Article 2 — Excluded entities

Start with Law Article 4 to identify the exclusion category, then apply its detailed definition here. A name, licence or government shareholding alone is insufficient. The direct exclusions for an investment fund or real estate investment vehicle require it to be the Ultimate Parent Entity. Entities owned by excluded bodies have separate statutory tests.

A government body must be part of government or wholly government-owned, principally perform a governmental function or manage government investments without conducting a trade or business, be accountable and report annually to government, and return its assets and distributed profits to government without private benefit. An international organisation must consist primarily of governments, have a headquarters or comparable privileges-and-immunities arrangement, and prohibit private benefit from its income.

The listed non-profit purposes include charitable, scientific, cultural, athletic and educational purposes, alongside specified bodies such as professional organisations, chambers of commerce and labour organisations. Examine purposes and actual operations, the definition’s income-tax exemption condition, absence of private ownership benefits, restrictions on distributions and the destination of assets on dissolution. These restrictions do not prohibit every payment to a private person: the Article permits charitable-purpose payments, reasonable compensation for services or the use of property or capital, and purchases at fair market value. Unrelated commercial activity, however, falls outside this definition.

A pension fund must operate exclusively or almost exclusively to administer retirement and associated benefits and satisfy the prescribed regulation or protected-benefits-and-assets test. Qualifying pension service entities may invest for the fund or perform ancillary regulated activities within the same group.

An investment fund pools assets from several investors, some unrelated, under a defined policy, with collective risk spreading or cost reduction, a principal investment-return or event-protection objective, return rights based on investor contributions, regulation and professional management. A real estate investment vehicle must be widely held, principally own immovable property and have a single level of taxation at vehicle or owner level, with deferral limited to one year. Exclusion does not remove an entity’s revenue from the group Revenue Test under Law Article 3; the provisions preserved by Law Article 4(C) must still be considered.