Par. 3. Section 1.892-5 is amended by: a. Redesignating paragraph (e) as paragraph (e)(1); b. Revising the heading of newly redesignated paragraph (e)(1); and c. Adding paragraph (e)(2) introductory text. The revision and addition read as follows:
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(e) Applicability date —(1) In general. * * *
(2) Effective control applicability date —(i) In general. Except as provided in paragraph (e)(2)(ii) of this section, paragraph (c)(2) of this section applies to determine whether a foreign government has effective control of an entity on or after the date that is the later of:
(A) The first day of the foreign government's first taxable year beginning on or after [DATE OF PUBLICATION OF FINAL RULE], or
(B) 90 days after [DATE OF PUBLICATION OF FINAL RULE].
(ii) Rules with respect to previously acquired interests. If a foreign government holds any previously acquired interests (as defined in paragraph (e)(2)(ii)(B) of this section) in an entity, paragraph (c)(2) of this section applies to determine whether the foreign government has effective control of the entity beginning on the date on which the foreign government first acquires new controlling interests (as defined in paragraph (e)(2)(ii)(A) of this section) in the entity. Until the date that the foreign government first acquires new controlling interests in the entity, all of the foreign government's interests in that entity shall continue to be governed by §§ 1.892-5 and 1.892-5T, as contained in 26 CFR in part 1 in effect on April 1, 2026.
(A) New controlling interests. For purposes of this paragraph (e)(2)(ii), the term new controlling interests means one or more interests in an entity, other than any previously acquired interests (as defined in paragraph (e)(2)(ii)(B) of this section), that in the aggregate result in effective control of the entity under paragraph (c)(2) of this section.
(B) Previously acquired interests. For purposes of this paragraph (e)(2)(ii), the term previously acquired interests means one or more interests in an entity acquired by a foreign government before the later of the dates described in paragraphs (e)(2)(i)(A) and (B) of this section, or acquired pursuant to a binding commitment entered into before the later of such dates.