MTT10240 | Scope: Excluded entities: Definitions of ‘governmental entity’ and ‘international organisation’

From HM Revenue & Customs · Multinational Top-up Tax and Domestic Top-up Tax

The definitions of ‘governmental entity’ and ‘international organisation’ are set out in section 234 of Finance (No.2) Act 2023.

An entity is a governmental entity if:

it is wholly owned by a national, regional, or local government,
it has the principal purpose of carrying out a public function of that government or managing or investing the assets of that government (in which case it is a sovereign wealth fund, see MTT42020),
it is accountable to the government on its overall performance and provides annual information reporting to the government,
it does not carry on a trade or business,
when dissolved, its assets belong to that government, and
it does not distribute profit except to that government.

An international organisation is an intergovernmental or supranational organisation that is:

comprised primarily of governments,
has a headquarters, or privileges or immunities in respect of its establishments, in the territory in which it is established, and
it cannot distribute profits to private persons according to its governing documents or the law of that territory.

An entity that acts for, is part of, or is wholly owned by such an organisation is also an international organisation.