### Question
How does the law define applicable earnings?


### Answer
Under *26 U.S.C. § 956*, **applicable earnings** is defined as:

> given to such term by section 956A(b), except that the provisions of such section excluding earnings and profits accumulated in taxable years beginning before October 1, 1993, shall be disregarded.

#### Citation:
  - *26 U.S.C. § 956*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter N-Tax Based on Income From Sources Within or Without the United States > PART III-INCOME FROM SOURCES WITHOUT THE UNITED STATES > Subpart F-Controlled Foreign Corporations**

