26 CFR 1.892-2T - Foreign government defined (temporary regulations).
(a)Foreign government -
(2)Integral part. An “integral part” of a foreign sovereign is any person, body of persons, organization, agency, bureau, fund, instrumentality, or other body, however designated, that constitutes a governing authority of a foreign country. The net earnings of the governing authority must be credited to its own account or to other accounts of the foreign sovereign, with no portion inuring to the benefit of any private person. An integral part does not include any individual who is a sovereign, official, or administrator acting in a private or personal capacity. Consideration of all the facts and circumstances will determine whether an individual is acting in a private or personal capacity.
(3)Controlled entity. The term “controlled entity” means an entity that is separate in form from a foreign sovereign or otherwise constitute a separate juridical entity if it satisfies the following requirements:
(ii) It is organized under the laws of the foreign sovereign by which owned;
(iv) Its assets vest in the foreign sovereign upon dissolution.
(b)Inurement to the benefit of private persons. For purposes of this section, income will be presumed not to inure to the benefit of private persons if such persons (within the meaning of section 7701(a)(1)) are the intended beneficiaries of a governmental program which is carried on by the foreign sovereign and the activities of which constitute governmental functions (within the meaning of § 1.892-4T(c)(4)). Income will be considered to inure to the benefit of private persons if such income benefits:
(c)Pension trusts -
(i) The trust is established exclusively for the benefit of (A) employees or former employees of a foreign government or (B) employees or former employees of a foreign government and non-governmental employees or former employees that perform or performed governmental or social services;
(b) The facts are the same as in Example 4(a), except that MW is a controlled entity of foreign sovereign FC. The result is the same as in Example 4(a). However, should MW engage in commercial activities (whether within or outside the United States), the income from the Treasury obligations earned by the pension fund will not be exempt from taxation under section 892 since MW will be considered a controlled commercial entity within the meaning of § 1.892-5T(a).
(d)Political subdivision and transnational entity. The rules that apply to a foreign sovereign apply to political subdivisions of a foreign country and to transnational entities. A transnational entity is an organization created by more than one foreign sovereign that has broad powers over external and domestic affairs of all participating foreign countries stretching beyond economic subjects to those concerning legal relations and transcending state or political boundaries.
- 26 CFR 301.7701-2 — Business Entities; Definitions.
- 26 CFR 1.1441-8 — Exemption From Withholding for Payments to Foreign Governments, International Organizations, Foreign Central Banks of Issue, and the Bank for International Settlements.
- 26 CFR 1.883-4 — Qualified Shareholder Stock Ownership Test.
- 26 CFR 1.892-7T — Relationship to Other Internal Revenue Code Sections (Temporary Regulations).
- 26 CFR 1.892-4T — Commercial Activities (Temporary Regulations).
- 26 CFR 1.884-5 — Qualified Resident.
- 26 CFR 1.936-10 — Qualified Investments.
- 26 CFR 1.892-3T — Income of Foreign Governments (Temporary Regulations).
- 26 CFR 1.882-5 — Determination of Interest Deduction.
- 26 CFR 1.892-1T — Purpose and Scope of Regulations (Temporary Regulations).
- 26 CFR 1.892-5T — Controlled Commercial Entity (Temporary Regulations).
- 26 CFR 1.892-5 — Controlled Commercial Entity.