Foreign governments can no longer hide commercial investments from US taxes

The US Treasury is tightening rules on how foreign governments invest in the United States. This means it will be harder for them to avoid paying US taxes on income from commercial activities.

For years, foreign governments could invest in US assets and claim tax exemptions by structuring their holdings in complex ways. These new rules clarify what counts as a commercial activity and when a foreign government truly controls an entity. This makes it harder to use shell companies or indirect ownership to avoid US tax obligations.