PUBLIC LAW 99-514—OCT. 22, 1986
100 STAT. 2583
"Sec. 1446. Withholding tax on amounts paid by partnerships to foreign partners."
(d) EFFECTIVE DATE.—The amendment made by this section shall apply to distributions after December 31, 1987 (or, if earlier, the effective date (which shall not be earlier than January 1, 1987) of the initial regulations issued under section 1446 of the Internal Revenue Code of 1986 as added by this section). SEC. 1247. INCOME OF FOREIGN GOVERNMENTS.
(a) SPECIAL RULE.—Section 892 (relating to income of foreign governments and of international organizations) is amended to read as follows: "SEC. 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 .;,.
"(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), or "(ii) received from or by a controlled commercial entity. "(B) CONTROLLED COMMERCIAL ENTITY.—For purposes of
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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 vji':^.^ entity which (by value or voting interest) is 50 percent or more of the total of such interests in such entity, or liens, fi: "(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. "(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
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