The branch-level interest tax imposed pursuant to I.R.C. s. 884(f)(1)(B) is not considered to be an "income or profits tax" for purposes of s. 126(7)(a) or (c) because it is not imposed on the branch's income or profits.
The branch-level interest tax imposed on a U.S branch of a Canadian company pursuant to I.R.C. s. 884 (f)(1)(B) is considered to be a deductible expense because it is an outlay incurred for the purpose of gaining or producing business income.