26 U.S. Code § 892 - Income of foreign governments and of international organizations (2024)

FAQs

26 U.S. Code § 892 - Income of foreign governments and of international organizations? ›

26 U.S. Code § 892 - Income of foreign governments and of international organizations. 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.

Income of Foreign Governments and of International Organizations. Foreign governments are generally exempt from U.S. income tax on U.S.-source investment income, such as income from investments in U.S. stocks and bonds and other domestic securities (IRC § 892) (Explanation: §892, Exempt Income of a Foreign Government).

892 are interests, dividends and gains arising from stocks, bonds, securities, bank deposits, etc. As a general rule, foreign persons are generally subject to a 30 percent U.S. withholding tax on U.S.-sourced dividends unless there is a treaty benefit. Section 892 exempts SWFs from this type of withholding tax.

Foreign corporations that are engaged in a trade or business in the United States are subject to net-basis income tax under §882 on any of their income that is “effectively connected” with that business.

International organizations are exempt from U.S. tax on all U.S. source income. This income is not subject to NRA withholding.

26 U.S. Code § 892 - Income of foreign governments and of international organizations. 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.

Foreign investors

Foreign governments. If §892 applies, foreign governments are exempt from U.S. taxation on certain. U.S.-source income. — §892 exempts U.S. tax on: - Investments in U.S. stocks, bonds, or other securities.

Most types of U.S. source income received by a foreign person are subject to U.S. tax of 30%. A reduced rate, including exemption, may apply if an Internal Revenue Code Section provides for a lower rate, or there is a tax treaty between the foreign person's country of residence and the United States.

As a general rule, such foreign tax-exempt organizations should file Form W-8 EXP with the withholding agent in order to establish their status as a foreign tax-exempt organization.

Section 892 generally exempts foreign governments (and their sovereign wealth funds and other affiliates) from United States federal income tax on certain types of income, including certain income from stocks, bonds, and other securities.

Does a foreign corporation have to file a US tax return? ›

A foreign corporation that is engaged in a U.S. trade or business at any time during the year must file a U.S. tax return.

Form 2555. You must attach Form 2555, Foreign Earned Income, to your Form 1040 or 1040X to claim the foreign earned income exclusion, the foreign housing exclusion or the foreign housing deduction.

The general rule is that a foreign corporation's income is not taxed in the United States until the foreign corporation pays a dividend to its U.S. shareholder(s). The foreign corporation's dividend income is then subject to tax in the hands of its U.S. shareholder(s).

Giant U.S. companies are still hiding their money abroad

One common method of corporate profit shifting works like this: A company like Microsoft sells its intellectual property to a subsidiary in a low-tax country and then pays that subsidiary for the use of that intellectual property.

Through the Department of State's Diplomatic Tax Exemption Program, the U.S. Government meets its obligations under Article 34 of the Vienna Convention on Diplomatic Relations and Article 49 of the Vienna Convention on Consular Relations, as well as other similar treaties and agreements, to provide exemption from state ...

As a general rule, members of the diplomatic staff, administrative staff, technical staff and service staff of most foreign missions to the U.S. are exempt from federal and state taxes.

Generally, when a foreign person engages in a trade or business in the United States, all income from sources within the United States connected with the conduct of that trade or business is considered to be Effectively Connected Income (ECI).

The IRS Whistleblower Office pays monetary awards to eligible individuals whose information is used by the IRS. The award percentage depends on several factors, but generally falls between 15 and 30 percent of the proceeds collected and attributable to the whistleblower's information.

Form 8288. The tax withheld on the acquisition of a U.S. real property interest from a foreign person is reported and paid using Form 8288. Form 8288 also serves as the transmittal form for copies A and B of Form 8288-A.

The term “tax codes” can refer to a collection of tax laws, such as the Internal Revenue Code (IRC), and can also refer to specific tax laws within the IRC. For example, IRC section 162 is a tax code that defines when you can claim a business deduction.