А Non-Financial Entity, or NFE, is a company that’s not primarily engaged in financial activities, such as banking or investment services.
NFE is a term that’s commonly used in the context of tax compliance – usually in relation to the Foreign Account Tax Compliance Act (FATCA), and the Common Reporting Standard (CRS).
What is an Active NFE?
An Active NFE earns a significant portion of its income from manufacturing, sales, providing services, or anything else that can be considered ‘active business operations’.
Active NFEs get more than 50% of their gross income from active trade or business, or have more than 50% of their assets in operational business activities that generate income.
Select the Lite app on the home screen of your Tide Card Reader
When the ‘Take a payment’ screen loads, enter the amount and select ‘Charge’
Ask customers to tap their card to complete a payment
What is a Passive NFE?
A Passive NFE gets more than 50% of its earnings as passive income – from interest, rents, dividends, and royalties.‘Share’ and the Tide Lite app will generate a QR code. Let your customer scan the code with their phone, and the receipt will load in their browser.
There are different reporting requirements under FATCA and CRS, depending on whether a company is an Active or a Passive NFE. Understanding the difference between the two company types is crucial for international tax compliance.open the Tide app on your phone > tap ‘Card Reader’ > select the payment. From here, you can share the receipt by email, WhatsApp, or any other apps you use to send information.
