US Code

Public Law 119-73 (01/23/2026)

26 U.S.C. § 892

Income of foreign governments and of international organizations

(a)

Foreign governments

(1)

In general

The income of foreign governments received from—
(A)
investments in the United States in—
(i)
stocks, bonds, or other domestic securities owned by such foreign governments, or
(ii)
financial instruments held in the execution of governmental financial or monetary policy, or
(B)
interest on deposits in banks in the United States of moneys belonging to such foreign governments,
shall not be included in gross income and shall be exempt from taxation under this subtitle.
(2)

Income received directly or indirectly from commercial activities

(A)

In general

Paragraph (1) shall not apply to any income—
(i)
derived from the conduct of any commercial activity (whether within or outside the United States),
(ii)
received by a controlled commercial entity or received (directly or indirectly) from a controlled commercial entity, or
(iii)
derived from the disposition of any interest in a controlled commercial entity.
(B)

Controlled commercial entity

For purposes of subparagraph (A), the term “controlled commercial entity” means any entity engaged in commercial activities (whether within or outside the United States) if the government—
(i)
holds (directly or indirectly) any interest in such entity which (by value or voting interest) is 50 percent or more of the total of such interests in such entity, or
(ii)
holds (directly or indirectly) any other interest in such entity which provides the foreign government with effective control of such entity.
For purposes of the preceding sentence, a central bank of issue shall be treated as a controlled commercial entity only if engaged in commercial activities within the United States.
(3)

Treatment as resident

For purposes of this title, a foreign government shall be treated as a corporate resident of its country. A foreign government shall be so treated for purposes of any income tax treaty obligation of the United States if such government grants equivalent treatment to the Government of the United States.

(b)

International organizations

The income of international organizations received from investments in the United States in stocks, bonds, or other domestic securities owned by such international organizations, or from interest on deposits in banks in the United States of moneys belonging to such international organizations, or from any other source within the United States, shall not be included in gross income and shall be exempt from taxation under this subtitle.

(c)

Regulations

The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section.

Aug. 16, 1954, ch. 73668A Stat. 284Pub. L. 99–514, title XII, § 1247(a)100 Stat. 2583Pub. L. 100–647, title I, § 1012(t)(1)102 Stat. 3527Pub. L. 101–508, title XI, § 11704(a)(35)104 Stat. 1388–519(, ; , , ; –(3), , ; , , .)

Editorial Notes

Amendments

Pub. L. 101–508Pub. L. 100–647, § 1012(t)(1)1990—Subsec. (a)(2)(A). made clarifying amendment to . See 1988 Amendment note below.

Pub. L. 100–647, § 1012(t)(1)Pub. L. 101–5081988—Subsec. (a)(2)(A). , (2), as amended by , amended cl. (ii) generally and added cl. (iii). Prior to amendment, cl. (ii) read as follows: “received from or by a controlled commercial entity.”

Pub. L. 100–647, § 1012(t)(3)Subsec. (a)(3). , added par. (3).

Pub. L. 99–5141986— amended section generally. Prior to amendment, section read as follows: “The income of foreign governments or international organizations received from investments in the United States in stocks, bonds, or other domestic securities, owned by such foreign governments or by international organizations, or from interest on deposits in banks in the United States of moneys belonging to such foreign governments or international organizations, or from any other source within the United States, shall not be included in gross income and shall be exempt from taxation under this subtitle.”

Statutory Notes and Related Subsidiaries

Effective Date of 1988 Amendment

Pub. L. 100–647Pub. L. 99–514section 1019(a) of Pub. L. 100–647section 1 of this titleAmendment by effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, , to which such amendment relates, see , set out as a note under .

Effective Date of 1986 Amendment

Pub. L. 99–514, title XII, § 1247(b)100 Stat. 2584

“The amendment made by subsection (a) [amending this section] shall apply to amounts received on or after , except that no amount shall be required to be deducted and withheld by reason of the amendment made by subsection (a) from any payment made before the date of the enactment of this Act [].”
, , , provided that:

Pub. L. 99–514Applicability of Certain Amendments by in Relation to Treaty Obligations of United States

section 1247(a) of Pub. L. 99–514Pub. L. 100–647Pub. L. 99–514Pub. L. 100–647section 861 of this titleFor nonapplication of amendment by to the extent application of such amendment would be contrary to any treaty obligation of the United States in effect on , with provision that for such purposes any amendment by title I of be treated as if it had been included in the provision of to which such amendment relates, see section 1012(aa)(3), (4) of , set out as a note under .