Hybrid Entities

Hybrid Entities and Art. 3 of OCDE MC
‣ The term “person” is defined by art. 3(1)(a) “as including an individual, a company and
any other body of persons”.
‣ OECD Commentaries: “3.2 (…) Thus, e.g. a foundation (Stiftung) may fall within the
meaning of the term "person". Partnerships will also be considered to be "persons" either
because they fall within the definition of "company" or, where this is not the case, because
they constitute other bodies of persons (…).”
‣ Thus, partnerships and foundations are also included in such definition. What about
investment funds?
‣ OECD Commentaries mention of funds: “8.2. (...) For example, pension funds,
charities and other organizations (...)”. Can investment funds constitue other body of
persons?
‣ “Body corporate” can be defined as: “ any other taxable unit, although not incorporated,
that is treated as a body corporate according to the tax law of the Contracting State in
which it is organized”.
‣ However, the term body or person is not expressly defined neither in the Model
Convention nor in the Commentary.
‣ Some hybrid entities like investment funds may constitute an “association of person”; not
a “body of person” because they lack of independent identity (i.e. legal personality)
‣ Commentary on Art.3, paragraph 2: expressly mentions that the terms “persons is to be
used in a wide sense”,
‣ General Report IFA Congress in 1997: Requirements for funds to be treated as person
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