Foreign-Government Income Tax Exemption Rules Input Sought

The Treasury Department wants feedback on foreign government lending and effective control of commercial entities as it works on finalizing rules governing when foreign government income is exempt from US taxation.

Huzefa Mun, attorney-adviser at Treasury’s Office of Tax Policy, said Wednesday that the agency is particularly hoping for comments on classifying debt as an investment or a commercial activity, and on when a sovereign government can be considered to have effective control of an entity engaged in commercial activity and thus to be unqualified for US tax exemption.

The deadline for comments is Feb. 13, and Mun said ...