Client Alert
| November 4, 2011
Proposed Regulations Clarify U.S. Federal Income Tax Treatment of Foreign Government Investments
On November 2, 2011, the U.S. Treasury Department and the Internal Revenue Service issued proposed U.S. Treasury regulations (the “Proposed Regulations”) providing additional guidance on the scope of the U.S. federal income tax exemption for non-U.S. (“foreign”) governments under section 892 of the U.S. Internal Revenue Code. Foreign governments that have concerns about de minimis commercial activity, that invest as limited partners in private equity and other alternative investment funds, or that invest or trade in financial instruments, should find that the Proposed Regulations provide helpful guidance. Important issues, however, remain that warrant consideration in the final regulations.
This memorandum is intended only as a general discussion of these issues. It is not considered to be legal advice. We would be pleased to provide additional details or advice about specific situations. For additional information on this important topic, please feel free to call upon your Dewey & LeBoeuf relationship partner. No part of this publication may be reproduced, in whole or in part, in any form, without our prior written consent.
For further information on Dewey & LeBoeuf, please visit www.dl.com. +1 888 532 6383