Active NFE Sample Clauses

The 'Active NFE' clause defines an entity that is classified as a Non-Financial Entity (NFE) actively engaged in business operations, rather than primarily holding passive income or assets. In practice, this clause typically outlines criteria such as the percentage of income derived from active business activities, the proportion of assets used in such activities, or the number of employees involved in operational roles. Its core function is to distinguish between entities for regulatory or tax reporting purposes, ensuring that only those genuinely conducting business are treated as active NFEs, thereby preventing misuse of passive entities for tax avoidance or evasion.