IRS Releases Rules on Sovereign Wealth Fund Tax Exemption
November 08, 2011, 5:27 AM ESTBy Richard Rubin
(Updates with additional information from proposal starting in the second paragraph.)
Nov. 2 (Bloomberg) -- The Internal Revenue Service released proposed regulations that would provide clearer rules governing when the U.S. activities of sovereign wealth funds are exempt from taxation.
The U.S. currently taxes the income of sovereign wealth funds that is attributable to “commercial activity.”
The proposed rules released today include an exception that would allow wealth funds to engage in “inadvertent commercial activity” without triggering taxation. The proposal also provides additional definitions of what is considered commercial activity.
The IRS is seeking comments by Feb. 1, 2012.
--Editors: Jodi Schneider, Bob Drummond
To contact the reporter on this story: Richard Rubin in Washington at rrubin12@bloomberg.net
To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net
