FEOC buyer's quick guide

The two questions

1. Is the company claiming the credit a prohibited foreign entity? If so, it can't claim 45X, 45Y or 48E.
2. Did too much of the project or component come from prohibited foreign entities? That's material assistance, measured by a cost ratio with a minimum that rises each year.

When a company is tied to a specified foreign entity

Test	Level in the law
A specified foreign entity can appoint a covered officer	Any such authority
One specified foreign entity owns the company	25% or more
Specified foreign entities together own the company	40% or more
Debt issued to specified foreign entities	15% or more
Payments under a contract that gives effective control, such as certain licenses	See the law and Treasury guidance

Key dates

• 4 July 2025: the law adding these rules is enacted.
• 2026: for calendar-year taxpayers, the entity rules and the material assistance rules generally apply. For 48E and 45Y, material assistance applies to projects that begin construction after 31 December 2025.
• 12 February 2026: Treasury and the IRS issue Notice 2026-15, the first guidance.
• By 31 December 2026: the law requires Treasury to publish safe harbor cost tables. Proposed regulations on who counts as a prohibited foreign entity are expected, with no date announced.

Supplier certifications

Until Treasury's safe harbor tables arrive, a buyer working out the cost ratio can generally rely on a supplier's certification, signed under penalties of perjury, unless the buyer knows, or has reason to know, that it's inaccurate. Public filings that point to foreign ownership or control can give a buyer reason to know.

Six questions for every key supplier

1. Who owns you, all the way to the top?
2. Does any government, at any level, own or control any of your owners?
3. Who can appoint your directors and senior officers?
4. Who holds your debt, and has any lender taken a pledge over your shares?
5. Do you license core technology from another company, and on what terms?
6. Will you give a signed certification and update it if anything changes?

More: full supplier checklist · timeline of the rules · glossary

Battery Pulse provides evidence and findings on battery supplier ownership and control, from public records. General information, not legal or tax advice. Current as of November 2026. contact@batterypulse.co