Excluded Entities

For the purposes of Article 4 of the Law, all of the following shall apply:

A Government Body is an Entity that meets all of the following criteria:
1. It is part of or wholly-owned by a government (including any political subdivision or local authority thereof).
2. It has the principal purpose of fulfilling a government function, or managing or investing that government's or jurisdiction's assets through the making and holding of investments, asset management, and related investment activities for the government's or jurisdiction's assets, and does not carry on a trade or business.
3. It is accountable to the government on its overall performance, and provides annual information reporting to the government.
4. Its assets vest in such government upon dissolution and to the extent it distributes net earnings, such net earnings are distributed solely to such government with no portion of its net earnings inuring to the benefit of any private person.
An International Organisation means any intergovernmental organisation (including a supranational organisation) or wholly-owned agency or instrumentality thereof that meets all of the following criteria:
1. It is comprised primarily of governments.
2. It has in effect a headquarters or substantially similar agreement (for example, arrangements that entitle the organisation's offices or establishments in the jurisdiction (e.g. a subdivision, or a local, or regional office) to privileges and immunities) with the jurisdiction in which it is established.
3. Any law or the International Organisation's governing documents prevent its income inuring to the benefit of private persons.
A Non-profit Organisation is an Entity that meets all of the following criteria:
1. It is established and operated in its jurisdiction of residence for any of the following purposes:
  1. Exclusively for religious, charitable, scientific, artistic, cultural, athletic, educational, or other similar purposes.
  2. As a professional organisation, business league, chamber of commerce, labour organisation, agricultural or horticultural organisation, civic league or an organisation operated exclusively for the promotion of social welfare.
2. Substantially all of the income from the activities mentioned in Sub-paragraph A of this Paragraph is exempt from income tax in its jurisdiction of residence.
3. It has no shareholders or members who have a proprietary or beneficial interest in its income or assets.
4. The income or assets of the Entity may not be distributed to, or applied for the benefit of, a private person or non-charitable Entity other than for any of the following purposes:
  1. Pursuant to the conduct of the Entity's charitable activities.
  2. As payment of reasonable compensation for services rendered or for the use of property or capital.
  3. As payment representing the fair market value of property which the Entity has purchased.
5. Upon termination, liquidation or dissolution of the Entity, all of its assets must be distributed or revert to a Non-profit Organisation or to the government (including any Government Body) of the Entity's jurisdiction of residence or any political subdivision thereof.
For the purposes of Paragraph C of this Article, a Non-profit Organisation does not include any Entity carrying on a trade or business that is not directly related to the purposes for which the Non-profit Organisation was established.
A Pension Fund is an Entity that is established and operated in a jurisdiction exclusively or almost exclusively to administer or provide retirement benefits and ancillary or incidental benefits to natural persons and meets any of the following conditions:
1. Regulated as such by that jurisdiction or one of its political subdivisions or local authorities.
2. Those benefits are secured or otherwise protected by national regulations and funded by a pool of assets held through a fiduciary arrangement or trustor to secure the fulfilment of the corresponding pension obligations against a case of insolvency of the Multinational Enterprise Group.
For the purposes of Paragraph E of this Article, a Pension Fund includes a Pension Services Entity which is an Entity that is established and operated exclusively or almost exclusively for any of the following purposes:
1. To invest funds for the benefit of a Pension Fund.
2. To carry out activities that are ancillary to those regulated activities carried out by a Pension Fund provided that they are members of the same Group.
An Investment Fund is an Entity that meets all of the following conditions:
1. It is designed to pool assets (which may be financial and non-financial) from a number of investors (some of which are not connected).
2. It invests in accordance with a defined investment policy.
3. It allows investors to reduce transaction, research, and analytical costs, or to spread risk collectively.
4. It is primarily designed to generate investment income or gains, or protection against a particular or general event or outcome:
  1. Investors have a right to return from the assets of the fund or income earned on those assets, based on the contributions made by those investors.
  2. The Entity or its management is subject to a regulatory regime in the jurisdiction in which it is established or managed (including appropriate anti-money laundering and investor protection regulation).
  3. It is managed by investment fund management professionals on behalf of the investors.
A Real Estate Investment Vehicle is an Entity the taxation of which achieves a single level of taxation either in its hands or the hands of its interest holders (with at most one year of deferral), provided that the Entity holds predominantly immovable property and is itself widely held.

Chapter 2 - Scope of Application

Article 2 - Excluded Entities