controlled commercial entity

(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.

Source

26 USC § 892(a)(2)

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Scoping language

None identified, default scope is assumed to be the parent (subpart D) of this section.

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