section 7805(b) of the Code, interest equalization tax will not be imposed upon United States persons with respect to shares of common stock of MacDonald Mines Limited acquired by them prior to the close of August 19, 1968. Furthermore, for purposes of a subsequent acquisition of common stock of MacDonald Mines Limited (i.e., after August 19, 1968) by another United States person, any United States person who acquired such stock prior to the close of August 19, 1968, will be considered to have acquired such stock without liability for payment of such tax within the meaning of section 4918(a)-(2)(B) of the Code.

Revenue Ruling 71-17 is hereby superseded.

¹ This corporation was reinstated by a favorable ruling issued under Sec. 3(g) of the Interest Equalization Tax Extension Act of 1971, Public Law 92-9, C.B. 1971-1, 554. The effect of such reinstatement is that section 4920(b) of the Internal Revenue Code of 54 applies to all shares of the class from July 19, 1963.