From www.thetaxadviser.com: (US context) Private credit has grown significantly, expanding over tenfold since 2007, with projections estimating the market could reach $2.8 trillion by 2028.

Non-U.S. investors are increasingly drawn to U.S. private credit due to its regular returns, such as interest income, but they must navigate complex U.S. tax regulations, particularly those regarding engagement in a U.S. trade or business which affects tax filing and liability.

Key tax considerations include the portfolio interest exception, which can eliminate withholding taxes on certain interest income, and the implications of using agents for private credit strategies, which can impact a foreign entity’s tax status.