**[U.S. Proposes Taxation on Global Sovereign Wealth Funds, Potentially Triggering a New Wave of Capital Withdrawal]** BlockBeats News, January 16 — U.S. authorities have proposed a major reform that may require sovereign wealth funds to pay taxes on their investments in the United States, which could impact some of the largest investors in the U.S. private equity sector. In December of last year, the Internal Revenue Service (IRS) released a proposal to amend provisions in the Internal Revenue Code that sovereign wealth funds and certain public pension funds use to apply for U.S. tax exemptions. This is the latest move in a series of policy shocks introduced during the Trump administration, which have already prompted sovereign wealth funds to diversify their investment exposure in the U.S. Under this proposal, the IRS plans to expand the definition of "business activities," incorporating certain activities previously considered investments. These changes will affect scenarios such as sovereign wealth funds providing loans to enterprises and making direct equity investments in private companies. According to the new proposal, activities that could lead to tax obligations for sovereign wealth funds include directly lending to enterprises and playing a role in bond default restructurings. These changes may also impact so-called "blockers," which are special purpose vehicles (SPVs) commonly used by sovereign wealth funds and pension funds when co-investing directly in portfolio companies alongside private equity firms. (Jin10)