### Question
How does the law define controlled commercial entity?


### Answer
Under *26 U.S.C. § 892*, **controlled commercial entity** is defined as:

> 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

#### Citation:
  - *26 U.S.C. § 892*
  - 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 II-NONRESIDENT ALIENS AND FOREIGN CORPORATIONS > Subpart D-Miscellaneous Provisions**

