A
flow-through entity (
FTE) is a
legal entity where income "flows through" to investors or owners; that is, the income of the entity is treated as the income of the investors or owners. Flow-through entities are also known as
pass-through entities or
fiscally-transparent entities. Depending on the local tax regulations, this structure can avoid
dividend tax and
double taxation because only owners or investors are taxed on the revenue. Technically, for tax purposes, flow-through entities are considered "non-entities" because they are not taxed; rather, taxation "flows-through" to another tax return.