### Question
How does INCOME FROM SOURCES WITHOUT THE UNITED STATES define qualified banking or financing income?


### Answer
Under *26 U.S.C. § 954*, **qualified banking or financing income** is defined as:

> income of an eligible controlled foreign corporation which—


(i) is derived in the active conduct of a banking, financing, or similar business by—


(I) such eligible controlled foreign corporation, or


(II) a qualified business unit of such eligible controlled foreign corporation,


  

(ii) is derived from one or more transactions—


(I) with customers located in a country other than the United States, and


(II) substantially all of the activities in connection with which are conducted directly by the corporation or unit in its home country, and


  

(iii) is treated as earned by such corporation or unit in its home country for purposes of such country's tax laws

#### Citation:
  - *26 U.S.C. § 954*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter N-Tax Based on Income From Sources Within or Without the United States > PART III-INCOME FROM SOURCES WITHOUT THE UNITED STATES > Subpart F-Controlled Foreign Corporations**

