Category Archives: International Tax

Miami Tax Attorney

Foreign Earned Income Exclusion

Foreign Earned Income Exclusion.
In general, a U.S. citizen or a resident alien of the United States living abroad is taxed on their worldwide income. However, these taxpayers may qualify to exclude from income up to an amount of foreign earnings that is adjusted annually for inflation ($100,800 for 2015 or $101,300 for 2016). In addition, eligible taxpayers can exclude or deduct certain foreign housing amounts.

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Partnerships, Withholding on Foreign Recipients of U.S. Income, Tax Year 2013

Partnerships, Withholding on Foreign Recipients of U.S. Income, Tax Year 2013.

A new table presenting data from Form 8805, Foreign Partner’s Information Statement of Section 1446 Withholding Tax, is now available on SOI’s Tax Stats Webpage. The table presents U.S. income and tax withheld as reported on Form 8805, by country of residence for Tax Year 2013, and includes the number of returns, total income, income, loss, and tax withheld.

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FATCA FAQs

FATCA FAQs

Qualified Intermediaries/Withholding Foreign Partnerships/Withholding Foreign Trusts.

Q1. How does a Financial Institution that is not currently a Qualified Intermediary (“QI”), a Withholding Foreign Partnership (“WP”), or a Withholding Foreign Trust (“WT”) register to become one?
Q2. How do FIs that are currently QIs, WPs and WTs renew their agreements?
Q3. I am not currently a QI/WP/WT. Can I use the LB&I registration portal to register for FATCA and become a new QI/WP/WT?
Q4. Must an FI become a QI/WP/WT in order to register under FATCA?
Q5. If an FFI has a QI/WP/WT agreement in place, does the Responsible Party for purposes of the QI/WP/WT Agreement also have to the serve as the FFI’s Responsible Officer?
Q6. If a member of the Expanded Affiliated Group is a Qualified Intermediary/Withholding Trust/Withholding Partnership, does the Lead Financial Institution renew the Qualified Intermediary/Withholding Trust/Withholding Partnership agreement on behalf of the member or does the member renew its own agreement?
Q7. How will Withholding Foreign Partnerships (WP) and Withholding Foreign Trusts (WT) renew their WP and WT agreements, if the revised WP and WT agreements will not be published before June 30, 2014?
Q8. When will the terms of the revised QI Agreement set forth in Revenue Procedure 2014-39 be effective for: (a) entities seeking QI status, and (b) entities seeking renewal of their QI Agreements?
Q9. If an entity submits an application for WP or WT status on or after April 1 and is approved for such status, what will the effective date of its WP or WT agreement be?

IGA Registration
Q1. Please provide a link that lists the jurisdictions treated as having in effect a Model 1 or Model 2 IGA.
Q2. How do Foreign Financial Institutions in Model 1 jurisdictions register on the FATCA registration website?
Q3. How do Foreign Financial Institutions in Model 2 jurisdictions register on the FATCA registration website?
Q4. We are an FFI in a country that has not signed an IGA, and the local laws of our country do not allow us to report U.S. accounts or withhold tax. What is our FATCA classification?
Q5. In a Model 1 IGA jurisdiction, does the FFI need to fill out Question 10 about Responsible Officers?
Q6. Does an FFI in a Model 1 IGA jurisdiction need to register before July 1, 2014, if the FFI is part of an EAG?
Q7. Does an entity in a Model 1 jurisdiction that, relying on the definition of a nonreporting financial institution under the applicable IGA, qualifies as a deemed-compliant FFI or an exempt beneficial owner under relevant U.S. Treasury Regulations, need to register on the FATCA registration website?
Q8. Announcement 2014-38 provides that a jurisdiction that is treated as if it has an IGA in effect, but that has not yet signed an IGA, retains such status beyond December 31, 2014, provided that the jurisdiction continues to demonstrate firm resolve to sign the IGA that was agreed in substance. Given this additional time to sign the IGA, does a reporting Model 1 FFI in such a jurisdiction need to register and obtain a GIIN before January 1, 2015?

Expanded Affiliated Groups
Q1. For registration purposes, can an EAG with a Lead FI and 2 Member FIs be divided into: (1) a group with a Lead FI and a member FI, and (2) a member FI that will register as a Single FI?
Q2. What is required for an entity to be a Lead FI?
Q3. Can a Member FI complete its FATCA registration and obtain a GIIN if the Lead FI for that Member FI has not yet registered under FATCA?
Q4. Is a limited FFI who is a member of an Expanded Affiliated Group subject to Chapter 4 withholding?

Sponsoring/Sponsored Entities
Q1. We are a Sponsoring Entity, and we would like to register our Sponsored Entities. How do we register our Sponsored Entities?
Responsible Officers and Points of Contact
Q1. What is a Point Of Contact (POC)?
Q2. Is the Responsible Officer required to be the same person for all lines on Form 8957 or the online registration (“FATCA Registration”)?
Q3. The Instructions for Form 8957 state that for purposes of Part 1, question 10, “. . . RO means the person authorized under applicable local law to establish the statuses of the FI’s home office and branches as indicated on the registration form.” What does it mean for an RO to have the authority to “establish the statuses of the FI’s home office and branches as indicated on the registration form”?
Q4. My FI plans on employing an outside organization (or individual) solely for the purpose of assisting with the registration process. Once registration is complete, or shortly thereafter, my FI intends to discontinue its relationship with this organization. Is this permissible under the FATCA registration system? How should my FI use the registration system to identify this relationship?
Q5. For each of the following FATCA classifications (i.e. Participating Foreign Financial Institution “PFFI”, PFFI that elects to be part of a consolidated compliance program, Registered Deemed-Compliant Foreign Financial Institution “RDCFFI”, Reporting Model 1 FFI, Limited FFI and US Financial Institution “USFI”) what type of individual may serve as a Responsible Officer for purposes of Part 1, Question 10 of the FATCA Registration?
Q6. Additional questions related to: Part 4 of the online registration system*

Financial Institutions
Q1. Are U.S. Financial Institutions (USFIs) required to register under FATCA? If so, under what circumstances would a USFI register? Does it matter whether the USFI has a branch in an IGA jurisdiction?
Q2. Is a Foreign Financial Institution (“FFI”) required to obtain an EIN?
Q3. How does a FFI apply for a EIN if it does not already have one?

Exempt Beneficial Owners
Q1. We are a foreign central bank of issue. Will we be subject to FATCA withholding if we do not register?
Q2. We are a foreign pension plan. Will we be subject to FATCA withholding if we do not register?

NFFEs
Q1. How should an entity seeking the FATCA status of “direct reporting NFFE” (other than a sponsored direct reporting NFFE) register for this status to obtain a GIIN in order to avoid FATCA withholding?
Q2. How should a sponsor of a sponsored direct reporting NFFE register itself for this status and obtain a GIIN?
Q3. Can a direct reporting NFFE be registered as a Member FI?
Q4. Does a direct reporting NFFE have to separately register its branches when it completes its FATCA registration?

Registration Update
Q1. Why did my registration status change to Registration Incomplete? What can I do?
Q2. For each of the following FATCA classifications (i.e. Participating Foreign Financial Institution “PFFI” for Reporting Model 2 FFI, Registered Deemed Compliant Foreign Financial Institutions “RDCFFI” (for both Model 1 and non-Model 1 FFIs), Sponsoring Entity, Limited FFI or Limited Branch, Renewing QI/WP/WT, US Financial Institution “USFI” treated as a Lead FI and Direct Reporting NFFE) what is the impact of completing Part IV of the FATCA Registration?
Q3. How do Trustees of Trustee-Documented Trusts register?
Q4. Does an FFI registering to become a PFFI (including a reporting Model 2 FFI) need to complete a paper version of the FFI Agreement?
Q5. What action should a FATCA registrant take if it improperly completes multiple FATCA registrations?
Q6. The entity I represent is on the Office of Foreign Asset Control’s Specially Designated Nationals list. Is the entity eligible to register and receive a GIIN?
Q7. What is the Office of Foreign Asset Control’s Specially Designated Nationals (SDN) list?

FFI/EAG Changes
Q1. We are the common parent of an EAG. If we sell our interest in a wholly-owned FFI that is registered as a Member FI, what impact will the sale have on the Member FI’s FATCA registration?
Q2. Can a FATCA registrant change its FI Type—which is selected at the beginning of the FATCA registration process—without re-registering?
Q3. If a registrant has changed its name but not its FI Type, does it need to re-register?
Q4. How can an FFI that is registered as a Single FI change its FATCA registration to become a Lead FI?
Q5. How can an FFI that is registered as a Lead FI of an EAG change its FATCA registration to become a Single FI?
Q6. What steps does a registrant need to complete if it has dissolved?

Branch/Disregarded Entity
Q1. How does a disregarded entity (DE) in a Model 1 IGA jurisdiction satisfy its FATCA registration requirements?
Q2. How does a branch in a Model 1 IGA jurisdiction satisfy its FATCA registration requirements?
Q3. How does a branch or a disregarded entity (DE) in a jurisdiction that does not have an IGA, or that is in a Model 2 IGA jurisdiction, satisfy its FATCA registration requirements?
Q4. How can a withholding agent find the name and GIIN of a branch on the FFI list?
Q5. How does a branch described in Q-2 or Q-3 of this heading that has registered as a separate entity rather than as a branch of its owner correct its registration?

General Compliance
Q1. How will Certified-Deemed Compliant FFIs, Owner-documented FFIs, or Excepted FFIs certify to U.S. withholding agents that they are not subject to Chapter 4 withholding given that they are not required to register with the IRS?
Q2. We are an FFI in a non-IGA country. Will we be subject to Chapter 4 withholding if we do not register with the IRS?
Q3. What are the consequences of terminating the FFI agreement for a Participating Foreign Financial Institution?
Q4. What happens if an FFI is not registered by May 5th, 2014?
Q5. Are Forms W-8 still required to be renewed by the appropriate beneficial owners?
Q6. What should a withholding agent do if an entity account holder indicates that box 9a of Form W–8BEN–E is too small to accommodate the entity’s GIIN?
Q7. Notice 2014-33, 2014-21 I.R.B. 1033, provides that a withholding agent or FFI may treat an obligation as a preexisting obligation if the obligation (i) is issued, opened, or executed on or after July 1, 2014, and before January 1, 2015, and (ii) is held by an entity. How does this provision of Notice 2014-33 apply when the recipient of a payment made under the obligation is a flow-through entity or intermediary?
Q8. Annex I of the IGA provides that, for certain purposes, a self-certification may be made on an IRS Form W-8 or other “similar agreed form.” What would be considered a similar agreed form?
Substitute Withholding Certificate: In General
Q9. What is an acceptable self-certification for purposes of the Annex I due diligence procedures for preexisting and new accounts? Does the self-certification form have to be agreed with the United States?
Q10. If a Reporting Model 1 FFI or a Reporting Model 2 FFI that is applying the due diligence procedures in section III, paragraph B, of Annex I of the IGA cannot obtain a self-certification upon the opening of a New Individual Account, can the FFI open the account and treat it as a U.S. Reportable Account?
Q11. Has a Form W-8 that has been completed and signed by a payee, scanned into an image or portable document format (PDF), and uploaded to a third-party repository been scanned and received electronically by a withholding agent for purposes of sections 1.1441-1(e)(4)(iv)(C) and 1.1471-3(c)(6)(iv) if the payee, upon request from the withholding agent for a Form W-8 to document its status for purposes of chapters 3 and 4, sends the withholding agent an email with a link to the third-party repository site that allows the withholding agent to download the image or PDF of the form that is stored on the repository for such purpose (or the payee otherwise authorizes the withholding agent to access the specific form from the third-party repository in a similar manner).
Q12. My courier requires a physical mailing address for delivery service. What is the physical mailing address for Forms 8966 and Form 1042?
Q13. I am an American citizen living abroad and my foreign bank is requesting my social security number, do I have to comply and if so, why?
Q14. How do I submit a request for an initial or additional extension of time to file Forms 8966 for tax year 2015?
Q15. How do I submit a request to waive the requirement to file Forms 8966 electronically for tax year 2015?
Q16. What title should the RO include when indicating their business title in the RO information section of the registration?
Q17. How many Global Intermediary Identification Numbers (GIINs) should a single FI have?
Q18. What are the registration and GIIN requirements for bulk acquisition and merger events?
Q19. What do I need to do if I haven’t received a response to my submission of Form 8809-I when I requested an additional 90 Day Extension to file Form 8966?

Reporting
Q1. Are filers of Form 8966 required to file a nil report?
Q2. When is Form 8966 due for reporting with respect to calendar year 2014 for participating FFIs and Reporting Model 2 FFIs?

Request for Additional Extension of Time to File Form 8966 for Tax Year 2014
Q1. How do I submit a request for additional extension of time to file Forms 8966 for tax year 2014?

Request for Waiver from Filing Form 8966 Electronically for Tax Year 2014
Q1. How do I submit a request to waive the requirement to file Forms 8966 electronically for tax year 2014?

FATCA Registration Self-Help
FATCA Registration System Technical Support
Comment on FATCA Compliance
Additional Support
Qualified Intermediaries/Withholding Foreign Partnerships/Withholding Foreign Trusts.

Q1. How does a Financial Institution that is not currently a Qualified Intermediary (“QI”), a Withholding Foreign Partnership (“WP”), or a Withholding Foreign Trust (“WT”) register to become one?
The process to become a QI, WP or WT has not been modified by the provisions of FATCA.
The application for Qualified Intermediary status can be found here: QI Application
Information on acquiring Withholding Foreign Partnership, or Withholding Foreign Trust status can be found here: WP/WT Application
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Q2. How do FIs that are currently QIs, WPs and WTs renew their agreements?
Existing QIs, WPs and WTs are required to renew their QI agreements through the FATCA registration website as part of their FATCA registration process.
All QI, WP, or WT agreements that would otherwise expire on December 31, 2013 will be automatically extended until June 30, 2014. (Notice 2013-43; 2013-31 IRB 113).
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Q3. I am not currently a QI/WP/WT. Can I use the LB&I registration portal to register for FATCA and become a new QI/WP/WT?
No.
QI/WP /WT status can only obtained by completing and submitting a Form 14345 (“QI Intermediary Application”) and Form SS-4 (“Application for Employer Identification Number”) directly to the QI Program. Interested QIs/WPs/WT should submit the required paperwork to the QI program and separately use the FATCA registration portal to obtain a GIIN for FATCA purposes. FFIs can not become a new QI/WP/WT through the FATCA portal.
Applications for QI/WP/WT status can be made to:
IRS-Foreign Intermediary Program
Attn: QI/WP/WT Applications
290 Broadway, 12th floor
New York City, New York 10007
Note: Form 14345 (“QI Intermediary Application”) should be used for WPs and WTs in addition to QIs.
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Q4. Must an FI become a QI/WP/WT in order to register under FATCA?
An FI is not required to obtain QI/WP or WT status to register under FATCA. If at the time of FATCA registration, the FI does not have in effect a withholding agreement with the IRS to be treated as a QI, WP or WT, the FI will indicate “Not applicable” in box 6 and will continue with the registration process.
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Q5. If an FFI has a QI/WP/WT agreement in place, does the Responsible Party for purposes of the QI/WP/WT Agreement also have to the serve as the FFI’s Responsible Officer?
No, the FFI’s Responsible Party for purposes of a QI/WP/WT Agreement does not have to be the Responsible Officer chosen by the FFI for purposes of certification under the regulations or for FATCA Registration purposes.
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Q6. If a member of the Expanded Affiliated Group is a Qualified Intermediary/Withholding Trust/Withholding Partnership, does the Lead Financial Institution renew the Qualified Intermediary/Withholding Trust/Withholding Partnership agreement on behalf of the member or does the member renew its own agreement?
Each Member FI with a Qualified Intermediary/Withholding Trust/Withholding Partnership (“QI/WP/WT”) agreement will renew its own agreement on the registration system. When a Member is completing its registration it will be asked about whether it maintains and seeks to renew a QI/WP/WT agreement with the Service. If the Member indicates it has one of these agreements and would like to renew the agreement, the Member will do so in Part 3 of the registration system in addition to claiming status as a participating FFI or registered-deemed compliant FFI (and obtaining its required GIINs).
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Q7. How will Withholding Foreign Partnerships (WP) and Withholding Foreign Trusts (WT) renew their WP and WT agreements, if the revised WP and WT agreements will not be published before June 30, 2014?
Treasury and the IRS anticipate publishing the revised withholding agreements for Withholding Foreign Partnerships (WPs) and Withholding Foreign Trusts (WTs) in July 2014. Because an existing agreement for an entity acting as a WP or WT expires after June 30, 2014 unless renewed before then, a WP or WT that seeks to renew its status as a WP or WT is required to do so by June 30, 2014 by submitting a registration form through the FATCA registration website. See Notice 2013-43, 2013-31 I.R.B. 113 for the automatic extension provided for certain WP and WT agreements until June 30, 2014. Notwithstanding this requirement, the IRS will permit a WP or WT to represent itself as a WP or WT to a withholding agent for a payment received before August 1, 2014 provided that the WP or WT continues to comply with its obligations under a WP or WT agreement in effect as of June 30, 2014. The allowance provided in the preceding sentence does not extend to a WP or WT that is a foreign financial institution (FFI) that does not obtain a chapter 4 status required of a WP or WT that is an FFI by the date of the payment. See §1.1441-5(c)(2)(ii) and (e)(5)(v) for the chapter 4 status required of a WP or WT that is an FFI. Apart from this chapter 4 status requirement, an entity that wishes to renew its status as a WP or WT and obtain the benefit of this transitional treatment will have until July 31, 2014 to register with the IRS to renew its WP or WT status and will not be required to assume the requirements of an updated agreement before August 1, 2014 (regardless of whether the entity registers for WP or WT status before or after the publication date of the revised agreement). Because the revised WP and WT agreements will require these entities to assume primary chapter 4 withholding responsibilities with respect to their partners, beneficiaries and owners (as applicable) under sections 1471 and 1472 in addition to their existing withholding requirements under the WP and WT agreements, a WP or WT that makes a distribution for which withholding is required under chapter 4 before August 1, 2014 with respect to a partner, beneficiary or owner and does not withhold may apply the procedures referenced in §1.1474-2(b) to satisfy any underwithholding. See the instructions to Form 8957, Foreign Tax Compliance Act (FATCA) Registration, for further information regarding the registration of an entity seeking to renew a WP or WT agreement.
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Q8. When will the terms of the revised QI Agreement set forth in Revenue Procedure 2014-39 be effective for: (a) entities seeking QI status, and (b) entities seeking renewal of their QI Agreements?
On June 27, 2014, Treasury and the IRS published a revised qualified intermediary (QI) agreement in Revenue Procedure 2014-39, 2014-29 I.R.B. 151. Section 1 of the Revenue Procedure provides that an entity seeking QI status (other than a renewal) that submits an application to the IRS before July 31, 2014 and that is approved by the IRS during the calendar year may, for the period beginning on January 1, 2014 and ending on June 30, 2014, act as a QI in accordance with the QI agreement set forth in Notice 2000-12, 2001-1 C.B. 387, as if the QI agreement were effective during that period. With respect to an entity that applies the allowance described in the preceding sentence, the entity’s QI agreement set forth in Rev. Proc. 2014-39 will be effective on June 30, 2014, regardless of whether the entity’s QI status is approved later during the calendar year, subject to the allowance provided in the next paragraph for how a QI may apply the QI agreement before August 1, 2014. Additionally, the IRS will require that the entity register on the FATCA registration website with respect to its chapter 4 status (if applicable) by the date is that is 90 days from the date the entity is approved for QI status.
With respect to an entity with a QI agreement in effect before June 30, 2014, the Revenue Procedure provides that its agreement expired on June 30, 2014 and further provides that an entity that has submitted a renewal application/request in the manner described in the Revenue Procedure has a revised QI agreement is effective on June 30, 2014. For purposes of this requirement, the IRS will permit a QI to renew its status as a QI (including on the FATCA registration portal when required) on or before July 31, 2014, to be eligible to act as a QI beginning June 30, 2014. A QI will not be required to assume the further requirements of the updated agreement in the Revenue Procedure before August 1, 2014 (regardless of whether the QI registered to renew its QI status before June 30, 2014), and may apply the provisions of the QI agreement set forth in Notice 2000-12 between June 30, 2014 and July 31, 2014. A renewal of QI status after July 31, 2014, will be effective on the date of renewal (and will not be retroactive). Therefore, QIs are encouraged to renew their agreement by July 31, 2014.
Because a QI is a withholding agent for chapter 4 purposes, a QI that receives a payment for which withholding is required under chapter 4 after June 30, 2014 and before August 1, 2014 with respect to an account holder may apply the procedures referenced section 9.05 of the QI Agreement to satisfy any under withholding. See the instructions to Form 8957, Foreign Tax Compliance Act (FATCA) Registration, for further information regarding the registration of an entity seeking to renew a QI agreement.
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Q9. If an entity submits an application for WP or WT status on or after April 1 and is approved for such status, what will the effective date of its WP or WT agreement be?
Section 12.01(B) of the WP and WT agreements (Rev. Proc. 2014-47, 2014-35 I.R.B. 393) provides that, for calendar years after 2014, if WP’s or WT’s application for WP or WT status is submitted on or after April 1, the effective date of the agreement is January 1 of the calendar year following the year in which the application was submitted.
If an entity submits an application to be a WP or WT on or after April 1 and does not receive any reportable amounts between January 1 of the calendar year in which the WP or WT application is submitted and the date of approval, the entity will have a WP or WT agreement with an effective date of the date it is issued a WP-EIN (provided that it obtains a GIIN within 90 days of such approval, unless it is a retirement fund). All other entities applying for WP or WT status on or after April 1 that are approved during the calendar year will have a WP or WT agreement with an effective date of January 1 of the following calendar year.
Added: 10-07-2015
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IGA Registration
Q1. Please provide a link that lists the jurisdictions treated as having in effect a Model 1 or Model 2 IGA.
The U.S. Department of Treasury’s list of jurisdictions that are treated as having an intergovernmental agreement in effect can be found by clicking on the following link: IGA LIST
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Q2. How do Foreign Financial Institutions in Model 1 jurisdictions register on the FATCA registration website?
Financial Institutions that are treated as Reporting Financial Institutions under a Model 1 IGA (see the list of jurisdictions treated as having an IGA in effect at IGA LIST) should register as Registered Deemed-Compliant Foreign Financial Institutions.
More information on registration can be found in the FATCA Registration Online User Guide: FATCA Registration Resources Page (See Section 2.4 “Special Rules for Registration”)
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Q3. How do Foreign Financial Institutions in Model 2 jurisdictions register on the FATCA registration website?
Financial Institutions that are treated as Reporting Financial Institutions under a Model 2 IGA (see the list of jurisdictions treated as having an IGA in effect at IGA LIST) should register as Participating Foreign Financial Institutions.
More information on registration can be found in the FATCA Registration Online User Guide: FATCA Registration Resources Page (See Section 2.4 “Special Rules for Registration”)
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Q4. We are an FFI in a country that has not signed an IGA, and the local laws of our country do not allow us to report U.S. accounts or withhold tax. What is our FATCA classification?
Unless the Treasury website provides that your country is treated as having an IGA in effect, then, because of its local law restrictions, this FFI should register as a Limited FFI provided it meets the definition shown directly below. See FATCA – Archive for a list of countries treated as having an IGA in effect.
A Limited FFI means an FFI that, due to local law restrictions, cannot comply with the terms of an FFI Agreement, or otherwise be treated as a PFFI or RDCFFI, and that is agreeing to satisfy certain obligations for its treatment as a Limited FFI.
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Q5. In a Model 1 IGA jurisdiction, does the FFI need to fill out Question 10 about Responsible Officers?
Yes, if an FFI treated as a reporting Model 1 FFI wishes to have a GIIN, a Responsible Officer must be designated in Part 1, line 10 of Form 8957. Please see the FAQs on Responsible Officers for further information.
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Q6. Does an FFI in a Model 1 IGA jurisdiction need to register before July 1, 2014, if the FFI is part of an EAG?
No. The chapter 4 regulations generally provide that, in order for withholding not to apply, a withholding agent must obtain the GIIN of a PFFI or an RDCFFI for payments made after June 30, 2014. A special rule in these regulations, however, provides that a withholding agent does not need to obtain a reporting Model 1 FFI’s GIIN for payments made before January 1, 2015. As a result, a reporting Model 1 FFI will have additional time beyond July 1, 2014, to register and obtain a GIIN in order to ensure that it is included on the IRS FFI list before January 1, 2015. Additionally, a reporting Model 1 FFI is not required to register prior to December 31, 2014, in order for its expanded affiliated group to meet the requirements of Treas. Reg. §1.1471-4(e)(1).
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Q7. Does an entity in a Model 1 jurisdiction that, relying on the definition of a nonreporting financial institution under the applicable IGA, qualifies as a deemed-compliant FFI or an exempt beneficial owner under relevant U.S. Treasury Regulations, need to register on the FATCA registration website?
A nonreporting financial institution in a Model 1 jurisdiction is treated as a certified deemed-compliant FFI and is not required to register unless it (1) is subject to a registration requirement under its QI Agreement (see Rev. Proc. 2014-39) or its WP or WT Agreement (see Rev. Proc. 2014-47), (2) will act as a sponsoring entity, (3) will act as a lead FI for one or more related entities, (4) is explicitly required to register under the applicable IGA, or (5) has a financial account on which to report to the Model 1 jurisdiction under the requirements of the applicable IGA.
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Q8. Announcement 2014-38 provides that a jurisdiction that is treated as if it has an IGA in effect, but that has not yet signed an IGA, retains such status beyond December 31, 2014, provided that the jurisdiction continues to demonstrate firm resolve to sign the IGA that was agreed in substance. Given this additional time to sign the IGA, does a reporting Model 1 FFI in such a jurisdiction need to register and obtain a GIIN before January 1, 2015?
Announcement 2014-38 does not change the requirement in the chapter 4 regulations that for payments made on or after January 1, 2015, in order for withholding not to apply, a withholding agent may treat a reporting Model 1 FFI as a registered deemed-compliant FFI only if the withholding agent has a withholding certificate identifying the payee as a registered deemed-compliant FFI and the withholding certificate contains a GIIN for the payee that is verified in the manner described in those regulations. Thus, to avoid withholding on certain payments made on or after January 1, 2015, a reporting Model 1 FFI should register and obtain a GIIN to properly certify its status to a withholding agent required to document the FFI for chapter 4 purposes. A reporting Model 1 FFI that has registered but not yet obtained a GIIN should indicate to its withholding agent that its GIIN is &quotapplied for,&quot and in such case, the withholding agent will have 90 days from the date it receives the Form W-8 to obtain a GIIN and to verify the accuracy of the GIIN against the published IRS FII list before it has reason to know that the payee is not a registered deemed-compliant FFI.
Announcement 2014-38 similarly does not change the timing of any other due diligence and reporting requirements in the chapter 4 regulations.
Added: 12-22-2014
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Expanded Affiliated Groups
Q1. For registration purposes, can an EAG with a Lead FI and 2 Member FIs be divided into: (1) a group with a Lead FI and a member FI, and (2) a member FI that will register as a Single FI?
Yes. An EAG may organize itself into subgroups, so long as all entities with a registration requirement are registered. An FI that acts as a Compliance FI for any members of the EAG is, however, required to register each such member as would a Lead FI for such members.
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Q2. What is required for an entity to be a Lead FI?
A Lead FI means a USFI, FFI, or a Compliance FI that will initiate the FATCA Registration process for each of its Member FIs that is a PFFI, RDCFFI, or Limited FFI and that is authorized to carry out most aspects of its Members’ FATCA Registrations. A Lead FI is not required to act as a Lead FI for all Member FIs within an EAG. Thus, an EAG may include more than one Lead FI that will carry out FATCA Registration for a group of its Member FIs. A Lead FI will be provided the rights to manage the online account for its Member FIs. However, an FFI seeking to act as a Lead FI cannot have Limited FFI status in its country of residence. See Rev. Proc. 2014-38 to review the revised FFI agreement for other requirements of a Lead FI that is also a participating FFI.
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Q3. Can a Member FI complete its FATCA registration and obtain a GIIN if the Lead FI for that Member FI has not yet registered under FATCA?
No, a Member FI can only register after its Lead FI has registered. When the Member FI does register, it should indicate in Part 1, line 1, that it is a member of an expanded affiliated group.
In Part 2 of the Lead FI’s registration, the Lead FI will add basic identifying information for each Member, and the system will create the Member FATCA accounts. Each Member FI will then be required to log into the system and complete its registration.
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Q4. Is a limited FFI who is a member of an Expanded Affiliated Group subject to Chapter 4 withholding?
Yes. A limited FFI (regardless of whether it is a member of an Expanded Affiliated Group) must identify itself to withholding agents as a nonparticipating FFI and, as a result, is subject to Chapter 4 withholding. Thus, while limited FFIs are generally required to register, they will not be issued GIINs.
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Sponsoring/Sponsored Entities
Q1. We are a Sponsoring Entity, and we would like to register our Sponsored Entities. How do we register our Sponsored Entities?
The Sponsoring Entity that agrees to perform the due diligence, withholding, and reporting obligations of one or more Sponsored Entities pursuant to Treas. Reg. §1.1471-5(f)(1)(i)(F) should register with the IRS via the FATCA registration website to be treated as a Sponsoring Entity. To allow a Sponsoring Entity to register its Sponsored Entities with the IRS, the Sponsoring Entity must register its Sponsored Entities using the FATCA registration website see FATCA Online Registration User Guide for additional instructions on how to add Sponsored Entities.
While a Sponsoring Entity is required to register its Sponsored Entities for those entities to obtain GIINs, the temporary and proposed regulations provide a transitional rule that, for payments prior to January 1, 2016, permit a Sponsored Entity to provide the GIIN of its Sponsoring Entity on withholding certificates if it has not yet obtained a GIIN. Thus, a Sponsored Entity does not need to provide its own GIIN until January 1, 2017 and is not required to register before that date.
Updated: 02-02-2016
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Responsible Officers and Points of Contact
Q1. What is a Point Of Contact (POC)?
The Responsible Officer listed on line 10 of Form 8957 (or the online registration system) can authorize a POC to receive FATCA-related information regarding the FI, and to take other FATCA-related actions on behalf of the FI. While the POC must be an individual, the POC does not need to be an employee of the FI. For example, suppose that John Smith, Partner of X Law Firm, has been retained and been given the authority to help complete and submit the FATCA Registration on behalf of an FI. John Smith should be identified as the POC, and in the Business Title field for this POC, it should state Partner of X Law Firm.
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Q2. Is the Responsible Officer required to be the same person for all lines on Form 8957 or the online registration (“FATCA Registration”)?
No, it is not required that the Responsible Officer (“RO”) be the same person for all lines on Form 8957 or the online registration. It is possible, however, that the same person will have the required capacity to serve as the RO for all FATCA Registration purposes.
The term “RO” is used in several places in the FATCA Registration process. In determining an appropriate RO for each circumstance, the Financial Institution (“FI”) or direct reporting NFFE should review the capacity requirements and select an individual who meets those requirements. This will be a facts and circumstances determination.
Please note that the responsible officer used for registration purposes may differ from the certifying responsible officer of an FFI referenced in Treasury Regulation §1.1471-1(b)(116). (See, however, below regarding “Delegation of RO Duties.”)
Below is a description of the required RO capacity per line:
Part 1, Question 10 (FATCA RO for the Financial Institution)
Language from the Form 8957 Instructions and the FATCA Online Registration User Guide specifies that the RO for question 10 purposes is a person authorized under applicable local law to establish the statuses of the entity’s home office and branches as indicated on the registration form. (See FAQ below for what it means to &quotestablish the FATCA statuses&quot of the FI’s home office and branches or direct reporting NFFE.)
Part 1, Question 11b (Point of Contact authorization)
The RO identified in question 11b must be an individual who is authorized under local law to consent on behalf of the FI or direct reporting NFFE (“an authorizing individual”) to the disclosure of FATCA-related tax information to third parties. By listing one or more Points of Contact (each, a “POC”) in question 11b and selecting “Yes” in question 11a, the authorizing individual identified at the end of question 11b (to the right of the checkbox) is providing the IRS with written authorization to release the entity’s FATCA-related tax information to the POC. This authorization specifically includes authorization for the POC to complete the FATCA Registration (except for Part 4), to take other FATCA-related actions, and to obtain access to the FI’s (or direct reporting NFFE’s) tax information. Once the authorization is granted, it is effective until revoked by either the POC or by an authorizing individual of the FI or direct reporting NFFE.
Part 4
The authority required for an individual to be an RO for purposes of Part 4 is substantially similar to the authority required for RO status under Treas. Reg. § 1.1471-1(b)(116).
The RO designated in Part 4 must be an individual with authority under local law to submit the information provided on behalf of the FI or direct reporting NFFE. In the case of FIs or FI branches not governed by a Model 1 IGA, this individual must also have authority under local law to certify that the FI meets the requirements applicable to the FI status or statuses identified on the registration form. This individual must be able to certify, to the best of his or her knowledge, that the information provided in the FI’s or direct reporting NFFE’s registration is accurate and complete. In the case of an FI, the individual must be able to certify that the FI meets the requirements applicable to the status(es) identified in the FI’s registration. In the case of a direct reporting NFFE, the individual must be able to certify that the direct reporting NFFE meets the requirements of a direct reporting NFFE under Treas. Reg. § 1.1472-1(c)(3).
An RO (as defined for purposes of Part 4) can delegate authorization to complete Part 4 by signing a Form 2848 “Power of Attorney Form and Declaration of Representative” or other similar form or document (including an applicable form or document under local law giving the agent the authorization to provide the information required for the FATCA Registration).
Note: While the certification in Part 4 of the online registration does not include the term “responsible officer,” the FATCA Online Registration User Guide provides that the individual designated in Part 4 must have substantially the same authority as the RO as defined for purposes of Form 8957, Part 4.
Delegation of RO Duties
While the ROs for purposes of Question 10, Question 11b, and Part 4 of the FATCA Registration may be different individuals, in practice it will generally be the same individual (or his/her delegate)). The regulatory RO is responsible for establishing and overseeing the FFI’s compliance program. The regulatory RO may, but does not necessarily have to, be the registration RO for purposes of 1) ascertaining and completing the chapter 4 statuses in the registration process; 2) receiving the GIIN and otherwise interacting with the IRS in the registration process; and 3) making the Part 4 undertakings. Alternatively, the regulatory RO, or the FFI (through another individual with sufficient authority), may delegate each of these registration roles to one or more persons pursuant to a delegation of authority (such as a Power of Attorney) that confers the particular registration responsibility or responsibilities to such delegate(s). The scope of the delegation, and the delegate’s exercise of its delegated authority within such scope, will limit the scope of the potential liability of the delegate under the rules of agency law , to the extent applicable. The ultimate principal, whether that is the regulatory RO or the FFI, remains fully responsible in accordance with the terms and conditions reflected in the regulations, and other administrative guidance to the extent applicable under FATCA, the regulations
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Q3. The Instructions for Form 8957 state that for purposes of Part 1, question 10, “. . . RO means the person authorized under applicable local law to establish the statuses of the FI’s home office and branches as indicated on the registration form.” What does it mean for an RO to have the authority to “establish the statuses of the FI’s home office and branches as indicated on the registration form”?
To have the authority to “establish the statuses” for purposes of question 10, an RO must have the authority to act on behalf of the FI to represent the FATCA status(es) of the FI to the IRS as part of the registration process. This RO must also have the authority under local law to designate additional POCs.
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Q4. My FI plans on employing an outside organization (or individual) solely for the purpose of assisting with the registration process. Once registration is complete, or shortly thereafter, my FI intends to discontinue its relationship with this organization. Is this permissible under the FATCA registration system? How should my FI use the registration system to identify this relationship?
Yes, the FI or direct reporting NFFE may employ an outside organization to assist with FATCA registration and discontinue the relationship with the outside organization once registration is complete. As part of the registration process, an FI or direct reporting NFFE may appoint up to five POCs who are authorized to take certain FATCA-related actions on behalf of the entity, including the ability to complete all parts of the FATCA Registration (except for Part 4), to take other appropriate or helpful FATCA-related actions, and to obtain access to the entity’s FATCA-related tax information. The POC authorization must be made by an RO within the meaning of Part 1, question 10. Part 4 must be completed by the RO or a duly authorized agent of the RO. (See FAQ 1 for a discussion of the process for delegating authorization to complete Part 4.)
Once the services of a POC are no longer needed, the RO may log into the online FATCA account and delete the POC. This process revokes the POC’s authorization. At this point, the Responsible Officer can input a new POC, or leave this field blank if they no longer wish to have any POC other than the RO listed on Line 10.
If a third-party adviser that is an entity is retained to help the FI or direct reporting NFFE complete its FATCA registration process, the name of the third-party individual adviser that will help complete the FATCA registration process should be entered as a POC in Part 1, question 11b, and the “Business Title” field for that individual POC should be completed by inserting the name of the entity and the POC’s affiliation with the entity. For example, suppose that John Smith, Partner of X Law Firm, has been retained and been given the authority to help complete the FATCA Registration on behalf of FI Y. John Smith should be identified as the POC, and in the Business Title field for this POC, it should state Partner of X Law Firm.
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Q5. For each of the following FATCA classifications (i.e. Participating Foreign Financial Institution “PFFI”, PFFI that elects to be part of a consolidated compliance program, Registered Deemed-Compliant Foreign Financial Institution “RDCFFI”, Reporting Model 1 FFI, Limited FFI and US Financial Institution “USFI”) what type of individual may serve as a Responsible Officer for purposes of Part 1, Question 10 of the FATCA Registration?
With respect to a PFFI, an RO is an officer of the FFI (or an officer of any Member FI that is a PFFI, Reporting Model 1 FFI or Reporting Model 2 FFI) with sufficient authority to fulfill the duties of a Responsible Officer described in a FFI Agreement.
With respect to a PFFI that elects to be part of a consolidated compliance program, an RO is an officer of the Compliance FI with sufficient authority to fulfill the duties of a Responsible Officer described in the FFI Agreement on behalf of each FFI in the compliance group (regardless of whether the FFI is a Limited FFI or treated as a Reporting Model 1 FFI or Reporting Model 2 FFI).
With respect to a RDCFFI, other than a RDCFFI that is a Reporting Model 1 FFI, an RO is an officer of the FI (or an officer of any Member FFI that is a PFFI, Reporting Model 1 FFI, or Reporting Model 2 FFI) with sufficient authority to ensure that the FFI meets the applicable requirements to be treated as a RDCFFI.
With respect to a Reporting Model 1 FFI, an RO is any individual specified under local law to register and obtain a GIIN on behalf of the FFI. If, however, the Reporting Model 1 FFI operates any branches outside of a Model 1 IGA jurisdiction, then the RO identified must be an individual who can satisfy the requirements under the laws of the Model 1 IGA jurisdiction and the requirements relevant to the registration type selected for each of its non-Model 1 IGA branches.
With respect to a Limited FFI, an RO is an officer of the Limited FFI (or an officer of any Member FI that is a PFFI, Reporting Model 1 FFI, or Reporting Model 2 FFI) with sufficient authority to ensure that the FI meets the applicable requirements to be treated as a Limited FFI.
With respect to a USFI that is registering as a “Lead FI”, an RO is any officer of the FI (or an officer of any Member FI) with sufficient authority to register its Member FIs and to manage the online FATCA accounts for such members.
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Q6. Part 4 of the online registration system* states:
By checking this box, I, _________, [(the responsible officer or delegate thereof (herein collectively referred to as the “RO”)], certify that, to the best of my knowledge, the information submitted above is accurate and complete and I am authorized to agree that the Financial Institution (including its branches, if any) will comply with its FATCA obligations in accordance with the terms and conditions reflected in regulations, intergovernmental agreements, and other administrative guidance to the extent applicable to the Financial Institution based on its status in each jurisdiction in which it operates.
*Note: Part 4 of Form 8957 contains a substantially similar certification.
Can this statement be broken down into two declarations of the RO, as follows?
(i) The RO certifies that, to the best of its knowledge, the information submitted above is accurate and complete.
(ii) The RO agrees that the FI (including its branches, if any) will comply with its FATCA obligations in accordance with the terms and conditions reflected in regulations, intergovernmental agreements, and other administrative guidance to the extent applicable to the FI based on its status in each jurisdiction in which it operates.
Yes.
Does the first declaration above mean that the RO certifies that, to the best of its knowledge, the FI meets the requirements of its claimed status?
Yes.
Does the second declaration above apply to an FI treated as a reporting Model 2 FFI?
Yes.
Does the second declaration above (relating to a Participating FFI) require the signing party to ensure that the FFI and its member FFIs (including its branches, if any) comply with its respective obligations under the terms of its FFI Agreement or any applicable intergovernmental agreement and any such applicable local law?
The second declaration requires the signing party to be able to certify that, to the best of the signing party’s knowledge at the time the FATCA registration is signed, the FI and its member FFIs intend to comply with their respective FATCA obligations.
A Participating FFI will have its certifying responsible officer (as defined in Treasury Regulation §1.1471-1(b)(116)) periodically certify to the IRS regarding the FFI’s compliance with its FFI agreement. As noted in FAQ 1, the RO identified in Part 4 will normally be an individual with sufficient authority to be eligible for RO status under Treas. Reg. § 1.1471-1(b)(116). (See, however, above regarding “Delegation of RO Duties.”)
How do the certifications in Part 4 apply to FIs treated as reporting Model 1 FFIs?
The first declaration above applies to FIs treated as reporting Model 1 FFIs and, as such, the RO of an FI treated as a reporting Model 1 FFI certifies that, to the best of the RO’s knowledge, the information submitted as part of the FATCA Registration process is accurate and complete. The second declaration, however, has limited applicability to FIs treated as reporting Model 1 FFIs because the FI does not have ongoing FATCA compliance obligations directly with the IRS. Instead, the compliance and reporting obligations of an FI treated as a reporting Model 1 FFI are to its local authority. However, a reporting Model 1 FFI that has branches (as identified in Part 1, line 9 of Form 8957) that are located outside of a Model 1 IGA jurisdiction will also agree to the terms applicable to the statuses of such branches. Additionally, an FI (including an FI in a Model 1 IGA jurisdiction) that is also registering to renew its QI, WP, or WT Agreement will agree to the terms of such renewed QI, WP, or WT Agreements by making the second declaration.
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Financial Institutions
Q1. Are U.S. Financial Institutions (USFIs) required to register under FATCA? If so, under what circumstances would a USFI register? Does it matter whether the USFI has a branch in an IGA jurisdiction?
A USFI is generally not required to register under FATCA, regardless of whether it maintains a foreign branch. However, a USFI must register if the USFI chooses to become a Lead FI and/or a Sponsoring Entity, or if the USFI seeks to maintain QI status with respect to one or more of its foreign branches. Also, a USFI with a foreign branch that is a reporting Model 1 FFI must register (and identify each such branch when registering).
A USFI with a foreign branch that is a non-QI branch and that is a reporting Model 2 FFI is not required to register with the IRS solely because it maintains a branch in the Model 2 jurisdiction. A USFI does not execute an FFI agreement with respect to the chapter 4 requirements of such a branch, but is subject to the withholding and reporting requirements under chapter 4 applicable to a U.S. withholding agent. Notwithstanding that the USFI does not execute an FFI agreement with respect to the chapter 4 requirements of such a branch, the USFI may, for accounts maintained by the branch, use the procedures set forth in Annex I of the applicable Model 2 IGA to determine which of the branch’s account holders are NPFFIs or NFFEs for which withholding or reporting under section 1472 may apply.
See Treas. Reg. § 1.6049-5(c) regarding the extent to which the documentation permitted under an IGA (including for identifying U.S. accounts (or U.S reportable accounts maintained by a reporting Model 1 FFI)) may be used to satisfy the documentation rules of chapter 61 for a payor.
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Q2. Is a Foreign Financial Institution (“FFI”) required to obtain an EIN?
If the FFI has a withholding obligation and will be filing Forms 1042 and Forms 1042-S with the Internal Revenue Service, it will be required to have an EIN. Please see publication 515 (“Withholding of Tax on Nonresident Aliens and Foreign Entities”) for further information about U.S. Withholding requirements. See Pub. 515. An FFI is also required to obtain an EIN when it is a QI, WP, or WT (through the application process to obtain any such status) or when the FFI is a participating FFI that elects to report its U.S. accounts on Forms 1099 under Treas. Reg. §1.1471-4(d)(5).
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Q3. How does a FFI apply for a EIN if it does not already have one?
If a FFI does not have an EIN, it may apply for one using Form SS-4 (“Application for Employer Identification Number”) or the online registration system. See Apply-for-an-Employer-Identification-Number-(EIN)-Online for more information.
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Exempt Beneficial Owners
Q1. We are a foreign central bank of issue. Will we be subject to FATCA withholding if we do not register?
You will generally be exempt from FATCA Registration and withholding if you meet the requirements to be treated as an exempt beneficial owner (e.g. as a foreign central bank of issue described in Treas. Reg. § 1.1471-6(d), as a controlled entity of a foreign government under Treas. Reg. §1.1471-6(b)(2), or as an entity treated as either of the foregoing under an applicable IGA). A withholding agent is not required to withhold on a withholdable payment to the extent that the withholding agent can reliably associate the payment with documentation to determine the portion of the payment that is allocable to an exempt beneficial owner in accordance with the regulations. However, an exempt beneficial owner may be subject to withholding on payments derived from the type of commercial activity described in Treas. Reg. § 1.1471-6(h).
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Q2. We are a foreign pension plan. Will we be subject to FATCA withholding if we do not register?
You will be exempt from FATCA Registration and withholding if you meet the requirements to be treated as a retirement fund described in Treas. Reg. § 1.1471-6(f), or under an applicable IGA. A withholding agent is not required to withhold on a withholdable payment to the extent that the withholding agent can reliably associate the payment with documentation to determine the portion of the payment that is allocable to an exempt beneficial owner (in this case, a retirement fund) in accordance with the regulations.
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NFFES
Q1. How should an entity seeking the FATCA status of “direct reporting NFFE” (other than a sponsored direct reporting NFFE) register for this status to obtain a GIIN in order to avoid FATCA withholding?
A direct reporting NFFE is eligible to register for this status and when registering should complete an online registration (or, alternatively, submit a paper Form 8957) based on the instructions provided in this FAQ. For registrations occurring in years after 2014, it is anticipated that both the online registration user guide and the Instructions for Form 8957 will be updated to incorporate instructions for registering direct reporting NFFEs.
In general, for purposes of completing the registration of a direct reporting NFFE, substitute the words “direct reporting NFFE” for the words “financial institution” wherever they appear in the online registration user guide (or in the Instructions for Form 8957). Unless specific instructions for a registration question are described here in this FAQ, please use the generally applicable instructions provided in the online registration user guide (or in the Instructions for Form 8957).
Part 1
Question 1 – – Select “Single”.
Question 4 – – Select “None of the above”.
Question 6 – – Select “Not applicable”.
Question 7 – – Select “No”. (If using the portal online, selecting “no” will automatically skip Questions 8 and 9.)
Question 8 – – Skip this question (which relates to branches)
Question 9 – – Skip all parts (a) through (c) of this question (which relate to branches).
Question 10 – – Enter the information of the individual who will be responsible for ensuring that the direct reporting NFFE meets its FATCA reporting obligations and will act as a point of contact with the IRS in connection with its status as a direct reporting NFFE.
Part 2 – – It is not necessary for a direct reporting NFFE to complete this section. (If using the portal online, selecting Single in question 1 will automatically skip Part 2.)
Part 3 – – It is not necessary for a direct reporting NFFE to complete this section. (If using the portal online, selecting “Not Applicable” in question 6 will automatically skip Part 3.)
Part 4 – – The individual who completes this part must have the authority to provide the certification.
Please note the following for a NFFE that is a Qualified Intermediary (QI), a Withholding Foreign Partnership (WP), or a Withholding Foreign Trust (WT):
A NFFE that registers and obtains a GIIN should renew its QI/WP/WT agreement (as applicable) through the portal and generally follow the instructions above. However, Part 1, Question 6 should be answered to reflect the NFFE’s appropriate QI/WP/WT status. NFFEs that obtain GIINs include (i) NFFEs that are acting as QIs with respect to their owners (which are required to register as direct reporting NFFEs), and (ii) QI/WP/WT NFFEs that are also Sponsoring Entities for chapter 4 purposes.
A NFFE cannot execute a QI/WP/WT agreement through the portal (other than a renewal of an existing agreement). A NFFE that is registered on the portal for its chapter 4 status as either a direct reporting NFFE or Sponsoring Entity and is seeking initial QI/WP/WT status must execute a QI/WP/WT agreement through the existing traditional paper processes for those entities. Once the NFFE receives the appropriate EIN to act as a QI/WP/WT through that process, the NFFE should amend Part 1, Question 6 of its FATCA registration on the portal to reflect its new status as a QI/WP/WT and add its EIN to its registration.
Note that an entity that wishes to renew its status as a WP or WT will have until July 31, 2014, to register with the IRS to renew its WP or WT status and will not be required to assume the requirements of an updated agreement before August 1, 2014
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Q2. How should a sponsor of a sponsored direct reporting NFFE register itself for this status and obtain a GIIN?
A sponsor of a sponsored direct reporting NFFE is a sponsoring entity (see Treas. Reg. § 1.1471-1T(b)(124)) and should complete an online registration (or, alternatively, submit a paper Form 8957) as a sponsoring entity, based on the instructions provided in this FAQ. A sponsoring entity need only complete one registration to act as the sponsor for both sponsored FFIs and sponsored direct reporting NFFEs. For registrations occurring in years after 2014, it is anticipated that both the online registration user guide and the Instructions for Form 8957 will be updated to incorporate this information, including by incorporating the definition of sponsoring entity provided in Treas. Reg. § 1.1471-1T(b)(124).
In general, for purposes of having a sponsor register a sponsored direct reporting NFFE, substitute the words “sponsor of a direct reporting NFFE” for the words “sponsoring entity” wherever they appear in the online registration user guide (or in the Instructions for Form 8957). Unless specific instructions for a registration question are described here in this FAQ, please use the generally applicable instructions provided in the online registration user guide (or in the Instructions for Form 8957).
Part 1
Question 1 – – Select “Sponsoring Entity”.
Question 4 – – Select “None of the above”.
Question 6 – – Select “Not applicable”.
Question 7 – – Select “No”. (If using the portal online, selecting “no” will automatically skip Questions 8 and 9)
Question 8 – – Skip this question (which relates to branches)
Question 9 – – Skip all parts (a) through (c) of this question (which relate to branches).
Question 10 – – Enter the information of the individual who will be responsible for ensuring that the direct reporting NFFE meets its FATCA reporting obligations and who will act as a point of contact with the IRS in connection with its obligations as a sponsoring entity.
Part 2 – – It is not necessary for a sponsor of a direct reporting NFFE to complete this section. (If using the portal online, selecting Sponsoring Entity in question 1 will automatically skip Part 2.)
Part 3 – – It is not necessary for a sponsor of a direct reporting NFFE to complete this section. (If using the portal online, selecting “Not Applicable” in question 6 will automatically skip Part 3.)
Part 4 – – The individual who completes this part must have the authority to provide the certification.
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Q3. Can a direct reporting NFFE be registered as a Member FI?
Yes. For Part 2, Question 12, select “None of the above” as the Member Type. See above for additional information on how to register a direct reporting NFFE. As noted in the FAQs on Expanded Affiliated Groups, the use of Lead FIs is elective. Therefore, a NFFE that is part of an EAG is not required to be registered as a Member FI.
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Q4. Does a direct reporting NFFE have to separately register its branches when it completes its FATCA registration?
No. The direct reporting NFFE should register itself only and will be issued a single GIIN.
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Registration Update
Q1. Why did my registration status change to Registration Incomplete? What can I do?
If your registration status is Registration Incomplete, it is because the IRS has identified an issue with your registration. Please review your registration for any of the following errors and update it accordingly. After you have updated your registration, you must resubmit in order for your registration to be processed.
The FFI has identified itself as a Qualified Intermediary with a QI-EIN of which the IRS has no record. (If you have QI, WP or WT Agreement signed with the IRS, please contact the Financial Intermediaries Team for further assistance.)
The RO has been identified with initials only and no specific name has been provided.
The RO does not appear to be a natural person.
Notice 2013-43 stated that after January 1, 2014 the FI will need to submit a final registration. If an FI submitted a registration prior to this date, the registration status was systemically updated to Registration Incomplete on December 31, 2013.
To update and resubmit your registration, login to your FATCA account, and select “Registration – Edit/Complete/Submit” under the Available Account Options on your home page. You will be asked if you want to change your status to Initiated. Select yes, and review each page of the registration, making any necessary updates, and clicking the “next” button at the bottom of each page to continue. When you get to Part 4 of the registration, complete the information, and click on the Submit button. Your registration status will then be updated to Registration Submitted. You can go back at any time to update information.
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Q2. For each of the following FATCA classifications (i.e. Participating Foreign Financial Institution “PFFI” for Reporting Model 2 FFI, Registered Deemed Compliant Foreign Financial Institutions “RDCFFI” (for both Model 1 and non-Model 1 FFIs), Sponsoring Entity, Limited FFI or Limited Branch, Renewing QI/WP/WT, US Financial Institution “USFI” treated as a Lead FI and Direct Reporting NFFE) what is the impact of completing Part IV of the FATCA Registration?
PFFI Status for Reporting Model 2 FFI
Reporting Model 2 FFIs are registering to obtain a GIIN, provide authorization for individuals named in Part 1, Line 11 of the FATCA Registration to receive information related to FATCA registration, and to confirm that they will comply with the terms of an FFI Agreement in accordance with the FFI agreement, as modified by any applicable Model 2 IGA.
Notwithstanding the paragraph above, Reporting Model 2 FFIs operating branches outside of Model 1 or 2 IGA jurisdictions are agreeing to the terms of an FFI Agreement for such branches, unless the branches are treated as Limited Branches or are U.S. branches that are treated as U.S. persons. Additionally, Reporting Model 2 FFIs requesting renewal of a QI, WP or WT Agreement are entering into the renewed Model QI, WP, or WT Agreements, as applicable.
RDCFFI Status for Reporting Model 1 FFI
Reporting Model 1 FFIs are not entering into FFI Agreements via the FATCA registration process. Reporting Model 1 FFIs are registering to obtain a GIIN and to provide authorization for individuals named in Part 1, Line 11 of the FATCA Registration to receive information related to FATCA registration. Notwithstanding the preceding sentence, Reporting Model 1 FFIs operating branches outside of Model 1 or 2 IGA jurisdictions are agreeing to the terms of an FFI Agreement for such branches, unless the branches are treated as Limited Branches. Additionally, Reporting Model 1FFIs requesting renewal of a QI, WP or WT Agreement are entering into such renewed Model QI, WP, or WT Agreements, as applicable.
RDCFFI Status for FFI (other than a Reporting Model 1 FFI)
An FFI that is registering as an RDCFFI, other than a Reporting Model 1 FFI, is agreeing that it meets the requirements to be treated as an RDCFFI under relevant Treasury Regulations or is agreeing that it meets the requirements to be treated as a RDCFFI pursuant to an applicable Model 2 IGA.
Sponsoring Entity Status
An entity that is registering as a Sponsoring Entity is agreeing that it will perform the due diligence, reporting and withholding responsibilities of one or more Sponsored FFIs or Sponsored Direct Reporting NFFEs.
Limited FFI or Limited Branch Status
An FFI that is registering as a Limited FFI is confirming that it will comply with the terms applicable to a Limited FFI. A branch of a PFFI that is registering as a Limited Branch is confirming that it will comply with the terms applicable to a Limited Branch. GIINs will not be issued to a Limited FFI or Limited Branch.
Renewing QI/WP/WT
An FFI, including a foreign branch of a USFI, requesting renewal of a QI Agreement is agreeing to comply with the relevant terms of the renewed Model QI Agreement with respect to its branches that are identified as operating as a QI. The obligations under the renewed Model QI Agreement are in addition to any obligations imposed on the FFI to be treated as a PFFI, Reporting Model 2 FFI, RDCFFI, or Reporting Model 1 FFI.
An FFI that is applying to renew its WP or WT Agreement is agreeing to comply with the relevant terms of the renewed Model WP or WT Agreement. The obligations under the renewed Model WP or WT Agreement are in addition to any obligations imposed on the FFI to be treated as PFFI, Reporting Model 2 FFI, RDCFFI, or Reporting Model 1 FFI. Additionally, a QI, WP, or WT is also certifying that it has in place and has implemented written policies, procedures, and processes for documenting, withholding, reporting and depositing tax with respect to its chapters 3 and 61 withholding responsibilities under its QI, WP, or WT Agreement.
USFI treated as a Lead FI
A USFI that is part of an EAG and registering its Members FIs is agreeing to manage the online FATCA account for each such Member FI.
Direct Reporting NFFE
A direct reporting NFFE is agreeing to comply with the terms and obligations described under Treas. Reg. § 1.1472-1(c)(3).
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Q3. How do Trustees of Trustee-Documented Trusts register?
Trustees needing to register Trustee-Documented Trusts (a certified deemed-compliant status for FFIs under the Model 1 and Model 2 IGAs) should use the same procedures Sponsors use to register Sponsored Entities. The trustee should select “Sponsoring Entity” as its FI Type, and select “None of the above” in Part 1, Question 4. More information on how to register a Sponsoring Entity can be found in the FATCA Registration Online User Guide.
Please note that if a trustee is required to register itself based on its own applicable status as an FFI, it will do so on a separate registration, and thus will have two separate GIINs, one for such use and another for use in its capacity as a trustee of a Trustee-Documented Trust.
The Trustee-Documented Trust itself will not be registered and does not need to obtain a GIIN.
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Q4. Does an FFI registering to become a PFFI (including a reporting Model 2 FFI) need to complete a paper version of the FFI Agreement?
No. An FFI does not execute a paper version of the FFI Agreement. When a PFFI in a non-IGA jurisdiction completes its FATCA registration, the PFFI is agreeing to comply with the terms of the FFI Agreement set forth (as revised) in Rev. Proc. 2014-38. When a Reporting Model 2 FFI completes its FATCA registration, it is agreeing to comply with the terms of the FFI Agreement, as modified by the applicable Model 2 IGA. A PFFI in a non-IGA jurisdiction or a reporting Model 2 FFI may also register on the FATCA registration website on behalf of one or more of its branches located in a non-IGA or Model 2 jurisdiction to obtain a GIIN and to agree to comply with the terms of the FFI agreement, as applicable.
In general, the FFI agreement does not apply to a reporting Model 1 FFI, or any branch of such an FFI, unless the reporting Model 1 FFI has registered a branch located outside of a Model 1 IGA jurisdiction seeking to be treated as a PFFI or reporting Model 2 FFI.
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Q5. What action should a FATCA registrant take if it improperly completes multiple FATCA registrations?
In general, an entity (or branch) with a FATCA registration obligation should not be registered more than once. There are certain exceptions to this rule. For example, an FFI that will also act as a Sponsoring Entity for one or more Sponsored Entities for chapter 4 purposes is required to submit one FATCA registration to obtain status as a PFFI and a second FATCA registration to act as a Sponsoring Entity. If an entity has improperly registered itself more than once, then the entity should either delete or cancel its duplicate FATCA registration(s), as appropriate. The proper course of action will depend on whether the duplicate FATCA registration(s) have been processed. If the status of a duplicate FATCA registration is “Approved” or “Limited Conditional,” then the duplicate registration should be cancelled. See Section 5.3.6 of the FATCA Registration Online User Guide for instructions for cancelling a registration. If the status of a duplicate FATCA registration is neither “Approved” nor “Limited Conditional,” then the duplicate FATCA registration should be deleted. See Section 5.3.5 of the FATCA Registration Online User Guide for instructions for deleting a FATCA registration.
The regulations treat all units, businesses, offices and disregarded entities of a PFFI located in a single country as a single branch of the FFI. Therefore, an FI generally should not register more than one branch in the same jurisdiction. (However, see the Branch/Disregarded Entity FAQs for a special rule for registering disregarded entities in Model 1 IGA jurisdictions.) Thus, duplicate branch registrations in a single jurisdiction with respect to an FFI must be deleted. See Section 5.7 of the FATCA Registration Online User Guide for instructions for deleting a branch registration.
If a registrant has been issued multiple GIINs because it has improperly completed multiple FATCA registrations, then the registrant must choose one GIIN and use it consistently for all chapter 4 purposes. The registrations or FFI Agreements connected with the improper multiple GIINs should be deleted or cancelled as provided above.
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Q6. The entity I represent is on the Office of Foreign Asset Control’s Specially Designated Nationals list. Is the entity eligible to register and receive a GIIN?
No. For more information, please contact the Office of Foreign Asset Control at 1-800-540-6322, or refer to the OFAC website.
Added: 07-31-2015
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Q7. What is the Office of Foreign Asset Control’s Specially Designated Nationals (SDN) list?
As part of its enforcement efforts, OFAC publishes a list of individuals and companies owned or controlled by, or acting for or on behalf of, targeted countries. It also lists individuals, groups, and entities, such as terrorists and narcotics traffickers designated under programs that are not country-specific. Collectively, such individuals and companies are called “Specially Designated Nationals” or “SDNs.” Their assets are blocked and U.S. persons are prohibited from dealing with them.
Added: 07-31-2015
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FFI/EAG Changes
Q1. We are the common parent of an EAG. If we sell our interest in a wholly-owned FFI that is registered as a Member FI, what impact will the sale have on the Member FI’s FATCA registration?
If the Member FI is no longer part of the EAG, it may change its type from Member to Single or Transfer to a new EAG if it is becoming a Member of a new EAG. See the FATCA Online Registration User Guide to change FI Type. If the member is Transferring to a new EAG see the FATCA Online Registration User Guide for instructions on how to complete a Transfer.
Please note that the cancellation or deletion of the former Member FI’s registration will cancel its original GIIN. That GIIN will no longer appear on the FFI list.
Updated: 02-02-2016
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Q2. Can a FATCA registrant change its FI Type—which is selected at the beginning of the FATCA registration process—without re-registering?
Yes, an FI can edit their type without cancelling their current registration agreement by selecting the “Change FI Type” link on the home page and updating the registration form.

The following FI Type changes are allowed within the FATCA Registration system:
Member to single
Single to lead
Single to member (transfer to an expanded affiliated group)
Lead to member (transfer to an expanded affiliated group).
See the FATCA Online Registration User Guide for additional information.
Updated: 02-02-2016
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Q3. If a registrant has changed its name but not its FI Type, does it need to re-register?
No. See the FATCA Online Registration User Guide for general instructions for editing registration information.
Please note that you may need to provide updated information to your withholding agents.
Updated: 02-02-2016
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Q4. How can an FFI that is registered as a Single FI change its FATCA registration to become a Lead FI?
An FI can edit their type without cancelling their current registration agreement by selecting the “Change FI Type” link on the home page and updating the registration from Single to Lead. See the FATCA Online Registration User Guide for additional information.
Once the FI has completed its update to “Lead” it may then begin to add Member FI’s. See FATCA Online Registration User Guide for additional information on how to add members.
Updated: 02-02-2016
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Q5. How can an FFI that is registered as a Lead FI of an EAG change its FATCA registration to become a Single FI?
The FI must register again—this time as a Single FI—to obtain a new FATCA ID and a new GIIN.
In addition to re-registering, the FFI must cancel or delete its original registration. See the FATCA Online Registration User Guide for instructions for deleting or cancelling a FATCA registration. Before a Lead FI can cancel its registration, it must first ensure that all of its Member FIs have cancelled their FATCA registrations, and those Member FIs register to continue their applicable FATCA statuses.
Please note that cancelling or deleting the FFI’s original registration will cancel its original GIIN. That GIIN will no longer appear on the FFI list.
Updated: 02-02-2016
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Q6. What steps does a registrant need to complete if it has dissolved?
If a registrant dissolves before its FATCA registration is approved, then it should delete its registration. See the FATCA Online Registration User Guide for instructions for deleting a FATCA registration.
If a registrant dissolves after its FATCA registration is approved, then it should cancel its registration. See the FATCA Online Registration User Guide for instructions for cancelling a registration.
Updated: 02-02-2016
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Branch/Disregarded Entity
Q1. How does a disregarded entity (DE) in a Model 1 IGA jurisdiction satisfy its FATCA registration requirements?
A DE in a Model 1 IGA jurisdiction must register as an entity separate from its owner in order to be treated as a reporting Model 1 FFI, provided that the DE is treated as a separate entity for purposes of its reporting to the applicable Model 1 jurisdiction. Select either a “Single” FFI or “Member” FFI in Part 1, Question 1 of the FATCA Registration (as appropriate). Select “Registered Deemed-Compliant Financial Institution (including a Reporting Financial Institution under a Model 1 IGA)” in Part 1, Question 4. When the owner of the DE registers on its own behalf, it should not report the DE as a branch.
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Q2. How does a branch in a Model 1 IGA jurisdiction satisfy its FATCA registration requirements?
In general, a branch (as defined in Treas. Reg. § 1.1471-4(e)(2)(ii)) must be registered as a branch of its owner and not as a separate entity. Thus, the branch will be registered by the FI of which the branch is a part (including an appropriate lead FI or Sponsoring Entity) when the FI completes Part 1 of its own FATCA registration. The online registration user guide provides further instructions on how to register branches. In general, a branch is a unit, business, or office of an FFI that is treated as a branch under the regulatory regime of a country or is otherwise regulated under the laws of such country as separate from other offices, units, or branches of the FI.
Updated 8-25-15: Q2 has been updated to clarify that, unless a specified exception applies, a branch must register as a branch of its owner and not as a separate entity.
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Q3. How does a branch or a disregarded entity (DE) in a jurisdiction that does not have an IGA, or that is in a Model 2 IGA jurisdiction, satisfy its FATCA registration requirements?
A branch (including a DE) that is in a Model 2 IGA jurisdiction, or a jurisdiction without an IGA, must be registered as a branch of its owner (rather than as a separate entity). As such, the branch will be registered by the FI of which the branch is a part (including an appropriate Lead FI or Sponsoring Entity) when that FI completes Part 1 of its own FATCA registration. The branch will not have a separate registration account, but will be assigned a separate GIIN, if eligible. When the FI completes its FATCA registration and registers its branches by answering Questions 7, 8, and 9, GIINs will be assigned with respect to the registered branches, where appropriate. The online registration user guide provides further instructions on how to register branches. A separate GIIN will be issued to the FI to identify each jurisdiction where it maintains a branch that is participating or registered deemed-compliant.
All branches (and, except in Model 1 IGA jurisdictions, disregarded entities) of an FI located in a single jurisdiction are treated as one branch and, as a result, will share a single GIIN. U.S. branches and limited branches are not eligible to receive their own GIINs. A branch of an FFI located in the FFI’s home country will use the GIIN of the FFI. For example, suppose FI W (located in Country X) has one branch in Country X, two branches in Country Y and owns a DE in Country Z. Country Z is a Model 1 IGA jurisdiction. FI W will receive a Country X GIIN. FI W’s Country X branch will use W’s GIIN. The two branches in Country Y will be treated as a single branch, and so FI W will be issued a single Country Y GIIN for these two branches to share. The Country Z DE will register as an entity separate from its owner, in order to be treated as a reporting Model 1 FFI, and will receive its own GIIN.
Updated 8-25-15: Q3 has been updated to clarify that, unless a specified exception applies, a branch must register as a branch of its owner and not as a separate entity.
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Q4. How can a withholding agent find the name and GIIN of a branch on the FFI list?
To locate a branch on the FFI list, you search using the financial institution name followed by the phrase “ – branch”. There must be a space between the financial institution name and the dash and a space between the dash and the word branch.
Updated: 02-02-2016
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Q5. How does a branch described in Q-2 or Q-3 of this heading that has registered as a separate entity rather than as a branch of its owner correct its registration?
A branch that has incorrectly registered separately from the FI that maintains such branch rather than as part of the FI’s registration is required to cancel its separate registration and the FI must revise its own registration to include such branch by the end of the 2015 calendar year. See the FACTA Online Registration User Guide for instructions on deleting a FATCA registration. For example, a branch that is in a Model 2 IGA jurisdiction, or a jurisdiction without an IGA, must be registered as a branch of its owner and therefore must correct its registration if it has registered as a separate entity. An FI revising its registration to include its branch should provide updated documentation to withholding agents and to foreign financial institutions required to document the status of an account held by the branch of the FI under chapter 4 or an applicable Model 1 or Model 2 IGA (including, as applicable, the GIIN of the FI applicable to its country of residency and the new GIIN of the branch). See the Instructions for Form W-8BEN-E, Part II.
A withholding agent that knows or has reason to know that a Form W-8BEN-E has been provided by a branch of an FI that has incorrectly registered as a separate entity may rely on such form (if otherwise valid) for payments made by the end of the 2015 calendar year. Thus, the withholding agent should not withhold on payments to the branch made before such date solely because the branch has incorrectly registered on the IRS Portal.
Updated: 02-02-2016: Q5 has been added to instruct branches registered as separate entities on how to correct their registration.
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General Compliance
Q1. How will Certified-Deemed Compliant FFIs, Owner-documented FFIs, or Excepted FFIs certify to U.S. withholding agents that they are not subject to Chapter 4 withholding given that they are not required to register with the IRS?
Certified-Deemed Compliant FFIs, Owner-documented FFIs, and Excepted FFIs will demonstrate their Chapter 4 withholding status to U.S. withholding agents by providing a withholding certificate and documentary evidence that complies with the requirements of Treas. Reg. 1.1471-3(d).
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Q2. We are an FFI in a non-IGA country. Will we be subject to Chapter 4 withholding if we do not register with the IRS?
Yes, to the extent that you receive withholdable payments and are not subject to an exemption from the registration requirement. Under FATCA, to avoid being withheld upon, FFIs that are not subject to an exemption from the registration requirement must register with the IRS and agree to report to the IRS certain information about their U.S. accounts, including accounts of certain foreign entities with substantial U.S. owners. An FFI that fails to satisfy its applicable registration requirements will generally be subject to 30% withholding on withholdable payments that it receives.
Categories of FFIs that are exempt from registration include:
Certified deemed-compliant FFIs (including any entities treated as certified deemed-compliant);
Exempt beneficial owners;
Owner Documented FFIs; and
Excepted FFIs.
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Q3. What are the consequences of terminating the FFI agreement for a Participating Foreign Financial Institution?
If the FFI agreement is terminated by either the IRS or the FFI pursuant to the termination procedures set forth in Section 12 of the FFI agreement, the FFI will be treated as a nonparticipating FFI and subject to 30% withholding on withholdable payments made after the later of (i) the date of termination of the FFI agreement, or (ii) June 30, 2014, except to the extent that the withholdable payments are exempt from withholding (e.g. under the rules related to grandfathered obligations) or the FFI qualifies for a chapter 4 status other than a nonparticipating FFI (such as a certified deemed-compliant FFI). See Revenue Procedure 2014-38, for the terms of the revised FFI agreement.
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Q4. What happens if an FFI is not registered by May 5th, 2014?
As set forth in Announcement 2014-17, released April 2, 2014, to ensure inclusion on the first IRS FFI List (which is expected to first be electronically available on June 2, 2014) prior to the date FATCA withholding goes into effect, an FFI must finalize its registration by May 5, 2014. The regulations generally provide that, in order for withholding not to apply, a withholding agent must obtain an FFI’s GIIN for payments made after June 30, 2014, though it need not confirm that the GIIN appears on the IRS FFI List until 90 days after the FFI provides a withholding certificate or written statement claiming status as a participating FFI or registered deemed-compliant FFI. A special rule, however, provides that a withholding agent does not need to obtain a reporting Model 1 FFI’s GIIN for payments made before January 1, 2015. See Treas. Reg. § 1.1471-3(d)(4)(iv)(A). As a result, while a reporting Model 1 FFI is currently able to register and obtain a GIIN, it will have additional time beyond July 1, 2014, to register and obtain a GIIN in order to ensure that it is included on the IRS FFI list before January 1, 2015. See Announcement 2014-17 for revised FATCA registration deadlines to ensure inclusion on the first FFI List (which is expected to be electronically available on June 2, 2014).
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Q5. Are Forms W-8 still required to be renewed by the appropriate beneficial owners?
Generally, a Form W-8BEN will remain in effect for purposes of establishing foreign status for a period starting on the date the form is signed and ending on the last day of the third succeeding calendar year, unless a change in circumstances makes any information on the form incorrect. For example, a Form W-8BEN signed on September 30, 2015, remains valid through December 31, 2018.
However, under certain conditions a Form W-8BEN will remain in effect indefinitely until a change of circumstances occurs. To determine the period of validity for Form W-8BEN for purposes of chapter 4, see Treas. Reg. § 1.1471-3(c)(6)(ii). To determine the period of validity for Form W-8BEN for purposes of chapter 3, see Teas. Reg. § 1.1441-1(e)(4)(ii).
Withholding certificates and documentary evidence obtained for chapter 3 or chapter 61 purposes that would otherwise expire on December 31, 2013, will not expire before January 1, 2015, unless a change in circumstances occurs that would otherwise render the withholding certificate or documentary evidence incorrect or unreliable.
Please note that various Forms in the W-8 series were revised in 2014 to incorporate the certifications required for FATCA purposes and can now be found at the following link: Form & Pubs. See Treas. Reg. § 1.1471-3(c) for rules regarding reliance on a pre-FATCA Form W-8.
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Q6. What should a withholding agent do if an entity account holder indicates that box 9a of Form W–8BEN–E is too small to accommodate the entity’s GIIN?
Box 9a generally accommodates 19 characters, and instructing the entity to use of a smaller font should solve any potential difficulty entering 19 characters. In addition, please note that a substitute form may be used in place of Form W–8BEN–E if the substitute form is substantially similar to Form W–8BEN–E. See Treas. Reg. § 1.1441-1(e)(4)(vi). Additionally, as provided in the Instructions for the Requester of Forms W–8BEN, W–8BEN–E, W–8ECI, W–8EXP, and W–8IMY, a withholding agent “may accept a GIIN that is indicated and clearly identified on the form rather than provided as required in box 9a or another box permitted in the Instructions for Form W–8BEN–E if the GIIN is clearly identified as being furnished with respect to the box.” A hand-written GIIN located just outside of box 9a with a corresponding arrow pointing to box 9a is one example of a properly-provided GIIN for purposes of box 9a.
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Q7. Notice 2014-33, 2014-21 I.R.B. 1033, provides that a withholding agent or FFI may treat an obligation as a preexisting obligation if the obligation (i) is issued, opened, or executed on or after July 1, 2014, and before January 1, 2015, and (ii) is held by an entity. How does this provision of Notice 2014-33 apply when the recipient of a payment made under the obligation is a flow-through entity or intermediary?
A withholding agent may treat an obligation held by an entity (including an entity acting as an intermediary with respect to the obligation or a flow-through entity) as a preexisting obligation to the extent permitted in Notice 2014-33. Therefore, an obligation held by an intermediary or flow-through entity is treated as a preexisting obligation if it is issued, opened, or executed before January 1, 2015. In such a case, the withholding agent may rely on a pre-FATCA Form W-8 to document the holder of the obligation throughout 2014. If the flow-through entity or intermediary provides the withholding agent with a withholding statement allocating a portion of a payment to a chapter 4 withholding pool of recalcitrant account holders or NPFFIs (or payee-specific information for such persons), then the withholding agent is required to apply chapter 4 withholding to the portion of the payment allocated to each such pool of payees (or each such payee), even though it is not yet required to document the chapter 4 status of the flow-through entity or intermediary. However, a withholding agent must determine the chapter 4 status of a flow-through entity or intermediary as a PFFI or RDCFFI when provided with a withholding statement allocating a portion of a payment to a chapter 4 withholding rate pool of U.S. payees that the withholding agent reports on Form 1042-S as made to the pool rather than requiring payee-specific documentation for each payee in the pool or withholding and reporting in accordance with the applicable presumption rules.
If the withholding agent receives documentation from a flow-through entity with respect to an interest holder in the entity or from an intermediary with respect to its account holder and confirms (in writing) that the intermediary or flow-through entity treats the obligation as a preexisting obligation (including under Notice 2014-33, if applicable), the withholding agent may treat the obligation as a preexisting obligation provided that the withholding agent does not have documentation showing the interest holder or account holder to be an NPFFI. The preceding sentence would apply, for example, to documentation provided with respect to a passive NFFE that is an account holder in an intermediary and that does not provide the information or certification described in Treas. Reg. § 1.1471-3(d)(12)(iii) with respect to its owners.
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Q8. Annex I of the IGA provides that, for certain purposes, a self-certification may be made on an IRS Form W-8 or other “similar agreed form.” What would be considered a similar agreed form?
Substitute Withholding Certificate: In General
A similar agreed form may include, for example, a substitute Form W-8BEN, W-8BEN-E, W-8ECI, W-8EXP, or W-8IMY if its content is substantially similar to the IRS’s official Form W-8BEN, W-8BEN-E, W-8ECI, W-8EXP, or W-8IMY (see the instructions to the requestor of Forms W-8BEN, W-8BEN-E, W-8ECI, W-8EXP, and W-8IMY), and the partner jurisdiction does not decline such treatment. You may develop and use a substitute form that is in a foreign language, provided that you make an English translation of the form and its contents available to the IRS upon request. You may combine Forms W-8BEN, W-8BEN-E, W-8ECI, W-8EXP, and W-8IMY into a single substitute form.
You may choose to provide a substitute form that does not include all of the chapter 4 statuses provided on the Form W-8, but the substitute form must include any chapter 4 status for which withholding may apply, such as the categories for a nonparticipating FFI or passive NFFE. See Treas. Reg. § 1.1471-3(c)(6)(v)(A). You may also provide with the form an alternative certification that reflects the requirements under an applicable IGA instead of the certification of chapter 4 status otherwise required by the form. See the Instructions for the Requester of Forms W–8BEN, W–8BEN–E, W–8ECI, W–8EXP, and W–8IMY and the Instructions for Form W-8BEN-E for the requirements to use alternative certifications with respect to Form W-8BEN-E, which also apply to a substitute version of the form.
You are also required to furnish instructions for the substitute form to the extent and manner provided in the official instructions for the official form.
You may incorporate a substitute Form W-8 into other business forms you customarily use, such as account signature cards, provided the required certifications are clearly set forth. However, you may not:
Use a substitute form that requires the payee, by signing, to agree to provisions unrelated to the required certifications, or
Imply that a person may be subject to 30% withholding or backup withholding unless that person agrees to provisions on the substitute form that are unrelated to the required certifications.
A substitute Form W-8 is generally valid only if it contains the same penalties of perjury statement and certifications as the official forms and the required signature. However, if the substitute form is contained in some other business form, the words “information on this form” may be modified to refer to that portion of the business form containing the substitute form information, including any alternative certification under an applicable IGA provided with the substitute form. The design of the substitute form must be such that the information and certifications that are being attested to by the penalties of perjury statement clearly stand out from any other information contained on the business form.
Substitute Withholding Certificate: Non-IRS Form for Individuals
A similar agreed form may also include a non-IRS form used in place of a Form W-8BEN (for individuals). The substitute form must include the information required in Treas. Reg. § 1471-3(c)(6)(v), and the form must be signed, dated, and also certified under penalties of perjury unless the form is accompanied by documentary evidence that supports the individual’s claim of foreign status. For a case in which a withholding certificate is required to be associated with a payment subject to chapter 3 withholding or reportable amount under Treas. Reg. § 1.1441-1(e)(3)(vi), however, see the requirements for a beneficial owner withholding certificate under Treas. Reg. § 1.1441-1(e)(2).
Documenting an Entity’s Chapter 4 Status with a Written Statement
You may use a written statement described in Treas. Reg. § 1.1471-3(c)(4) to document an entity account holder or payee. Such a written statement is valid only to the extent that it is permitted to be used based on the requirements of Treas. Reg. § 1.1471-3(d). Also see Treas. Reg. § 1.1471-3(d) for when a written statement must be supported by documentary evidence of the payee’s foreign status. The written statement may incorporate, rather than a chapter 4 status described in Treas. Reg. § 1.1471-3(d), a certification of status as determined under the requirements of an applicable IGA.
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Q9. What is an acceptable self-certification for purposes of the Annex I due diligence procedures for preexisting and new accounts? Does the self-certification form have to be agreed with the United States?
In addition to a self-certification described in General Compliance Q8, a self-certification would be an acceptable self-certification for purposes of the Annex I due diligence procedures for preexisting and new accounts and would not need to be agreed between an IGA jurisdiction and the United States if it (i) is signed (or otherwise positively affirmed), (ii) is dated (at the latest at the date of receipt), and (iii) solicits, at a minimum, the following information:
(i) name;
(ii) residence address for tax purposes;
(iii) jurisdiction(s) of residence for tax purposes (note that a U.S. citizen is considered a U.S. tax resident even if the person is also a tax resident of another jurisdiction);
(iv) taxpayer identification number (If taxpayer has both a U.S. TIN and a foreign TIN, the U.S. TIN must be provided, and the foreign TIN may be provided);
(v) in the case of an entity, the entity’s status (an entity’s FATCA status would include its status as a Nonparticipating FFI, Participating FFI, Reporting Model 1 FFI, Reporting Model 2 FFI, Nonreporting IGA FFI, Active NFFE, Passive NFFE, etc.); and
(vi) in the case of a Passive NFFE, the name, residence address for tax purposes, and taxpayer identification number with respect to any Controlling Person that is a Specified U.S. Person.
For purposes of enforcement and administration with respect to the implementation of FATCA by withholding agents, FFIs, and other entities with chapter 4 responsibilities, the IRS will take into account the transition period for calendar years 2014 and 2015. See Notice 2014-33 for additional information.
An IGA jurisdiction planning to implement the OECD Standard for Automatic Exchange of Financial Account Information in Tax Matters (the Common Reporting Standard) may want the self-certification form to also require date of birth. With this additional information, the self-certification form would be consistent with the Common Reporting Standard and the multilateral understanding of a valid self-certification.
This FAQ does not address what would be an acceptable beneficial owner withholding certificate for purposes of chapter 3. For an acceptable beneficial owner withholding certificate for purposes of chapter 3 reporting and withholding responsibilities, see §1.1441-1(e)(2)(ii).
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Q10. If a Reporting Model 1 FFI or a Reporting Model 2 FFI that is applying the due diligence procedures in section III, paragraph B, of Annex I of the IGA cannot obtain a self-certification upon the opening of a New Individual Account, can the FFI open the account and treat it as a U.S. Reportable Account?
No. Pursuant to section III, paragraph B, of Annex I of the IGA, the FFI must obtain a self-certification at account opening. If the FFI cannot obtain a self-certification at account opening, it cannot open the account.
Added: 02-02-2015
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Q11. Has a Form W-8 that has been completed and signed by a payee, scanned into an image or portable document format (PDF), and uploaded to a third-party repository been scanned and received electronically by a withholding agent for purposes of sections 1.1441-1(e)(4)(iv)(C) and 1.1471-3(c)(6)(iv) if the payee, upon request from the withholding agent for a Form W-8 to document its status for purposes of chapters 3 and 4, sends the withholding agent an email with a link to the third-party repository site that allows the withholding agent to download the image or PDF of the form that is stored on the repository for such purpose (or the payee otherwise authorizes the withholding agent to access the specific form from the third-party repository in a similar manner).
Yes. The Form W-8 will be considered to have been scanned and received electronically by the withholding agent, provided that the withholding agent does not know that the email containing the link to the third-party repository has been transmitted by someone other than the payee or an agent of the payee. Also, because the withholding agent has obtained the form at the payee’s direction, the form will be treated as having been furnished by/provided by the payee (see sections 1.1441-1(e)(1)(ii)(A)(1) and 1.1471-3(c)(1)). A withholding agent is still required to determine whether the form is valid and may be relied upon for purposes of chapter 3 or 4 and whether a change in circumstances affects its continuing reliance on the form.
Added: 08-14-2015
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Q12. My courier requires a physical mailing address for delivery service. What is the physical mailing address for Forms 8966 and Form 1042?
Form Submission Processing Center Address
Form 8966 Austin – Internal Revenue Submission Processing Center 3651 S IH35, Austin, TX 78741
Form 1042 Ogden – Internal Revenue Submission Processing Center 1973 Rulon White Blvd., Ogden, UT 84201
Added: 12-07-2015
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Q13. I am an American citizen living abroad and my foreign bank is requesting my social security number, do I have to comply and if so, why?
Due to the implementation of FATCA, foreign banks are required to document all U.S. persons and report certain financial information to the Internal Revenue Service. A U.S citizen choosing not to provide their Tax Identification Number (“TIN”) (often a Social Security number) may result in the foreign bank closing their accounts or applying withholding on any payments made to the U.S. Person.
Added: 12-07-2015
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Q14. How do I submit a request for an initial or additional extension of time to file Forms 8966 for tax year 2015?
Use Form 8809-I to request an initial or additional extension of time to file Form 8966 for the current tax year. File Form 8809-I as soon as you know an extension of time to file is necessary, but not before January 1 of the filing year. Form 8809-I must be filed by the Form 8966 due date (generally, March 31 of the year following the reporting year of the return). If you are requesting an additional hardship extension, Form 8809-I must be filed by the first extended due date of Form 8966.
Note: Under the terms of their applicable IGAs, reporting Model 2 Foreign Financial Institutions (FFI) aren’t entitled to an extension of time for aggregate reporting on non-consenting U.S. accounts or non-consenting non-participating FFIs. Entities that are located in a Model 1 jurisdiction and reporting on behalf of themselves (or any entities that are reporting on behalf of another entity that is located in a Model 1 Jurisdiction) may not request an additional extension of time to file Form 8966 from the IRS because they must report directly to the Model 1 jurisdiction’s tax authority.
The automatic extension of time to file Form 8966 is 90 days from the original due date. The IRS may grant an additional 90-day extension of time to file Form 8966 under the hardship exception. Requests for an additional extension of time to file Form 8966 aren’t automatically granted. Generally, requests for additional time are granted only where it is shown that extenuating circumstances will prevent filing by the date granted by the first request.
Filers may be subject to a late filing penalty if Form 8966 is filed late and you haven’t applied for and received an approved extension of time to file.
Where To File
Mail a paper Form 8809-I to:
Internal Revenue Service
FATCA, Stop 6052 AUSC
3651 South IH 35
Austin, Texas 78741
Added: 12-07-2015
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Q15. How do I submit a request to waive the requirement to file Forms 8966 electronically for tax year 2015?
Filers who are requesting a waiver from filing Form 8966 electronically should file Form 8508-I. You should file Form 8508-I at least 45 days before the due date of the Form 8966. Form 8966 is due March 31 of the year following the reporting year, unless you are an FFI reporting under a Model 2 IGA with a different reporting date specified in the applicable Model 2 IGA. Waiver requests will be processed beginning January 1st of the calendar year the return is due.
Note: See Treasury regulations section 301.1474-1(a) for additional information.
If you are required to file electronically but fail to do so and you do not have an approved waiver on record, penalties under Code sections 6721 through 6724 may apply.
Where To File
Mail a paper Form 8508-I to:
Internal Revenue Service
FATCA, Stop 6052 AUSC
3651 South IH 35
Austin, Texas 78741
Added: 12-07-2015
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Q16. What title should the RO include when indicating their business title in the RO information section of the registration?
The RO should indicate their corporate business title such as President, Vice-President, Treasurer etc., and not the name of the business.
Added: 12-07-2015
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Q17. How many Global Intermediary Identification Numbers (GIINs) should a single FI have?
A Single FI that is not a sponsoring entity should only have one GIIN. Duplicate or Multiple Registrations attempting to correct errors should be cancelled by the appropriate RO.
Added: 12-07-2015
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Q18. What are the registration and GIIN requirements for bulk acquisition and merger events?
In general, the Registration User Guide contains guidance on registration. Specific guidance on some common bulk acquisition and merger scenarios are provided below:
B acquires A, A’s operations are subsumed into B, and B retains name.
Under this fact pattern, Entity B would not need to change its existing registration or acquire a new GIIN. If Entity A had previously registered for FATCA, it would need to terminate its registration.
B acquires A, A’s operations are subsumed into B, and B alters/changes its name

Under this fact pattern, Entity B would need to update its registration for the name change, but would not need a new GIIN. If Entity A had previously registered for FATCA, it would need to terminate its registration.
B acquires A, and A wishes to become a member entity
There are different ways for Entity A to become a member of Entity B. For example, Entity A can terminate its existing registration, and Entity B can update its registration to include Entity A as its member. Upon this registration, Entity A would be issued a new GIIN. Alternatively, if Entity B is a Lead FI, Entity A may initiate a transfer and become a member of Entity B. Upon the transfer, Entity A would be issued a new GIIN. Under this scenario, Entity A would not need to terminate its registration. For more information on the transfer function please see the user guide.
Added: 05-03-2016
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Q19. What do I need to do if I haven’t received a response to my submission of Form 8809-I when I requested an additional 90 Day Extension to file Form 8966?
You should wait 45 days from the date you mailed your Form 8809-I to contact the IRS about your additional extension to file Form 8966. If it has been over 45 days please call the IRS at 1-267-941-1000 (not a toll-free number) for information about your request.
Added: 07-01-2016
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Reporting
Q1. Are filers of Form 8966 required to file a nil report?
A direct reporting NFFE (and a sponsoring entity of a direct reporting NFFE) is required to file a Form 8966 to declare that it has no substantial U.S. owners for the calendar year.
For additional information, please read FAQ C20 on the IDES FAQ page.
Updated: 02-02-2016
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Q2. When is Form 8966 due for reporting with respect to calendar year 2014 for participating FFIs and Reporting Model 2 FFIs?
Under an FFI Agreement, the Form 8966 is due on or before March 31 of the year following the end of the calendar year to which the form relates. Under the Instructions for Form 8966, for reporting with respect to calendar year 2014 only, an automatic 90-day extension of time to file Form 8966 is provided to filers of Form 8966 (paper and electronic). This automatic extension of time is provided without the need to file any form or take any action. The Instructions for Form 8966 state that the automatic 90-day extension of time is not available for Reporting Model 2 FFIs reporting on a Non-Consenting U.S. Account. Accordingly, a filer (other than Reporting Model 2 FFIs reporting on a Non-Consenting U.S. Account) with a filing deadline of March 31, 2015, has until June 29, 2015, to submit Forms 8966.
Reporting Model 2 FFIs reporting on a Non-Consenting U.S. Account should refer to the applicable Model 2 IGA for the due dates for those filings. The IRS recognizes that FFIs will be using the IDES system for the first time and FFIs are currently testing and adapting to the new system. Therefore, with respect to calendar year 2014, Reporting Model 2 FFIs filing Form 8966 with respect to Non-Consenting U.S. Accounts will not be treated as being in significant non-compliance under their applicable Model 2 IGAs as long as such FFIs are making good faith efforts to comply with their reporting obligations and reporting is completed within 90 days after the applicable filing deadline (taking into account any other extensions already provided).
Up-to-date answers to frequently asked questions as well as links to useful information relating to using IDES is available on the IRS website at FATCA IDES Technical FAQs. Additional information can be found on the IDES support page, and sample data preparation files can be found on GitHub.
Added: 03-24-2015
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Request for Additional Extension of Time to File Form 8966 for Tax Year 2014
Q1. How do I submit a request for additional extension of time to file Forms 8966 for tax year 2014?
Follow the instructions to use the template entitled Request for Additional Extension of Time to File Form 8966 for Tax Year 2014. The deadline for submitting your request is June 29, 2015. Note: You must submit a separate request for each filer (for example, if you are requesting an additional extension of time to file Form 8966 both on behalf of yourself and with respect to reporting on behalf of a sponsored entity, you must submit two requests). Further, for tax year 2014 only, an additional 90-day extension of time will be automatically approved for eligible filers who submit a request. You will not receive a response from the IRS.
Added: 06-9-2015
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Request for Waiver from Filing Form 8966 Electronically for Tax Year 2014
Q1. How do I submit a request to waive the requirement to file Forms 8966 electronically for tax year 2014?
Follow the instructions to use the template entitled Request for Waiver From Filing Form 8966 Electronically for Tax Year 2014. The deadline for submitting your request is August 13, 2015. However, if you need an additional extension of time to file, you must submit a separate request for the extension by June 29, 2015. Note: You must submit a separate request for each filer (for example, if you are requesting a waiver from electronic filing of Form 8966 both on behalf of yourself and with respect to reporting on behalf of a sponsored entity, you submit two requests). Further, if you do not receive a response from the IRS within 45 days of the date you mail your request, you may treat the request as granted.
Added: 06-9-2015
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FATCA Registration Self-Help
The FATCA Registration System support team cannot respond to questions regarding FATCA regulations, your FATCA Registration account, or FATCA Related Forms.
For guidance on FATCA regulations and requirements, refer to FATCA Regulations.
For FATCA Registration account-related questions, please log into your FATCA Registration account and review your message board or refer to the FATCA Foreign Financial Institution Registration.
For guidance on FATCA Related Forms and instructions for completing them, refer to FATCA Related Forms.
Forgot your FATCA ID or Access Code? Refer to Forgotten FATCA ID and Access Code.
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FATCA Registration System Technical Support:
If you need system support for the online FATCA Registration, including help with login problems, error messages and other technical issues, please contact FATCA Registration System Technical Support.
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Comment on FATCA Compliance
If you have additional comments about FATCA compliance, please submit your comments.
NOTE: Do not provide any personal identification information such as your name, taxpayer identification number, social security number, address, or telephone number.
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Additional Support
If you need additional information please visit the FATCA Compliance and FATCA FAQs which are updated regularly.

New IRS QI Agreement

New IRS QI Agreement (Qualified Intermediary).

Notice 2016-42 sets out the proposed Qualified Intermediary (“QI”) agreement revising and updating the current agreement, Rev. Proc. 2014-39, published in July 2014. The revised QI agreement updates the current agreement primarily by providing detailed procedures regarding how qualified intermediaries satisfy their compliance review obligations and sets out terms and requirements for qualified intermediaries that want to act as qualified derivatives dealers with respect to transactions subject to section 871(m). The proposed QI agreement, when finalized, would be effective beginning January 1, 2017. Comments on the proposed QI agreement are requested by August 31, 2016.

A Copy of the Qualified Intermediary Agreement.

THIS AGREEMENT is made under and in pursuance of sections 1441, 1442, 1471, and 1472 and §§1.1441-1(e)(5) and 1.1441-1(e)(6):

WHEREAS, QI has submitted an application in accordance with this revenue procedure to be a qualified intermediary;

WHEREAS, QI and the IRS desire to enter into an agreement to establish QI’s rights and obligations regarding documentation, withholding, information reporting, tax return filing, deposit, and refund procedures under sections 1441, 1442, 1443, 1461, 1471, 1472, 1474, 3406, 6041, 6042, 6045, 6049, 6050N, 6302, 6402, and 6414, and tax liability under sections 871(a) and 881 for a QI that is acting as a qualified derivatives dealer (QDD), with respect to certain types of payments;

WHEREAS, QI represents that there are no legal restrictions that prohibit it from complying with the requirements of this Agreement;

WHEREAS, if QI is a foreign financial institution (FFI), QI represents that, as of the effective date of this Agreement, it has agreed to comply with the requirements of the FFI agreement, in the case of a participating FFI (including a reporting Model 2 FFI); §1.1471-5(f)(1) or the applicable Model 2 IGA, in the case of a registered deemed- compliant FFI (other than a reporting Model 1 FFI); or the applicable Model 1 IGA, in the case of a reporting Model 1 FFI or a registered deemed-compliant Model 1 IGA FFI; and

WHEREAS, if QI is an NFFE that desires to enter into this Agreement for purposes of presenting claims of benefits under an income tax treaty on behalf of its shareholders, QI represents that it will comply with the requirements of a direct reporting NFFE under §1.1472-1(c)(3);

NOW, THEREFORE, in consideration of the following terms, representations, and conditions, the parties agree as follows:

SECTION 1. PURPOSE AND SCOPE

Sec. 1.01. General Obligations. When the IRS enters into a QI Agreement with a foreign person or a U.S. person to cover a foreign branch, that foreign person (or foreign branch) becomes a QI. QI is a withholding agent under chapters 3 and 4, and a payor under chapter 61 and section 3406, for amounts that it pays to its account holders.

If QI is an FFI, the requirements QI has agreed to as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI continue to apply in addition to the requirements under this Agreement. If QI acts as a QI with respect to an account, this Agreement will reference QI’s chapter 4 obligations when necessary to facilitate coordination with a QI’s obligations under chapters 3, 4, and 61, and section 3406, with respect to such account holders. A participating FFI’s (including a reporting Model 2 FFI’s) obligations are provided in the FFI agreement, a registered deemed-compliant FFI’s (other than a reporting Model 1 FFI) obligations are provided in §1.1471-5(f)(1) or the applicable Model 2 IGA, and the obligations of a reporting Model 1 FFI or a registered deemed-compliant Model 1 IGA FFI are provided in the applicable Model 1 IGA. For purposes of chapter 4, QI must comply with its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed- compliant Model 1 IGA FFI (as applicable) with respect to all financial accounts that it maintains, irrespective of whether QI acts as a QI with respect to an account holder, as well as the requirements of a withholding agent for any payee that is a nonparticipating FFI or NFFE that is not an account holder. If QI is an FFI, QI must also, pursuant to this Agreement, assume primary reporting responsibility for purposes of section 1472, for certain indirect account holders for which it acts as a QI.

If QI is an NFFE acting as a QI on behalf of its shareholders, the requirements QI has agreed to as a direct reporting NFFE apply in addition to the requirements under this

Agreement, and, to the extent necessary to facilitate coordination of its direct reporting NFFE obligations with its obligations as a QI, the direct reporting NFFE obligations are incorporated into this Agreement. A direct reporting NFFE’s obligations are provided in §1.1472-1(c)(3). For purposes of chapter 4, if QI is an NFFE acting as a QI on behalf of its shareholders, QI must comply with the requirements of a direct reporting NFFE with respect to any shareholder that is a substantial U.S. owner as defined in §1.1473-1(b). If QI is an NFFE acting on behalf of persons other than its shareholders, QI must assume primary reporting responsibility for purposes of section 1472 for any person for which it acts as a QI.

For purposes of chapters 3 and 61 and section 3406, QI must act in its capacity as a QI pursuant to this Agreement for those accounts that QI holds with a withholding agent and that QI has designated as accounts for which it acts as a QI. QI is not required to act as a QI for all accounts that it holds with a withholding agent. However, QI must, as part of its QI Agreement, materially comply with the requirements of a withholding agent or payor, as applicable to a nonqualified intermediary (NQI) under chapters 3 and 61 and section 3406, for any account for which it does not (or cannot) act as a QI and for any payee that is not an account holder. If QI designates an account as one for which it will act as a QI, it must act as a QI for all payments made to that account and obtain the documentation required under section 5 of this Agreement for such account.

When QI acts as a QI for an account and assumes primary chapter 3 withholding responsibility for payments to the account, QI must also assume primary withholding responsibility for withholdable payments made to such account for chapter 4 purposes. If QI acts as a QI with respect to payments of substitute interest, as described in section 3.03(A) of this Agreement, it must act as a QI and assume primary withholding responsibility for all such payments of substitute interest.

If QI acts as a sponsoring entity on behalf of a sponsored FFI (as defined in §1.1471- 1(b)(121)) or sponsored direct reporting NFFE (as defined in §1.1471-1(b)(123)), it must comply with the due diligence, withholding, reporting, and compliance requirements of a sponsoring entity in addition to its requirements under this Agreement.

If QI acts as a QDD, it must act as a QDD for all payments made as a principal with respect to potential section 871(m) transactions and all payments received as a principal with respect to potential section 871(m) transactions and underlying securities, excluding any payments received by the QDD to the extent the payment is treated as income effectively connected with the conduct of a trade or business within the United States within the meaning of section 864. In addition, a QI must act as a QDD for any securities lending or sale-repurchase transactions (as defined in §1.871-15(a)(13)) QI enters into that are section 871(m) transactions. For purposes of this Agreement, a QDD is deemed to make and receive payments pursuant to those securities lending and sale-repurchase transactions as a principal. A QI may not act as a QDD when it receives or makes payments as an intermediary. A QI acting as a QDD must assume primary chapter 3 and chapter 4 withholding responsibility and primary Form 1099 reporting and backup withholding responsibility under section 3406 for payments made as a QDD with respect to any potential section 871(m) transaction provided the amount paid is an amount subject to chapter 3 or 4 withholding or a reportable payment under chapter 61. A QI acting as a QDD (other than a QDD that is a foreign branch of a U.S. financial institution) also must satisfy its QDD tax liability as determined under section 3.09 of this Agreement. The QDD (other than a QDD that is a foreign branch of a U.S. financial institution) must report both its withholding tax liability under chapters 3 and 4 and its QDD tax liability on Form 1042. A U.S. financial institution with a foreign branch that acts as a QDD must file the appropriate U.S. income tax return (e.g., Form 1120, U.S. Corporation Income Tax Return) for the tax year covered by the QI Agreement to report and pay its tax liability under chapter 1 and would not have a separate QDD tax liability.

Sec. 1.02. Parties to the Agreement. This Agreement applies to: (A) QI; and
(B) The Internal Revenue Service.

If QI is an FFI, QI can only designate an account that it holds as a QI designated account if the branch of QI that holds the account operates in a KYC jurisdiction identified under the QI Agreement. QI may add any jurisdiction in which it operates a branch that is not initially included in its QI application without prior IRS approval if the jurisdiction is one for which the IRS will enter into a qualified intermediary agreement (i.e., the jurisdiction is identified on the IRS’s Approved KYC List) and QI updates its information on the FATCA registration website with respect to such branch prior to treating such branch as a qualified intermediary. A branch of a QI that is not subject to the provisions of this Agreement remains subject to the rules of chapters 3, 4, and 61 and section 3406, as provided in section 1.01 of this Agreement.

SECTION 2. DEFINITIONS

For purposes of this Agreement, except as otherwise provided in this Agreement, the terms listed below are defined as follows:

Sec. 2.01. Account. “Account” or “Financial Account” has the meaning given to that term in §1.1471-1(b) with respect to QI’s obligations for chapter 4 purposes. For other purposes under this Agreement, “account” or “financial account” means any account for which QI acts as a qualified intermediary. With respect to a QI acting as a QDD, “account” means any potential section 871(m) transaction or underlying security where QDD receives payments as a principal and any potential section 871(m) transaction where QDD makes payments as a principal.

Sec. 2.02. Account Holder. If QI is an FFI, an “account holder” means any person that is a direct account holder or an indirect account holder of an account that QI has designated to its withholding agent as an account for which it is acting as a qualified intermediary. With respect to a QI that assumes primary withholding responsibility for a substitute interest payment as described in section 3.03(A) of this Agreement, an “account holder” includes any person that receives such a payment from the QI. “Account holder” also means any person that enters into or holds a potential section 871(m) transaction with a QI acting as a QDD. If QI is an NFFE acting on behalf of its shareholders, an “account holder” means each shareholder for whom QI is acting with respect to an amount subject to chapter 3 withholding or with respect to a withholdable payment. If QI is an NFFE acting as a qualified intermediary on behalf of persons other than its shareholders, an “account holder” means any person for whom QI is acting with respect to a reportable payment or withholdable payment.

(A) Direct Account Holder. A direct account holder is any person who holds an account directly with QI or holds an ownership interest (i.e., a shareholder) directly in QI if QI is an NFFE. In the case of an NFFE acting as a qualified intermediary on behalf of persons other than its shareholders, a direct account holder is any person for whom QI is acting with respect to a reportable payment regardless of whether such person is the beneficial owner.

(B) Indirect Account Holder. An indirect account holder is any person who receives amounts from QI but who does not have a direct relationship with QI. For example, a person that holds an account with a foreign intermediary or an interest in a foreign flow- through entity which, in turn, has a direct relationship with QI is an indirect account holder. A person is an indirect account holder even if there are multiple tiers of intermediaries or flow-through entities between the person and QI.

Sec. 2.03. Agreement. “Agreement” means this Agreement, and the two Appendices and any Attachments to this Agreement, and QI’s application to become a qualified intermediary. All such Appendices, Attachments, and QI’s application are incorporated into this Agreement by reference.

Sec. 2.04. Amount Subject to Chapter 3 Withholding. An “amount subject to chapter 3 withholding” is an amount described in §1.1441-2(a) regardless of whether such amount is withheld upon. An amount subject to chapter 3 withholding shall not include interest paid as part of the purchase price of an obligation sold between interest payment dates or original issue discount paid as part of the purchase price of an obligation sold in a transaction other than the redemption of such obligation, unless the sale is part of a plan the principal purpose of which is to avoid tax and QI has actual knowledge or reason to know of such plan.

Sec. 2.05. Amount Subject to Chapter 4 Withholding. An “amount subject to chapter 4 withholding” is a withhholdable payment (as defined in section 2.98 of this Agreement) for which withholding is required under chapter 4 or an amount for which withholding was otherwise applied under chapter 4.

Sec. 2.06. Assumption of Withholding Responsibility. An “assumption of withholding responsibility” refers to a QI that assumes primary chapters 3 and 4 withholding responsibility with respect to payments of U.S. source FDAP income, or assumes primary Form 1099 reporting and backup withholding responsibility. A QI that has an assumption of withholding responsibility assumes the primary responsibility for deducting, withholding, and depositing the appropriate amount from a payment. Generally, QI’s assumption of primary chapters 3 and 4 withholding responsibility or the assumption of primary backup withholding responsibility relieves the person who makes a payment to QI from the responsibility to withhold. Under section 3.05 of this Agreement, QI generally has primary Form 1099 reporting and backup withholding responsibility with respect to certain payments even though it does not assume such responsibility for payments not described in that section.

Sec. 2.07. Backup Withholding. “Backup withholding” means the withholding required under section 3406.

Sec. 2.08. Beneficial Owner. A “beneficial owner” has the meaning given to that term in §1.1441-1(c)(6).

Sec. 2.09. Broker Proceeds. “Broker proceeds” means gross proceeds (as defined in §1.6045-1(d)(5)) from a sale that is reportable under §1.6045-1(c).

Sec. 2.10. Chapter 3. Any reference to “chapter 3” means sections 1441, 1442, 1443, 1461, 1463, and 1464.

Sec. 2.11. Chapter 3 Reporting Pool. A “chapter 3 reporting pool” means a reporting pool described in section 8.03(B) of this Agreement.

Sec. 2.12. Chapter 4. Any reference to “chapter 4” means sections 1471, 1472, 1473, and 1474.

Sec. 2.13. Chapter 4 Reporting Pool. A “chapter 4 reporting pool” means a reporting pool described in section 8.03(A) of this Agreement.

Sec. 2.14. Chapter 4 Status. “Chapter 4 status” means the status of a person as a U.S. person, a specified U.S. person, an individual that is a foreign person, a participating FFI, a deemed-compliant FFI, a restricted distributor, an exempt beneficial owner, a nonparticipating FFI, a territory financial institution, an excepted NFFE, or a passive NFFE.

Sec. 2.15. Chapter 61. Any reference to “chapter 61” means sections 6041, 6042, 6045, 6049, and 6050N.

Sec. 2.16. Dealer. A “dealer” has the meaning given to the term dealer in §1.871- 15(a)(2) (i.e., a dealer in securities within the meaning of section 475(c)(1)).

Sec. 2.17. Deemed-Compliant FFI. “Deemed-compliant FFI” means an FFI that is treated, pursuant to section 1471(b)(2) and §1.1471-5(f), as meeting the requirements of section 1471(b).

(A) Certified Deemed-Compliant FFI. “Certified deemed-compliant FFI” means an FFI described in §1.1471-5(f)(2) and includes a nonreporting IGA FFI, but excludes a nonreporting Model 2 FFI that is treated as a registered deemed-compliant FFI.

(B) Registered Deemed-Compliant FFI. “Registered deemed-compliant FFI” means an FFI described in §1.1471-5(f)(1) and includes a reporting Model 1 FFI and a nonreporting Model 2 FFI that is treated as registered deemed-compliant FFI. For purposes of this Agreement, a reference to a registered deemed-compliant FFI that is providing a chapter 4 withholding rate pool of U.S. payees includes a registered deemed-compliant Model 1 IGA FFI.

(C) Registered Deemed-Compliant Model 1 IGA FFI. “Registered deemed-compliant Model 1 IGA FFI” means an FFI treated as a deemed-compliant FFI under an applicable Model 1 IGA that is subject to similar due diligence and reporting requirements with respect to U.S. accounts as those applicable to a registered deemed-compliant FFI under §1.1471-5(f)(1), including the requirement to register with the IRS.

Sec. 2.18. Deposit Interest. “Deposit interest” means interest described in section 871(i)(2)(A).

Sec. 2.19. Dividend Equivalent. A “dividend equivalent” has the meaning given to that term in §1.871-15(c).

Sec. 2.20. Documentary Evidence. “Documentary evidence” means any documentation obtained under the appropriate know-your-customer rules (as described in the Attachments to this Agreement), any documentary evidence described in §1.1441-6 sufficient to establish entitlement to a reduced rate of withholding under an income tax treaty, or any documentary evidence described in §1.6049-5(c) sufficient to establish an account holder’s status as a foreign person for purposes of chapter 61. Documentary evidence does not include a Form W-8 or Form W-9 (or an acceptable substitute Form W-8 or Form W-9).

Sec. 2.21. Documentation. “Documentation” means any valid Form W-8, Form W-9 (or an acceptable substitute Form W-8 or Form W-9), or documentary evidence as defined in section 2.20 of this Agreement, including all statements or other information required to be associated with the form or documentary evidence.

Sec. 2.22. Documented Account Holder. A “documented account holder” is an account holder for whom QI holds valid documentation.

Sec. 2.23. Effective Date of the QI Agreement. For a prospective QI that applies to 33

be a QI prior to March 31 of a given calendar year, the effective date of the QI Agreement will be January 1 of that year. For a prospective QI that applies after March 31 of a given calendar year and that has not received any reportable payments prior to the date the application is submitted, the effective date of the QI Agreement will be January 1 of that year. For a prospective QI that applies after March 31 of a given calendar year and that has received a reportable payment in the calendar year prior to the date the application is submitted, the effective date of the QI Agreement will be the first of the month in which the QI application is complete and the QI has received its QI- EIN. For a QI that is renewing its QI Agreement provided in Rev. Proc. 2014-39, 2014- 29 I.R.B. 150, the effective date of the QI Agreement when renewed by March 31, 2017, will be January 1, 2017.

Sec. 2.24. Eligible Entity. “Eligible entity” for QDD status means a qualified intermediary that is

(A) A dealer in securities subject to regulatory supervision as a dealer by a governmental authority in the jurisdiction in which it was organized or operates;

(B) A bank subject to regulatory supervision as a bank by a governmental authority in the jurisdiction in which it was organized or operates and that (1) issues potential section 871(m) transactions to customers, and (2) receives dividends with respect to stock or dividend equivalent payments pursuant to potential section 871(m) transactions that hedge potential section 871(m) transactions that it issued;

(C) An entity that is wholly-owned (directly or indirectly) by a bank subject to regulatory supervision as a bank by a governmental authority in the jurisdiction in which the bank was organized or operates and that (1) issues potential section 871(m) transactions to customers, and (2) receives dividends with respect to stock or dividend equivalent payments pursuant to potential section 871(m) transactions that hedge potential section 871(m) transactions that it issued; or

(D) A foreign branch of a U.S. financial institution, if the foreign branch would meet the requirements of paragraph (A), (B), or (C), if it were a separate entity.

Sec. 2.25. Excepted NFFE. “Excepted NFFE” means a person described in §1.1471- 1(b)(41).

Sec. 2.26. Exempt Beneficial Owner. “Exempt beneficial owner” means a person described in §1.1471-1(b)(42) and includes any person that is treated as an exempt beneficial owner under an applicable Model 1 or Model 2 IGA.

Sec. 2.27. Exempt Recipient. For purposes of Form 1099 reporting and backup withholding, an “exempt recipient” means a person described in §1.6049-4(c)(1)(ii) (for interest, dividends, and royalties), a person described in §1.6045-2(b)(2)(i) (for broker proceeds), and a person described in §1.6041-3(q) (for rents, amounts paid on notional

principal contracts, and other fixed or determinable income), for which no Form 1099 reporting is required. Exempt recipients are not exempt from reporting or withholding under chapter 3 or 4.

Sec. 2.28. FATCA Requirements as a Participating FFI, Registered Deemed- Compliant FFI, or Registered Deemed-Compliant Model 1 IGA FFI. “FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI” means—

(A) For a participating FFI or an FFI that agrees to be treated as a participating FFI, the requirements set forth in the FFI agreement;

(B) For a registered deemed-compliant FFI (other than a reporting Model 1 FFI) or an FFI that agrees to be treated as a registered deemed-compliant FFI, the requirements under §1.1471-5(f)(1) or an applicable Model 2 IGA; or

(C) For a registered deemed-compliant Model 1 IGA FFI, reporting Model 1 FFI, or an FFI that agrees to be treated as a registered deemed-compliant Model 1 IGA FFI or reporting Model 1 FFI, the requirements under an applicable Model 1 IGA.

Sec. 2.29. Financial Institution (FI). “Financial institution” or “FI” means an entity described in §1.1471-5(d) and includes a financial institution as defined under an applicable Model 1 or Model 2 IGA.

Sec. 2.30. Foreign Financial Institution (FFI). “Foreign Financial Institution” or “FFI” means a foreign entity (as defined in §1.1473-1(e)) that is a financial institution.

Sec. 2.31. FFI Agreement. “FFI Agreement” means an agreement described in §1.1471-4(a) and provided in Rev. Proc. 2014-3, 2014-3 I.R.B. 419, as revised by Rev. Proc. 2014-38, 2014-29 I.R.B. 131 (and any superseding revenue procedure).

Sec. 2.32. FFI Withholding Statement. An “FFI withholding statement” means a withholding statement provided by an FFI that meets the requirements of §1.1471- 3(c)(3)(iii)(B)(1) and (2).

Sec. 2.33. Flow-Through Entity. A flow-through entity is a foreign partnership described in §301.7701-2 or 3 (other than a withholding foreign partnership), a foreign trust (other than a withholding foreign trust) that is described in section 651(a), or a foreign trust if all or a portion of such trust is treated as owned by the grantor or other person under sections 671 through 679. For an item of income for which a treaty benefit is claimed, an entity is also a flow-through entity to the extent it is treated as fiscally transparent under section 894 and the regulations thereunder.

Sec. 2.34. Foreign Person. A “foreign person” is any person that is not a “United States person” and includes a “nonresident alien individual,” a “foreign corporation,” a

“foreign partnership,” a “foreign trust,” and a “foreign estate,” as those terms are defined in section 7701. For purposes of chapters 3 and 4, the term foreign person also means, with respect to a payment by a withholding agent (including a qualified intermediary), a foreign branch (including a foreign disregarded entity) of a U.S. person that provides a valid Form W-8IMY on which it represents that it is a qualified intermediary. A foreign branch of a U.S. person that is a qualified intermediary is, however, a U.S. payor for purposes of chapter 61 and section 3406.

Sec. 2.35. Foreign TIN. A “foreign TIN” is a taxpayer identification number issued by a foreign person’s country of residence.

Sec. 2.36. Form W-8. “Form W-8” means IRS Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding (Individuals); IRS Form W-8BEN-E, Certificate of Status of Beneficial Owner for United States Tax Withholding and Reporting (Entities); IRS Form W-8ECI, Certificate of Foreign Person’s Claim That Income is Effectively Connected With the Conduct of a Trade or Business in the United States; IRS Form W-8EXP, Certificate of Foreign Government or Other Foreign Organization for United States Tax Withholding and Reporting; and IRS Form W-8IMY, Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or Certain U.S. Branches for United States Tax Withholding and Reporting, as appropriate. It also includes any acceptable substitute Form W-8.

Sec. 2.37. Form W-9. “Form W-9” means IRS Form W-9, Request for Taxpayer Identification Number and Certification, or any acceptable substitute Form W-9.

Sec. 2.38. Form 945. “Form 945” means IRS Form 945, Annual Return of Withheld Federal Income Tax.

Sec. 2.39. Form 1042. “Form 1042” means IRS Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons.

Sec. 2.40. Form 1042-S. “Form 1042-S” means IRS Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding.

Sec. 2.41. Form 1096. “Form 1096” means IRS Form 1096, Annual Summary and Transmittal of U.S. Information Returns.

Sec. 2.42. Form 1099. “Form 1099” means IRS Form 1099-B, Proceeds From Broker and Barter Exchange Transactions; IRS Form 1099-DIV, Dividends and Distributions; IRS Form 1099-INT, Interest Income; IRS Form 1099-MISC, Miscellaneous Income; IRS Form 1099-OID, Original Issue Discount; and any other form in the IRS Form 1099 series appropriate to the type of payment required to be reported.

Sec. 2.43. Form 8966. “Form 8966” means IRS Form 8966, FATCA Report. 36

Sec. 2.44. Form 1099 Reporting. “Form 1099 reporting” means the reporting required on Form 1099.

Sec. 2.45. Global Intermediary Identification Number (GIIN). “Global intermediary identification number” or “GIIN” means the identification number that is as assigned to a participating FFI, registered deemed-compliant FFI, direct reporting NFFE, or sponsoring entity of a direct reporting NFFE. The term also includes the identification number assigned to a reporting Model 1 FFI or registered deemed-compliant Model 1 IGA FFI that is a QI for the purpose of identifying itself to withholding agents.

Sec. 2.46. Intermediary. An “intermediary” means any person that acts on behalf of another person such as a custodian, broker, nominee, or other agent.

Sec. 2.47. Know-Your-Customer Rules. “Know-your-customer rules” refers to the applicable laws, regulations, rules, and administrative practices and procedures, identified in the Attachments to this Agreement, governing the requirements of QI to obtain documentation confirming the identity of QI’s account holders.

Sec. 2.48. Marketable Securities. For purposes of this Agreement, the term “marketable securities” means those securities described in §1.1441-6 for which a U.S. TIN (or foreign TIN) is not required to obtain treaty benefits.

Sec. 2.49. Non-Consenting U.S. Account. For purposes of a reporting Model 2 FFI, “non-consenting U.S. account” has the meaning that such term has under an applicable Model 2 IGA.

Sec. 2.50. Non-Exempt Recipient. A “non-exempt recipient” means a person that is not an exempt recipient under the definition in section 2.27 of this Agreement.

Sec. 2.51. Non-Financial Foreign Entity (NFFE). A “non-financial foreign entity” or “NFFE” means a foreign entity that is not a financial institution (including an entity that is incorporated or organized under the laws of any U.S. territory and that is not a financial institution). The term also means a foreign entity treated as an NFFE pursuant to a Model 1 or Model 2 IGA.

Sec. 2.52. Nonparticipating FFI. A “nonparticipating FFI” means an FFI other than a participating FFI, a deemed-compliant FFI, or an exempt beneficial owner.

Sec. 2.53. Nonqualified Intermediary. A “nonqualified intermediary” is any intermediary that is not a qualified intermediary. A nonqualified intermediary includes any intermediary that is a foreign person unless such person enters an agreement to be a qualified intermediary and acts in such capacity. A nonqualified intermediary also includes an intermediary that is a territory FI (as defined section 2.83 of this Agreement) unless such institution agrees to be treated as a U.S. person.

Sec. 2.54. Non-U.S. Payor. A “non-U.S. payor” means a payor other than a U.S. payor as defined in this section 2.90 of this Agreement.

Sec. 2.55. Nonwithholding Foreign Partnership. A “nonwithholding foreign partnership” means a foreign partnership other than a withholding foreign partnership as defined in §1.1441–5(c)(2)(i).

Sec. 2.56. Nonwithholding Foreign Trust. A “nonwithholding foreign trust” means a foreign trust (as defined in section 7701(a)(31)(B)) that is a foreign simple trust or a foreign grantor trust and that is not a withholding foreign trust.

Sec. 2.57. Overwithholding. The term “overwithholding” means any amount actually withheld (determined before application of the adjustment procedures described in section 9 of this Agreement) from an item of income or other payment that is in excess of:

(A) The amount required to be withheld under chapter 4 with respect to such item of income or other payment, if applicable, and,

(B) In the case of an amount subject to chapter 3 withholding, the actual tax liability of the beneficial owner of the income or payment to which the withheld amount is attributable, regardless of whether such overwithholding was in error or appeared correct at the time it occurred.

For purposes of section 3406, the term “overwithholding” means the excess of the amount actually withheld under section 3406 over the amount required to be withheld.

Sec. 2.58. Participating FFI. A “participating FFI” means an FFI that has agreed to comply with the requirements of an FFI Agreement, including an FFI described in a Model 2 IGA that has agreed to comply with the requirements of an FFI Agreement (reporting Model 2 FFI). The term participating FFI also includes a QI branch of a U.S. financial institution, unless such branch is a reporting Model 1 FFI.

Sec. 2.59. Payee. For chapter 4 purposes, a “payee” means a person described in §1.1471-3(a). For purposes of chapter 61, a “payee” means the person to whom a payment is made. For purposes of chapter 3, a “payee” means a person described in §1.1441-1(c)(12).

Sec. 2.60. Payment. A “payment” is considered made to a person if that person realizes income, whether or not such income results from an actual transfer of cash or other property. See §1.1441-2(e). For example, a payment includes crediting an amount to an account. For any payment of a dividend equivalent or qualifying dividend equivalent offsetting payment, a “payment” has the meaning provided in §1.871-15(i). For any qualifying dividend equivalent offsetting payment (notwithstanding the limitation in section 2.70(B) of this Agreement), the payment definition in §1.871-15(i) is applied

as if the qualifying dividend equivalent offsetting payment (notwithstanding the limitation in section 2.70(B) of this Agreement) is a dividend equivalent.

Sec. 2.61. Payor. A “payor” is defined in §31.3406(a)-2 and §1.6049-4(a)(2) and generally means any person required to make an information return under chapter 61. The term includes any person that makes a payment, directly or indirectly, to QI and to whom QI provides information, pursuant to this Agreement, so that such person can report a payment on Form 1099 and, if appropriate, backup withhold. See sections 3.05 and 3.06 of this Agreement. Also see sections 2.90 and 2.54 of this Agreement for the definition of U.S. payor and non-U.S. payor.

Sec. 2.62. Permanent Residence Address. A “permanent residence address” means an address described in §1.1441-1(c)(38).

Sec. 2.63. Potential Section 871(m) Transaction. A “potential section 871(m) transaction” is any securities lending or sale-repurchase transaction, notional principal contract (NPC), or equity linked instrument (ELI) that references one or more underlying securities. For purposes of this definition, securities lending or sale-repurchase transaction, NPC, ELI, reference, and underlying security have the meaning given to the terms in §§1.871-15(a)(13), (7), (4), (11), and (15), respectively.

Sec. 2.64. Presume/Presumption. The terms “presume” and “presumption” refer to the presumption rules set forth in section 5.13(C) of this Agreement.

Sec. 2.65. Private Arrangement Intermediary (PAI). A “private arrangement intermediary” or “PAI” is an intermediary described in section 4 of this Agreement.

Sec. 2.66. Qualified Derivatives Dealer (QDD). A “qualified derivatives dealer” (“QDD”) is an eligible entity that agrees to meet the requirements of §1.1441-1(e)(6)(i) and of this Agreement with respect to payments on potential section 871(m) transactions and underlying securities that it receives or makes as a principal. In order to act as a QDD, QI must apply and be approved for QDD status and must represent itself as a QDD on its Form W-8IMY.

Sec. 2.67. QDD Tax Liability. A “QDD tax liability” is the amount described in section 3.09 of this Agreement.

Sec. 2.68. Qualified Intermediary. A “qualified intermediary” is a person, described in §1.1441-1(e)(5)(ii), that has in effect an agreement with the IRS to be treated as a qualified intermediary and acts as a qualified intermediary.

Sec. 2.69. Qualified Intermediary (QI) EIN. A “qualified intermediary EIN” or “QI-EIN” means the employer identification number assigned by the IRS to a qualified intermediary. QI’s QI-EIN is only to be used when QI is acting as a qualified intermediary. For example, QI must give a withholding agent its EIN (other than its QI-

 

EIN), if any, if it is receiving income as a beneficial owner (excluding when it receives income as a principal when acting as a QDD or as a qualified intermediary assuming primary withholding responsibility for a substitute interest payment). QI must also use its non-QI EIN, if any, when acting as a nonqualified intermediary. Each signatory to this Agreement must have its own QI-EIN (to the extent referenced in this section 2.69).

Sec. 2.70. Qualifying Dividend Equivalent Offsetting Payment.
(A) In General. For purposes of a QI that is acting as a QDD, a “qualifying dividend

equivalent offsetting payment” means:

(1) Any payment made with respect to a potential section 871(m) transaction to a U.S. person that would be a dividend equivalent payment if the payment were made to a foreign person or

(2) Any payment made with respect to a potential section 871(m) transaction to a foreign person that would be a dividend equivalent payment if the payment was not treated as income effectively connected with the conduct of a trade or business within the United States within the meaning of section 864.

(B) Exception. To the extent a QI acting as a QDD does not obtain a waiver and collect and maintain information, as required by section 8.03(C) of this Agreement, from a U.S. non-exempt recipient described in section 2.70(A)(1), any payment made to such person is not a qualifying dividend equivalent offsetting payment.

Sec. 2.71. Recalcitrant Account Holder. A “recalcitrant account holder” means an account holder described in §1.1471-5(g).

Sec. 2.72. Reduced Rate of Withholding. A “reduced rate of withholding” means a rate of withholding under chapter 3 that is less than 30 percent, including an exemption from withholding.

Sec. 2.73. Reliably Associating a Payment With Documentation. See section 5.13(B) of this Agreement to determine whether QI can reliably associate a payment with documentation.

Sec. 2.74. Reportable Amount. A “reportable amount” means U.S. source FDAP income that is an amount subject to chapter 3 withholding (as defined in section 2.04 of this Agreement), U.S. source deposit interest (as defined in section 2.18 of this Agreement), and U.S. source interest or original issue discount paid on the redemption of short-term obligations (as defined in section 2.81 of this Agreement). The term does not include payments on deposits with banks and other financial institutions that remain on deposit for two weeks or less. It also does not include amounts of original issue discount arising from a sale and repurchase transaction completed within a period of two weeks or less, or amounts described in §1.6049-5(b)(7), (10), or (11) (relating to

certain foreign targeted registered obligations and certain obligations issued in bearer form).

Sec. 2.75. Reportable Payment. For purposes of this Agreement, a “reportable payment” means an amount described in section 2.75(A) of this Agreement, in the case of a U.S. payor, and an amount described in section 2.75(B) of this Agreement, in the case of a non-U.S. payor.

(A) U.S. Payor. If QI is a U.S. payor, a “reportable payment” means, unless an exception to reporting applies under chapter 61,–

(1) Any reportable amount;
(2) Any broker proceeds from a sale reportable under §1.6045-1(c); and

(3) Any foreign source interest, dividends, rents, royalties, or other fixed and determinable income.

(B) Non-U.S. Payor. If QI is a non-U.S. payor, a “reportable payment” means, unless an exception to reporting applies under chapter 61, —

(1) Any reportable amount;
(2) Any broker proceeds from a sale effected at an office inside the United States, as

defined in §1.6045-1(g)(3)(iii); and

(3) Any foreign source interest, dividends, rents, royalties, or other fixed and determinable income if such income is not paid outside the United States as described under section 5.13(C)(1) of this Agreement.

Sec. 2.76. Reporting Model 1 FFI. A “reporting Model 1 FFI” means an FFI with respect to which a foreign government or agency thereof agrees to obtain and exchange information pursuant to a Model 1 IGA, other than an FFI that is treated as a nonreporting Model 1 FFI (including a registered deemed-compliant Model 1 IGA FFI) or a nonparticipating FFI under an applicable Model 1 IGA.

Sec. 2.77. Reporting Pool. A “reporting pool” is defined in section 8 of this Agreement.

Sec. 2.78. Responsible Officer. A “responsible officer” of a QI means an officer of the QI with sufficient authority to fulfill the duties of a responsible officer as described in section 10 of this Agreement, including the requirements to periodically certify and to respond to requests by the IRS for additional information to review the QI’s compliance (or that of a PAI).

Sec. 2.79. Section 871(m) Amount. A “section 871(m) amount” means the sum of the 41

amounts by which, for each dividend on each underlying security, (A) the dividends on underlying securities associated with potential section 871(m) transactions and dividend equivalent payments that QI acting as a QDD receives in its dealer capacity exceed (B) the dividend equivalent payments and the qualifying dividend equivalent offsetting payments that QI acting as a QDD makes or is contractually obligated to make with respect to the same dividend in its dealer capacity.

For purposes of determining the QDD tax liability, a dividend or dividend equivalent is treated as received by a QDD acting in its non-dealer capacity if the dividend or dividend equivalent is received by a QDD acting as a proprietary trader. Transactions properly reflected in a QDD’s dealer book are presumed to be held by a dealer in its dealer capacity for purposes of determining the QDD tax liability. In addition, for purposes of determining whether a dealer is acting in its dealer capacity, only the dealer’s activities as a derivatives dealer are taken into account.

Sec. 2.80. Section 871(m) Transaction. A “section 871(m) transaction” is any securities lending or sale-repurchase transaction, specified NPC, or specified ELI described in §1.871-15(a)(13), (d), and (e), respectively.

Sec. 2.81. Short-Term Obligation. A “short-term obligation” is any obligation described in section 871(g)(1)(B)(i).

Sec. 2.82. Substitute Interest. “Substitute interest” means a substitute interest payment described in §1.861-2(a)(7).

Sec. 2.83. Territory FI. A “territory FI” means a financial institution that is incorporated or organized under the laws of any U.S. territory, excluding a territory entity that is an investment entity but is not a depository institution, custodial institution, or specified insurance company (as defined in §1.1471-5(e)(1)(i), (ii), and (iv), respectively).

Sec. 2.84. Underlying Security. For purposes of a QI acting as a QDD or any determination relating to section 871(m), “underlying security” has the meaning provided in §1.871-15(a)(15).

Sec. 2.85. Underlying Security Associated with Potential Section 871(m) Transactions. For purposes of a QI acting as a QDD, “underlying security associated with potential section 871(m) transactions” means any underlying security held by a QDD to manage risk of price changes with respect to a potential section 871(m) transactions that the QDD entered into in the normal course of its business as a dealer.

Sec. 2.86. Underwithholding. “Underwithholding” means the excess of the amount required to be withheld under chapter 3 or 4 or section 3406 over the amount actually withheld.

Sec. 2.87. Undocumented Account Holder. An “undocumented account holder” is an 42

account holder for whom QI does not hold valid documentation.

Sec. 2.88. U.S. Account. A “U.S. account” is any financial account maintained by an FFI that is held by one or more specified U.S. persons or U.S.-owned foreign entities that such FFI reports or elects to report under the FFI Agreement or §1.1471-5(f), as applicable.

Sec. 2.89. U.S. Branch Treated as a U.S. Person. A “U.S. branch treated as a U.S. person” means a U.S. branch of a participating FFI, registered deemed-compliant FFI, or NFFE that is treated as a U.S. person under §1.1441-1(b)(2)(iv)(A).

Sec. 2.90. U.S. Payor. The term “U.S. payor” has the same meaning as in §1.6049- 5(c)(5).

Sec. 2.91. U.S. Person. A “U.S. person” (or “United States person”) is a person described in section 7701(a)(30), the U.S. government (including an agency or instrumentality thereof), a State of the United States (including an agency or instrumentality thereof), or the District of Columbia (including an agency or instrumentality thereof). An individual will not be treated as a U.S. person for purposes of this section for a taxable year or any portion of a taxable year that the individual is a dual resident taxpayer (within the meaning of §301.7701(b)-7(a)(1)) who is treated as a nonresident alien pursuant to §301.7701(b)-7 for purposes of computing his or her U.S. tax liability. The term “U.S. person” or “United States person” also means a foreign insurance company that has made an election under section 953(d), provided that either the foreign insurance company is not a specified insurance company (as described in §1.1471-5(e)(1)(iv)), or the foreign insurance company is a specified insurance company and is licensed to do business in any State of the United States.

Sec. 2.92. U.S. Reportable Account. A “U.S. reportable account” means a financial account maintained by a reporting Model 1 FFI or registered deemed-compliant Model 1 IGA FFI that such FFI reports or elects to report under the applicable domestic law for compliance with and implementation of FATCA.

Sec. 2.93. U.S. Source FDAP. “U.S. source FDAP” means amounts from sources within the United States that constitute fixed or determinable annual or periodical income, as defined in §1.1441-2(b)(1).

Sec. 2.94. U.S. TIN. A “U.S. TIN” means a U.S. taxpayer identification number assigned under section 6109.

Sec. 2.95. Withholding Agent. A “withholding agent” has the same meaning as set forth in §1.1441-7(a) for purposes of chapter 3 and as set forth in §1.1473-1(d) for purposes of chapter 4, and includes a payor (as defined in section 2.61 of this Agreement). As used in this Agreement, the term generally refers to the person making a payment to a qualified intermediary.

Qualified Intermediary Agreement

Sec. 2.96. Withholding Foreign Partnership. A “withholding foreign partnership” or “WP” means a partnership, described in §1.1441-5(c)(2), that has entered into a withholding agreement with the IRS to be treated as a withholding foreign partnership.

Sec. 2.97. Withholding Foreign Trust. A “withholding foreign trust” or “WT” means a trust, described in §1.1441-5(e)(5)(v), that has entered into a withholding agreement with the IRS to be treated as a withholding foreign trust.

Sec. 2.98. Withholdable Payment. A “withholdable payment” means an amount described in §1.1473-1(a).

Sec. 2.99. Withholding Rate Pool. A “withholding rate pool” is defined in section 6.03 of this Agreement and includes a chapter 3 withholding rate pool and a chapter 4 withholding rate pool.

Sec. 2.100. Withholding Statement. The term “withholding statement” is defined in section 6.02 of this Agreement.

Sec. 2.101. Other Terms. Any term not defined in this section has the same meaning that it has under the Code, including the income tax regulations under the Code, any applicable income tax treaty, or any applicable Model 1 or Model 2 IGA with respect to a QI’s FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI. Except as expressly provided in this Agreement, any term relating to a QDD or section 871(m) has the same meaning given to the term in §1.871-15.

SECTION 3. WITHHOLDING RESPONSIBILITY AND QDD TAX LIABILITY Sec. 3.01. Chapters 3 and 4 Withholding Responsibilities.

(A) Chapter 4 Withholding. QI is a withholding agent for purposes of chapter 4 and subject to the withholding and reporting provisions applicable to withholding agents under sections 1471 and 1472 with respect to its accounts. QI is required to withhold 30 percent of any withholdable payment made after June 30, 2014, to an account holder that is an FFI unless either QI can reliably associate the payment (or portion of the payment) with documentation upon which it is permitted to rely to treat the payment as exempt from withholding under §1.1471-2(a)(4) or the payment is made under a grandfathered obligation described in §1.1471-2(b). See §1.1471-2(b)(2)(i)(A)(2) for the definition of grandfathered obligation with respect to an obligation giving rise to a dividend equivalent. QI is also required to withhold 30 percent of any withholdable payment made after June 30, 2014, to an account holder that is an NFFE unless either QI can reliably associate the payment (or portion of the payment) with a certification described in §1.1472-1(b)(1)(ii) or an exception to withholding under §1.1472-1 otherwise applies.

Qualified Intermediary Agreement

If QI is a participating FFI or registered deemed-compliant FFI (other than a reporting Model 1 FFI), QI will satisfy its requirement to withhold under sections 1471(a) and 1472(a) with respect to direct account holders that are entities by withholding on withholdable payments made to nonparticipating FFIs and recalcitrant account holders to the extent required under its FATCA requirements as a participating FFI or registered deemed-compliant FFI. See the FFI Agreement, §1.1471-5(f)(1), or the applicable Model 2 IGA for the withholding requirements that apply to withholdable payments made to account holders of the FFI that are individuals treated as recalcitrant account holders or non-consenting accounts. If QI is a reporting Model 1 FFI or a registered deemed-compliant Model 1 IGA FFI, QI will satisfy its requirement to withhold under section 1471(a) with respect to direct account holders by withholding on withholdable payments made to nonparticipating FFIs to the extent required under its FATCA requirements as a registered deemed-compliant FFI or registered deemed-compliant Model 1 IGA FFI. QI must, however, withhold in the manner described in sections 3.02 and 3.03 of this Agreement for when QI assumes or does not assume primary withholding responsibility for purposes of chapters 3 and 4 regardless of its chapter 4 status.

(B) Chapter 3 Withholding. To the extent that QI makes a payment of an amount subject to chapter 3 withholding, QI is required to withhold 30 percent of the gross amount of any such payment made to an account holder that is (or is presumed) a foreign person unless QI can reliably associate the payment with documentation upon which it can rely to treat the payment as made to a payee that is a U.S. person or as made to a beneficial owner that is a foreign person entitled to a reduced rate of withholding. See section 5 of this Agreement regarding documentation requirements. With respect an amount subject to chapter 4 withholding that is also an amount subject to chapter 3 withholding, QI may credit any tax withheld under chapter 4 against its liability for any tax due under chapter 3 with respect to the payment so that no additional withholding is required on the payment for purposes of chapter 3. Nothing in chapter 4 or the regulations thereunder (including the FFI Agreement) or any applicable IGA relieves QI of its requirements to withhold under chapter 3 to the extent required in this Agreement.

Sec. 3.02. Primary Chapters 3 and 4 Withholding Responsibility Not Assumed.

Notwithstanding sections 1.01 and 3.01 of this Agreement, QI is not be required to withhold with respect to a payment of U.S. source FDAP income if it (a) does not assume primary withholding responsibility under section 3.03 of this Agreement by electing to be withheld upon under §1.1471-2(a)(2)(iii) for purposes of chapter 4, (b) provides the withholding agent from which QI receives the payment with a valid withholding certificate that indicates that QI does not assume primary withholding responsibility for chapters 3 and 4 purposes, and (c) provides correct withholding statements (including information regarding any account holders or interest holders of an intermediary or flow-through entity that holds an account with QI, other than a qualified intermediary that assumes primary withholding responsibility, withholding

foreign partnership, or withholding foreign trust) as described in section 6.02 of this Agreement. However, QI that is acting as a QDD must assume primary withholding responsibility to the extent required under section 3.03(B) of this Agreement. Notwithstanding its election not to assume primary withholding responsibility under chapters 3 and 4, QI shall, however, withhold the difference between the amount of withholding required under chapter 3 or 4 and the amount actually withheld by another withholding agent if QI–

(A) Actually knows that the appropriate amount has not been withheld by another withholding agent; or

(B) Made an error which results in the withholding agent’s failure to withhold the correct amount due (e.g., QI fails to provide an accurate withholding statement with respect to the payment, including a failure to provide information regarding any account holders or interest holders of an intermediary or flow-through entity that holds an account with QI to the extent required in section 6 of this Agreement) and QI has not corrected the underwithholding under section 9.05 of this Agreement. QI is not required to withhold on an amount that it pays to another qualified intermediary that has assumed primary withholding responsibility with respect to the payment or to a withholding foreign partnership or withholding foreign trust. See section 8 of this Agreement regarding QI’s responsibility to report amounts subject to withholding under chapter 3 or 4 on Form 1042-S.

Sec. 3.03. Assumption of Primary Chapters 3 and 4 Withholding Responsibility.

(A) In General. QI, upon notification to a withholding agent, may assume primary withholding responsibility for purposes of chapters 3 and 4 by providing a valid withholding certificate described in section 6 of this Agreement to a withholding agent that makes a payment of U.S. source FDAP income to QI and by designating on the withholding statement associated with such certificate the account(s) for which QI assumes primary withholding responsibility. QI may assume primary withholding responsibility without informing the IRS. QI is not required to assume primary withholding responsibility for all accounts it holds with the withholding agent. If QI assumes primary withholding responsibility for any account, it must assume that responsibility under chapters 3 and 4 for all withholdable payments and amounts subject to chapter 3 withholding made by the withholding agent to that account. QI may assume primary withholding responsibility for U.S. source FDAP payments of substitute interest as described in §1.861-2(a)(7). If QI assumes primary withholding responsibility for payments of substitute interest (as described in this paragraph), it must assume primary withholding responsibility with respect to all such payments. QI assumes primary withholding responsibility for payments of substitute interest for purposes of this Agreement when it assumes such responsibility for payments of interest and substitute interest it receives in connection with a sale-repurchase or similar agreement, a securities lending transaction, or collateral that it holds in connection with its activities as a dealer in securities. As a result, QI may represent its status as a qualified

intermediary on the withholding certificate described in section 6.01 of this Agreement with respect to payments it receives of interest and substitute interest described in the preceding sentence regardless of whether it acts as an intermediary or as a principal with respect to these payments.

To the extent that QI assumes primary withholding responsibility, QI shall withhold as described in section 3.01 of this Agreement. QI is not required to withhold on amounts it pays to another qualified intermediary that has assumed primary withholding responsibility with respect to the payment (including a qualified intermediary acting as a QDD) or to a withholding foreign partnership or a withholding foreign trust. See section 8 of this Agreement regarding QI’s responsibility to report amounts subject to withholding on Form 1042-S.

(B) Assumption of Withholding Responsibility by a QDD. If QI is acting as a QDD, it must assume primary chapters 3 and 4 withholding responsibility for any dividend equivalent payment that it makes and must withhold with respect to a dividend equivalent payment on the dividend payment date for the applicable dividend (as determined in §1.1441-2(e)(4)). A QDD must also assume primary chapter 3 and chapter 4 withholding responsibility for payments made with respect to a potential section 871(m) transaction even if the payment is not a dividend equivalent if the amount paid is an amount subject to chapter 3 or 4 withholding. A QDD is not required to withhold under chapter 3 or 4 on amounts it pays to another qualified intermediary that has assumed primary withholding responsibility with respect to the payment, or to a withholding foreign partnership or a withholding foreign trust. See section 8 of this Agreement regarding QDD’s responsibility to report dividend equivalent payments and other amounts subject to withholding on Form 1042-S.

Sec. 3.04. Backup Withholding Under Section 3406 and Form 1099 Reporting Responsibility.

(A) Backup Withholding. QI is a payor under section 3406 with respect to reportable payments. Under section 3406, unless an exception to backup withholding applies, a payor is required to deduct and withhold 282 percent from a reportable payment to an account holder that is a U.S. non-exempt recipient if the U.S. non-exempt recipient has not provided its U.S. TIN in the manner required under that section; the IRS notifies the payor that the U.S. TIN furnished by the payee is incorrect; there has been a notified payee under-reporting described in section 3406(c); or there has been a payee certification failure described in section 3406(d).

2 See section 3406(a) providing that the current applicable rate of backup withholding is the fourth lowest rate of tax applicable under section 1(c).

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(B) Coordination of Chapter 4 Withholding and Backup Withholding. With respect to a withholdable payment that is also a reportable payment subject to backup withholding under section 3406, QI is not required to withhold under section 3406 if QI withheld on such payment under chapter 4. See §31.3406(g)-1(e). Alternatively, if QI is a participating FFI or a registered deemed-compliant FFI (other than a reporting Model 1 FFI), it may elect to satisfy its obligation to withhold under chapter 4 (or the FFI Agreement) on a withholdable payment made to a recalcitrant account holder that is a U.S. non-exempt recipient by satisfying its backup withholding obligation under section 3406 provided that the payment is also a reportable payment. See section 4 of the FFI Agreement. Nothing in chapter 4 (including the FFI Agreement) or any applicable IGA relieves QI of its requirements to backup withhold under section 3406 to the extent required by this Agreement.

(C) Form 1099 Reporting. If QI applies backup withholding (as described in section 3.04(B) of this Agreement), it must report the amount subject to backup withholding on Form 1099 and not on Form 1042-S.

Sec. 3.05. Primary Form 1099 Reporting and Backup Withholding Responsibility for Reportable Payments Other Than Reportable Amounts. QI is responsible for reporting on Form 1099 and backup withholding on reportable payments other than reportable amounts to the extent required under this section 3.05 and section 8.06 of this Agreement, whether or not QI assumes primary Form 1099 reporting and backup withholding responsibility with respect to reportable amounts under section 3.07 of this Agreement. Further, no provision of this Agreement which requires QI to provide another withholding agent with information regarding reportable amounts shall be construed as relieving QI of its Form 1099 reporting and backup withholding obligations with respect to reportable payments that are not reportable amounts.

See, however, §31.3406(g)-1(e) providing that a payor (irrespective of whether the payor is a U.S. or non-U.S. payor) is not required to backup withhold under section 3406 on a reportable payment that is paid and received outside the United States with respect to an offshore obligation or on gross proceeds from a sale effected outside the United States, unless the payor has actual knowledge that the payee is a U.S. person.

(A) U.S. Payor. Except as provided in section 3.05(C) of this Agreement, if QI is a U.S. payor, QI has primary Form 1099 reporting and backup withholding responsibility for reportable payments other than reportable amounts. For example, if QI is a U.S. payor, it has primary Form 1099 reporting and backup withholding responsibility for payments of foreign source income as well as all broker proceeds paid to account holders that are, or are presumed to be, U.S. non-exempt recipients.

(B) Non-U.S. Payor. If QI is a non-U.S. payor, QI has primary Form 1099 reporting and backup withholding responsibility for broker proceeds described in section 2.75(B)(2) of this Agreement and foreign source fixed and determinable income other than income paid and received outside United States as described in section 2.75(B)(3) of this

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Agreement, if such payments are made (or presumed made) to U.S. non-exempt recipients.

(C) Special Procedure for Broker Proceeds. If QI is a U.S. payor, QI may request another payor that is either a U.S. financial institution or another qualified intermediary to report on Form 1099 and, if required, backup withhold with respect to broker proceeds from a sale that is effected at an office outside the United States (as defined in §1.6045-1(g)(3)(iii)) that QI is otherwise required to report under section 3.05(A) and section 8.05 of this Agreement, provided the other payor actually receives the broker proceeds. In such a case, QI will not be responsible for primary Form 1099 reporting and backup withholding with respect to broker proceeds, provided that the other payor agrees to do the reporting and backup withholding and QI provides all of the information necessary for the other payor to properly report and backup withhold. QI, however, remains responsible for primary Form 1099 reporting and backup withholding if the other payor does not agree to report and backup withhold, or if QI knows that the other payor failed to do so. If, however, QI is a participating FFI or registered deemed- compliant FFI (other than a reporting Model 1 FFI) that reports an account on Form 1099 in order to satisfy its U.S. account reporting requirement under chapter 4, as described in section 8.04 of this Agreement, QI is responsible for reporting on Form 1099 with respect to reportable payments made to such U.S. account and must report in the manner described in the FFI Agreement.

(D) Special Procedure for QDDs. QI acting as a QDD must assume primary Form 1099 reporting and backup withholding responsibility for any payments made with respect to a potential section 871(m) transaction that are reportable payments. Thus, for example, if QI acts as a QDD with respect to an NPC that is a potential section 871(m) transaction and makes a payment pursuant to the NPC to a U.S. person that is a U.S. non-exempt recipient, QI must backup withhold and report any amount paid to the U.S. person to the extent required under section 3406 and §1.6041-1(d)(5). See also section 8.03(C) of this Agreement for a QDD’s Form 1042-S reporting requirements for a qualifying dividend equivalent offsetting payment (notwithstanding the limitation in section 2.70(B) of this Agreement).

Sec. 3.06. Primary Form 1099 Reporting and Backup Withholding Responsibility For Reportable Amounts Not Assumed. Notwithstanding sections 1.01 and 3.04 of this Agreement, QI shall not be required to report on Form 1099 and, if required, backup withhold with respect to a reportable amount if QI does not assume primary Form 1099 reporting and backup withholding responsibility and it provides a payor from which it receives a reportable amount the Forms W-9 of its U.S. non-exempt recipient account holders (or, if a U.S. non-exempt recipient fails to provide a Form W-9, information regarding the account holder’s name, address, and U.S. TIN, if a U.S. TIN is available) together with the withholding rate pools (as defined in section 6.03(D) of this Agreement) attributable to U.S. non-exempt recipient account holders so that such payor may report on Form 1099 and, if required, backup withhold. If QI elects to backup withhold on withholdable payments that are also reportable amounts made to

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recalcitrant account holders that are also U.S. non-exempt recipients, QI shall not be required to report on Form 1099 and backup withhold with respect to a reportable amount if it provides a payor from which it receives a reportable amount information regarding such recalcitrant account holders. See section 6.03 of this Agreement and section 4 of the FFI Agreement. If QI reports its U.S. accounts on Forms 1099 under its FATCA requirements as a participating FFI or registered deemed-compliant FFI, see section 8.04(A) of this Agreement providing that QI cannot delegate to a withholding agent its requirement to report its U.S. accounts. See sections 3.04 and 8.06 of this Agreement for QI’s obligations regarding Form 1099 reporting and backup withholding with respect to reportable amounts and see also section 6.03 of this Agreement for when QI may provide a chapter 4 withholding rate pool of U.S. payees. If QI elects not to assume primary Form 1099 reporting and backup withholding responsibility, QI must provide the withholding agent with such information regarding any account holders or interest holders of an intermediary or flow-through entity that holds an account with QI. See also sections 3.05(D) and 3.07 of this Agreement requiring a QI acting as a QDD for payments with respect to potential section 871(m) transactions to assume primary Form 1099 and backup withholding responsibility for such amounts. Notwithstanding its election not to assume primary Form 1099 reporting and backup withholding responsibility, QI shall backup withhold and report a reportable amount to the extent required under sections 3.04 and 8.06 of this Agreement if–

(A) QI actually knows that a reportable amount is subject to backup withholding and that another payor failed to apply backup withholding, or

(B) Another payor has not applied backup withholding to a reportable amount because of an error made by QI (e.g., QI failed to provide the other payor with information regarding the name, address, U.S. TIN (if available), and withholding rate pool for a U.S. non-exempt recipient account holder subject to backup withholding, including a failure to provide information regarding any account holders or interest holders of an intermediary or flow-through entity that holds an account with QI to the extent required in section 6 of this Agreement).

QI is not required to backup withhold, however, on a reportable amount that QI makes to a withholding foreign partnership, withholding foreign trust, or another qualified intermediary that has assumed primary Form 1099 reporting and backup withholding responsibility with respect to the payment. QI is also not required to backup withhold on a reportable amount that QI makes to an intermediary or flow-through entity that is a participating FFI, registered deemed-compliant FFI, or another qualified intermediary that does not assume primary Form 1099 reporting and backup withholding responsibility with respect to the payment provided that such intermediary or flow- through entity allocates the payment on its withholding statement to a chapter 4 withholding rate pool of U.S. payees and the withholding statement is associated with a valid Form W-8IMY that provides the applicable certification(s) for allocating the payment to this pool or allocates the payment on its withholding statement to a chapter 4 withholding rate pool of recalcitrant account holders. See section 3.05 of this

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Agreement for backup withholding responsibility for reportable payments other than reportable amounts. See section 8.06 of this Agreement regarding QI’s responsibility to report reportable payments on Form 1099.

Sec. 3.07. Assumption of Primary Form 1099 Reporting and Backup Withholding Responsibility. QI may assume primary Form 1099 reporting responsibility and primary backup withholding responsibility with respect to reportable amounts without approval from the IRS. See sections 3.04 and 8.06 of this Agreement for QI’s obligations regarding Form 1099 reporting and backup withholding with respect to reportable amounts. QI that assumes such responsibility is subject to all of the obligations imposed by chapter 61 and section 3406, as modified by this Agreement, and QI shall be subject to any applicable penalties for failure to meet those obligations. QI shall inform a payor from which it receives a reportable amount that it has assumed primary Form 1099 reporting and backup withholding responsibility by providing the payor with a valid withholding certificate described in section 6 of this Agreement and by designating on the withholding statement associated with such certificate the account(s) for which QI assumes primary Form 1099 reporting and backup withholding responsibility. QI may assume primary Form 1099 reporting and backup withholding responsibility without informing the IRS.

QI is not required to assume primary Form 1099 reporting and backup withholding responsibility for all accounts it holds with a payor. However, if QI assumes primary Form 1099 reporting and backup withholding responsibility for any account, it must assume that responsibility for all reportable amounts made by a payor to that account.

If QI is acting as a QDD, it must assume primary Form 1099 reporting and backup withholding responsibility with respect to any payment made with respect to a potential section 871(m) transaction, provided that the amount is a reportable payment. In addition, if QI is assuming primary withholding responsibility for payments of substitute interest (as described in section 3.03(A) of this Agreement), it must assume primary Form 1099 reporting and backup withholding responsibility with respect to all such payments.

QI shall not be required to backup withhold on a reportable amount it makes to a withholding foreign partnership, withholding foreign trust, or another qualified intermediary that has assumed primary Form 1099 reporting and backup withholding responsibility with respect to the reportable amount. QI is also not required to backup withhold on a reportable amount that QI makes to an intermediary or flow-through entity that is a participating FFI, registered deemed-compliant FFI, or another qualified intermediary that does not assume primary Form 1099 reporting and backup withholding responsibility with respect to the payment provided that such intermediary or flow-through entity allocates the payment on its withholding statement to a chapter 4 withholding rate pool of U.S. payees and the withholding statement is associated with a valid Form W-8IMY that provides the applicable certification(s) for allocating the payment to this pool or allocates the payment on its withholding statement to a chapter

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4 withholding rate pool of recalcitrant account holders. See section 8 of this Agreement regarding QI’s responsibility to report reportable payments on Form 1099.

Sec. 3.08. Deposit Requirements. If QI assumes primary withholding responsibility under chapters 3 and 4 or primary Form 1099 reporting and backup withholding responsibility, it must deposit amounts withheld under chapter 3 or 4 or section 3406 at the time and in the manner provided under section 6302 (see §1.6302-2) by electronic funds transfer as provided under §31.6302-1(h). If QI is a non-U.S. payor that does not assume primary withholding responsibility under chapters 3 and 4 or primary Form 1099 reporting and section 3406 backup withholding responsibility, QI must deposit amounts withheld by the 15th day following the month in which the withholding occurred.

If QI is acting as a QDD, it must also make deposits with respect to its QDD tax liability. At the time the QDD determines that it has a QDD tax liability (as described in section 3.09(D) of this Agreement), it must deposit any tax for which it is liable at the time and in the manner provided under section 6302 (see §1.6302-2) (substituting the term “QDD” for “withholding agent” and “sections 871(a) and 881” for “chapter 3” and “due under sections 871 and 881” for “withheld pursuant to chapter 3”) by electronic funds transfer as provided in §31.6302-1(h). See section 3.09(D) of this Agreement for the timing for determining the QDD tax liability. The deposit requirements under section 6302 and §1.6302-2 apply separately to amounts due for a QDD’s QDD tax liability and any amounts withheld under chapters 3 and 4.

Sec. 3.09. QDD Tax Liability. In addition to satisfying its withholding tax liability as described in this Agreement, a QDD must satisfy its QDD tax liability. The QDD’s QDD tax liability is the sum of its tax liability under sections 871(a) and 881, if any, for:

(A) its section 871(m) amount (as defined in section 2.79 of this Agreement) for amounts received and made as a QDD in its dealer capacity;

(B) its dividends that are not on underlying securities associated with potential section 871(m) transactions and its dividend equivalent payments received as a QDD in its non- dealer capacity; and

(C) any payments, such as interest, received as a QDD with respect to potential section 871(m) transactions or underlying securities that are not dividend or dividend equivalent payments.

A QDD that is a foreign branch of a U.S. financial institution does not have a QDD tax liability and is not required to report such liability on Form 1042. Instead, such a QDD must determine and report its tax liability in accordance with chapter 1 and the appropriate income tax return filing obligations for the U.S. corporation.

(D) Timing for Determining QDD Tax Liability. A QDD must determine its QDD tax liability due under sections 3.09(A) and (B) for each underlying security and section

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871(m) transaction on the date that a dividend is paid on the underlying security, as provided in §1.1441-2(e)(4). A QDD must determine its QDD tax liability due under section 3.09(C) at the time such payments are made, as provided in §1.1441-2(e).

See section 7.01(C) of this Agreement regarding QI that is acting as a QDD’s responsibility to report on Form 1042 its QDD tax liability and to maintain a reconciliation schedule for its section 871(m) amount and other amounts related to its QDD tax liability.

SECTION 4. PRIVATE ARRANGEMENT INTERMEDIARIES AND CERTAIN PARTNERSHIPS AND TRUSTS

Sec. 4.01. Private Arrangement Intermediaries–In General. If QI is an FFI, QI may enter into a private arrangement with another intermediary under which the other intermediary agrees to perform all of the obligations of QI under this Agreement, except as modified in section 4.03 of this Agreement. QI, however, when acting as a QDD may not enter into a private arrangement under this section 4.01 with any account holder for which it acts as a QDD. The agreement between QI and the other intermediary shall be between QI and all the offices of the other intermediary located in a specified jurisdiction. The specified jurisdiction must be one for which this Agreement is available (i.e., IRS has approved the know-your-customer practices). Such an intermediary is referred to in this Agreement as a private arrangement intermediary (PAI). By entering into a PAI agreement, QI is not assigning its liability for the performance of any of its obligations under this Agreement. Therefore, QI shall remain liable for any tax, penalties, interest, and any other sanctions that may result from the failure of the PAI to meet any of the obligations imposed by its agreement with QI. QI agrees not to assert any defenses against the IRS for the failures of the PAI or any defenses that the PAI may assert against QI. For purposes of this Agreement, the PAI’s actual knowledge or reason to know of facts relevant to withholding or reporting shall be imputed to QI. QI’s liability for the failures of the PAI shall apply even though the PAI is itself a withholding agent under chapters 3 and 4 and a payor under chapter 61 and section 3406 and is itself separately liable for its failure to meet its obligations under the Code. Notwithstanding the foregoing, QI shall not be liable for tax, interest, or penalties for failure to withhold and report under chapters 3, 4, and 61 and section 3406 unless the underwithholding or the failure to report amounts correctly on Forms 945, 1042, 1042-S, 1099, or 8966 is due to QI’s or its PAI’s failure to properly perform its obligations under this Agreement. The PAI is not required to enter into an agreement with the IRS but must respond (either directly or through QI) to IRS inquiries related to its compliance described in section 10.08 of this Agreement. The IRS may, however, in its sole discretion, refuse to permit an intermediary to operate as a PAI by providing notice to QI at the address provided in section 12.06 of this Agreement. QI may, however, appeal the IRS’s determination by following the notice and cure provisions in section 11.06 of this Agreement. For purposes of this Agreement, an intermediary shall be considered a PAI only if the following conditions are met:

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(A) The PAI is a certified deemed-compliant FFI (other than a registered deemed- compliant Model 1 IGA FFI) that acts as an intermediary with respect to reportable amounts and has provided QI with a certification that it has maintained such certified deemed-compliant FFI status during each certification period;

(B) The PAI does not act as an intermediary for a direct account holder that is a qualified intermediary, withholding foreign trust, withholding foreign partnership, participating FFI, registered deemed-compliant FFI, or a registered deemed-compliant Model 1 IGA FFI;

(C) The PAI is, pursuant to a written agreement between QI and the PAI (PAI agreement), subject to all the obligations of QI under this Agreement, except to the extent modified by sections 4.02 and 4.03 of this Agreement;

(D) For purposes of chapter 4, the PAI agrees to comply with the FATCA requirements applicable to its chapter 4 status as a certified deemed-compliant FFI, as modified by sections 4.02 and 4.03 of this Agreement, and is not required to fulfill QI’s FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI;

(E) QI identifies the PAI on the FATCA registration website before the first payment for which the PAI is operating under the PAI agreement;

(F) PAI agrees, to the extent necessary for QI to satisfy its compliance obligations (e.g., if QI does not receive a waiver described in section 10.07 of this Agreement), either to provide its documentation and other information to QI for inclusion in QI’s periodic review described in section 10.04 of this Agreement or to conduct an independent periodic review in accordance with the procedures described in section 10.05 of this Agreement, and provide QI with the certification required under section 10.03 of this Agreement for each certification period in order to allow the responsible officer of QI to make a certification to the IRS regarding PAI’s compliance, and agrees to respond (either directly or through QI) to IRS inquiries regarding its periodic review described in section 10.08 of this Agreement, including providing the QI and the IRS with the periodic review report described in section 10.06 of this Agreement;

(G) The PAI furnishes QI with a Form W-8IMY and withholding statement described in section 6 of this Agreement as modified by this section 4.01(G). The PAI is required to provide QI with Forms W-9 (or, in absence of the form, the name, address, and U.S. TIN (if available)) of the PAI’s U.S. non-exempt recipient account holders and the withholding rate pool information for those account holders as required by section 6.03(D) of this Agreement so that the QI (or the payor) may report on Form 1099 and, if required, backup withhold. In addition, the PAI is required to disclose to QI any account holder of PAI that is a passive NFFE with one or more substantial U.S. owners (or one or more controlling persons that is a specified U.S. person) as defined in §§1.1471- 1(b)(74) and 1.1473-1(b), respectively (or in the applicable IGA), and the account

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holders or interest holders of any nonqualified intermediary or flow-through entity, respectively, which has an account with the PAI, and provide all of the documentation and other information relating to those account holders and interest holders that is required for the QI, or another withholding agent, to report the payments made to those account holders and interest holders to the extent required by sections 8.02(B) and 8.05 of this Agreement. Except to the extent the PAI provides its information to QI for purposes of performing the periodic review, the PAI is not required to disclose to QI, or another withholding agent, its direct account holders that are foreign persons other than a passive NFFE with one or more substantial U.S. owners (or one or more controlling persons that is a specified U.S. person); and

(H) The PAI agrees to notify QI if the PAI no longer meets the requirements for certified deemed-compliant status, and upon such notification, the agreement between the PAI and QI will terminate.

Sec. 4.02. Modification of Obligations for PAI Agreements.

(A) Payments Reportable under Chapters 3 and 4. The agreement between QI and a PAI must provide that QI shall report all payments of amounts subject to chapter 3 or 4 withholding made by the PAI on QI’s Forms 1042 and 1042-S as if QI had made the payments directly to the PAI’s account holders. Therefore, QI shall report payments made to each of the following types of a PAI’s account holders as follows:

(1) A direct account holder of the PAI that is a nonparticipating FFI, QI shall report an amount subject to chapter 4 withholding using the chapter 4 reporting pool described in section 8.03 of this Agreement with the PAI reported as the recipient with respect to the pool.

(2) A direct foreign account holder of the PAI for which no withholding is required under chapter 4 (other than an intermediary, custodian, nominee, agent, or flow-through entity described below), QI shall report an amount subject to chapter 3 withholding using the chapter 3 reporting pools as described in section 8.03 of this Agreement with the PAI reported as the recipient.

(3) A direct foreign account holder of the PAI that is a nonqualified intermediary or flow- through entity, QI shall report payments of amounts subject to chapter 4 withholding with respect to any indirect account holders of the PAI that the nonqualified intermediary or flow-through entity includes in a chapter 4 withholding rate pool of nonparticipating FFIs using the chapter 4 reporting pool for such account holders described in section 8.03 of this Agreement with the nonqualified intermediary or flow-through entity reported as the recipient and shall report payments of amounts subject to chapter 3 withholding made with respect to indirect foreign account holders of the PAI that are not subject to chapter 4 withholding by reporting the payments as made to specific recipients under the rules of section 8.02 of this Agreement.

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(B) Form 1099 Reporting and Backup Withholding. The agreement between QI and a PAI must also provide that QI shall report all reportable payments made by the PAI on QI’s Forms 945 and 1099 to the extent required under this section 4.02(B). QI shall file Forms 1099 and backup withhold, if required, on reportable payments made by QI (including by a PAI) to U.S. non-exempt recipients that are direct or indirect account holders of a PAI in accordance with the terms of this Agreement.

(C) Form 8966 Reporting. The agreement between QI and a PAI must also provide that QI shall report all withholdable payments made by the PAI on Form 8966 to the extent required under this section 4.02(C). QI shall file Forms 8966 to report withholdable payments made by QI (including by a PAI) to passive NFFEs with one or more substantial U.S. owners (or one or more controlling persons that is a specified U.S. person) that are direct or indirect account holders of a PAI in accordance with section 8.05 of this Agreement.

Sec. 4.03. Other Requirements of PAI Agreement. QI shall require a PAI to provide QI with all the information necessary for QI to meet its obligations under this Agreement. No provisions shall be contained in the agreement between QI and a PAI that preclude, and no provisions of this Agreement shall be construed to preclude, the PAI’s joint and several liability for tax, penalties, and interest under chapters 3, 4, and 61 and section 3406 to the extent that underwithholding, penalties, and interest have not been collected from QI and the underwithholding or failure to report amounts correctly on Forms 945, 1042, 1042-S, 1099, or Form 8966 are due to a PAI’s failure to properly perform its obligations under its agreement with QI. Nothing in the agreement between QI and a PAI shall be construed to limit the PAI’s requirements under chapter 4 or an applicable IGA. Further, nothing in the agreement between QI and a PAI shall permit the PAI to assume primary chapters 3 and 4 withholding responsibility or assume primary Form 1099 reporting and backup withholding responsibility.

Sec. 4.04. Termination of Arrangement. Except as otherwise provided in section 4.01(H) of this Agreement, QI shall cease to treat an intermediary as a PAI within 90 days from the day QI knows that the PAI is in default of its agreement with QI unless the PAI has cured the event of default prior to the expiration of such 90-day period. QI must provide the IRS with notice of any PAI agreement that has been terminated within 30 days of the termination by removing the intermediary as a PAI on the FATCA registration website.

Sec. 4.05. Joint Account Treatment for Certain Partnerships and Trusts.

(A) In General. If QI is an FFI, QI may enter an agreement with a nonwithholding foreign partnership or nonwithholding foreign trust that is either a simple or grantor trust described in this section 4.05(A) to apply the simplified joint account documentation, reporting, and withholding procedures provided in section 4.05(B) of this Agreement. QI, however, when acting as a QDD, may not enter into an agreement under this section 4.05 with a nonwithholding foreign partnership or nonwithholding foreign trust

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account holder for which it acts as a QDD. QI and a partnership or trust that apply this section 4.05 to any calendar year must apply these rules to the calendar year in its entirety. QI and the partnership or trust may not apply this section 4.05 to any calendar year in which the partnership or trust has failed to make available to QI or QI’s reviewer the records described in this section 4.05(A) within 90 days after these records are requested, and the partnership or trust must waive any legal prohibitions against providing such records to QI. If the partnership or trust has failed to make these records available within the 90-day period, or if QI and the partnership or trust fail to comply with any other requirements of this section 4.05, QI must apply the provisions of §§1.1441- 1(c) and 1.1441-5(e) to the partnership or trust as a nonwithholding foreign partnership or nonwithholding foreign trust, must correct its withholding for the period during which the failure occurred in accordance with section 9.05 of this Agreement, and cannot apply this section 4.05 to subsequent calendar years. QI and a partnership or trust that apply this section 4.05 to any calendar year are not required to apply this section 4.05 to subsequent calendar years.

A partnership or trust is described in this section 4.05(A) of this Agreement if the following conditions are met:

(1) The partnership or trust has a chapter 4 status as a certified deemed-compliant FFI (other than a registered deemed-compliant Model 1 IGA FFI), an owner-documented FFI with respect to QI, an exempt beneficial owner, or an NFFE or is covered as an account that is excluded from the definition of financial account under Annex II of an applicable IGA or under §1.1471-5(a) and has provided QI with a certification that it has maintained such chapter 4 status during each certification period;

(2) The partnership or trust is a direct account holder of QI;

(3) None of the partnership’s or trust’s partners, beneficiaries, or owners is a flow- through entity or is acting as intermediary for a payment made by QI to the partnership or trust;

(4) None of the partnership’s or trust’s partners, beneficiaries, or owners is a U.S. person and none of its foreign partners, beneficiaries, or owners is subject to withholding or reporting under chapter 4 (which would include a nonparticipating FFI and certain passive NFFEs); and

(5) The partnership or trust agrees to make available upon request to QI or QI’s reviewer for purposes of QI’s periodic review under section 10 of this Agreement (including to respond to IRS inquiries regarding its compliance review) records that establish that the partnership or trust has provided QI with documentation for purposes of chapters 3 and 4 for all of its partners, beneficiaries, or owners.

(B) Modification of Obligations for QI.

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(1) QI may rely on a valid Form W-8IMY provided by the partnership or trust and may rely on a withholding statement that meets the requirements of §1.1441-5(c)(3)(iv) or (e)(5)(iv), and §1.1471-3(c)(3)(iii)(B), if the payment is a withholdable payment, and that provides information for all partners, beneficiaries, or owners together with valid Forms W-8 or, in the case of a partnership or trust that is a certified deemed-compliant FFI, documentary evidence listed in the know-your-customer (KYC) attachment to this Agreement from each partner, beneficiary, or owner, and, for a withholdable payment, documentation that meets the requirements of §1.1471-3(d) to establish the partner’s, beneficiary’s, or owner’s chapter 4 status. The withholding statement need not provide any allocation information.

(2) QI must treat payments to the partnership or trust as allocated solely to a partner, beneficiary, or owner that is subject to the highest rate of withholding under chapter 3 and must withhold at that rate.

(3) QI may pool report amounts distributed to, or included in the distributive share of, the partnership’s or trust’s direct partners, beneficiaries, or owners in chapter 3 reporting pools on Form 1042-S as described in section 8.03(B) of this Agreement.

(4) After QI has withheld in accordance with section 4.05(B)(2) of this Agreement, it may file a separate Form 1042-S for any partner, beneficiary, or owner who requests that it do so. If QI issues a separate Form 1042-S for any partner, beneficiary, or owner, it cannot include such partner, beneficiary, or owner in QI’s chapter 3 reporting pool. If QI has already filed a Form 1042-S and included the partner, beneficiary, or owner in a chapter 3 reporting pool, it must file an amended return to reduce the amount of the payment reported to reflect the amount allocated to the recipient on the recipient’s specific Form 1042-S. QI may file a separate Form 1042-S for a partner, beneficiary, or owner only if the partnership or trust provides a withholding statement that includes allocation information for the requesting partner, beneficiary, or owner and only if the partnership or trust has agreed in writing under section 4.05(A)(5) of this Agreement to make available to QI or QI’s reviewer the records that substantiate the allocation information included in its withholding statement.

(5) QI may not include any payments made to a partnership or trust to which QI is applying the rules of this section 4.05 in any collective refund claim made under section 9.04 of this Agreement.

Sec. 4.06. Agency Option for Certain Partnerships and Trusts. QI may enter an agreement with a nonwithholding foreign partnership or nonwithholding foreign trust that is either a simple or grantor trust described in section 4.06(A) of this Agreement under which the partnership or trust agrees to act as an agent of QI with respect to its partners, beneficiaries, or owners, and, as QI’s agent, to apply the provisions of the QI Agreement to the partners, beneficiaries, or owners. QI, however, when acting as a QDD may not enter an agreement under this section 4.06 with any account holder for which it acts as a QDD. By entering into an agreement with a partnership or trust as

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described in this section 4.06, QI is not assigning its liability for the performance of any of its obligations under this Agreement. QI and the partnership or trust to which QI applies the rules of this section 4.06 are jointly and severally liable for any tax, penalties, and interest that may result from the failure of the partnership or trust to meet any of the obligations imposed by its agreement with QI. QI and a partnership or trust that applies the agency option to any calendar year must apply these rules to the calendar year in its entirety. Generally, QI and a partnership or trust that applies the agency option to any calendar year is not required to apply the agency option to subsequent calendar years. If, however, QI withholds and reports any adjustments required by corrected information in a subsequent calendar year under section 4.06(B)(2) of this Agreement, QI must apply the agency option to that calendar year in its entirety. QI and a partnership or trust may not apply the agency option to any calendar year when the partnership or trust has failed to make available to QI or QI’s reviewer the records described in section 4.06 of this Agreement within 90 days after these records are requested, and the partnership or trust must waive any legal prohibitions against providing such records to QI. If, for any calendar year, the partnership or trust has failed to make these records available within the 90-day period, or if QI and the partnership or trust fail to comply with any other requirement of this section 4.06, QI must apply §§1.1441-1(c) and 1.1441-5(e) to the partnership or trust as a nonwithholding foreign partnership or nonwithholding foreign trust, must correct its withholding for the period in which the failure occurred in accordance with section 9.05 of this Agreement, and cannot apply the agency option to subsequent calendar years.

(A) A partnership or trust is described in this section 4.06(A) of this Agreement if the following conditions are met:

(1) The partnership or trust is either a direct account holder of QI or an indirect account holder of QI that is a direct partner, beneficiary, or owner of a partnership or trust to which QI also applies the agency option.

(2) The partnership or trust has a chapter 4 status as a certified deemed-compliant FFI (other than a registered deemed-compliant Model 1 IGA FFI), an owner-documented FFI, an NFFE, an exempt beneficial owner, or is covered as an account that is excluded from the definition of financial account under Annex II of an applicable IGA or under §1.1471-5(a) and has provided QI with a certification that it has maintained such chapter 4 status during each certification period;

(3) None of the partnership’s or trust’s partners, beneficiaries, or owners is a withholding foreign trust, withholding foreign partnership, participating FFI, registered deemed- compliant FFI, registered deemed-compliant Model 1 IGA FFI, or another qualified intermediary acting as an intermediary for a payment made by QI to the partnership or trust.

(4) The partnership or trust agrees to permit QI to treat its direct partners, beneficiaries, or owners as direct account holders of QI under this Agreement and to treat its indirect

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partners, beneficiaries, or owners as indirect account holders of QI under this Agreement.

(5) The partnership or trust agrees, to the extent necessary for QI to satisfy its compliance obligations (e.g., if the QI does not receive a waiver described in section 10.07 of this Agreement), either to provide its documentation and other information to QI for inclusion in QI’s periodic review described in section 10.04 of this Agreement or to conduct an independent periodic review in accordance with the procedures described in section 10.05 of this Agreement, provide QI with the certification required under section 10.03 of this Agreement for each certification period in order to allow the responsible officer of QI to make a certification to the IRS regarding the partnership’s or trust’s compliance with this section 4.06, and respond (either directly or through QI) to IRS inquiries regarding its compliance review described in section 10.07 of this Agreement, including providing the QI and the IRS with the results of the reviewer’s testing of transactions and accounts described in section 10.06 of this Agreement.

(B) Modification of Obligations for QI.

(1) QI may rely on a valid Form W-8IMY provided by the partnership or trust, together with a withholding statement described in §1.1441-5(c)(3)(iv) or (e)(5)(iv) and §1.1471- 3(c)(3)(iii)(B), if the payment is a withholdable payment, that includes all information necessary for QI to fulfill its withholding, reporting, and filing obligations under this Agreement. The withholding statement may include chapter 3 withholding rate pools described in section 6.03 of this Agreement for partners, beneficiaries, or owners that are not intermediaries, flow-through entities (or persons holding interests in the partnership or trust through such entities), U.S. persons, or passive NFFEs with one or more substantial U.S. owners (or one or more controlling persons that is a specified U.S. person), and the partnership or trust need not provide to QI documentation for these partners, beneficiaries, or owners. The withholding statement may also include a chapter 4 withholding rate pool of nonparticipating FFIs described in section 6.03 of this Agreement for payments of amounts subject to chapter 4 withholding. Notwithstanding the preceding sentences of this section 4.06(B)(1), the partnership or trust is required to disclose to QI any interest holder that is a passive NFFE with substantial U.S. owners (or controlling persons that are specified U.S. persons) or that is a U.S. non-exempt recipient, as well as the account holders or interest holders of any nonqualified intermediary or flow-through entity, respectively, which has an interest in the partnership or trust, and to provide all of the documentation and other information relating to those account holders and interest holders that is required for the QI, or another withholding agent, to report the payments made to those account holders and interest holders to the extent required by sections 8.02(B) and 8.05 of this Agreement.

(2) Timing of Withholding. QI must withhold on the date it makes a payment to the partnership or trust based on a withholding statement provided by the partnership or trust on which QI is permitted to rely. The amount allocated to each partner, beneficiary, or owner in the withholding statement may be based on a reasonable

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estimate of the partner’s, beneficiary’s, or owner’s distributive share of income subject to withholding for the year. The partnership or trust must correct the estimated allocations to reflect the partner’s, beneficiary’s, or owner’s actual distributive share and must provide this corrected information to QI on the earlier of the date that the statement required under section 6031(b) (i.e., Schedule K-1) or the Beneficiary Statement or Owner Statement is mailed or otherwise provided to the partner, beneficiary, or owner, or the due date for furnishing the statement (whether or not the partnership or trust is required to prepare and furnish the statement). If that date is after the due date (without regard to extensions) for QI’s Forms 1042 and 1042-S for the calendar year, QI may withhold and report any adjustments required by the corrected information in the following calendar year.

(3) Payments Reportable Under Chapters 3 and 4. QI shall report on Form 1042-S all amounts subject to chapters 3 and 4 withholding distributed to, or included in the distributive share of, the partnership or trust as follows:

(a) For a direct partner, beneficiary, or owner of the partnership or trust that is a nonparticipating FFI, QI shall report an amount subject to withholding using the chapter 4 reporting pool described in section 8.03(A) of this Agreement with the partnership or trust reported as a recipient.

(b) For a direct partner, beneficiary, or owner of the partnership or trust that is a foreign person for which no withholding is required under chapter 4 (other than an intermediary, agent, or flow-through entity described below), QI shall report an amount subject to chapter 3 withholding using the chapter 3 reporting pools described in section 8.03(B) of this Agreement with the partnership or trust reported as a recipient.

(c) For a direct or indirect partner, beneficiary, or owner of the partnership or trust that is a nonqualified intermediary or foreign flow-through entity, QI shall report payments of amounts subject to chapter 4 withholding in a chapter 4 withholding rate pool of nonparticipating FFIs using the chapter 4 reporting pool for such partner, beneficiary, or owner with the nonqualified intermediary or foreign flow-through entity reported as the recipient, and QI shall report payments of amounts subject to chapter 3 withholding for which no chapter 4 withholding is required by reporting the payments as made to specific recipients as described in section 8.02 of this Agreement.

(4) Form 1099 Reporting and Backup Withholding. The agreement between QI and the partnership or trust must also provide that QI shall include all reportable payments made by the partnership or trust in QI’s Forms 945 and 1099 to the extent required under this section 4.06(B)(4). QI shall file Forms 1099 and backup withhold, if required, on reportable payments made by QI to U.S. non-exempt recipient that are direct or indirect partners, beneficiaries, owners of the partnership or trust in accordance with the terms of this Agreement.

(5) Form 8966 Reporting Requirements. The agreement between QI and the 61

partnership or trust must also provide that QI shall report all withholdable payments made by the partnership or trust on Form 8966 to the extent required under this section 4.06(B)(5). If the partnership or trust is itself a passive NFFE and if any of its partners, beneficiaries, or owners is a passive NFFE with one or more substantial U.S. owners (or one or more controlling persons that is a specified U.S. person), QI shall file Forms 8966 to report all withholdable payments made by QI to any such passive NFFE in accordance with sections 8.04 and 8.05 of this Agreement.

(C) Other Requirements of Agency Agreement. QI shall require the partnership or trust to provide QI with all the information necessary for QI to meet its obligations under this Agreement. No provisions shall be contained in the agreement between QI and the partnership or trust that preclude, and no provisions of this Agreement shall be construed to preclude, the partnership or trust’s joint and several liability for tax, penalties, and interest under chapters 3, 4, and 61 and section 3406, to the extent that the underwithholding, penalties, and interest have not been collected from QI and the underwithholding or failure to report amounts correctly on Forms 945, 1042, 1042-S, 1099, or 8966 is due to the partnership’s or trust’s failure to properly perform its obligations under its agreement with QI. Nothing in the agreement between QI and the partnership or trust shall be construed to limit the partnership’s or trust’s requirements under chapter 4 as a certified deemed-compliant FFI, owner-documented FFI, NFFE, or exempt beneficial owner. Further, nothing in the agreement between QI and the partnership or trust shall permit the partnership or trust to assume primary chapters 3 and 4 withholding responsibility or primary Form 1099 reporting and backup withholding responsibility.

SECTION 5. DOCUMENTATION REQUIREMENTS

Sec. 5.01. Documentation Requirements.

(A) Coordination of Documentation Requirements with Chapter 4.
(1) QI that is an FFI. If QI is an FFI, QI is required to perform the due diligence procedures for each account holder for whom QI is acting under its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI to determine if the account is a U.S. account (or U.S. reportable account) and each account holder that is a nonparticipating FFI and, if applicable, recalcitrant account holder (or non-consenting U.S. account). See QI’s FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI to perform due diligence with respect to each account that it maintains. If an account holder receiving the payment is not the payee, QI is also required to establish the chapter 4 status of the payee or payees to determine whether withholding applies under chapter 4. See section 5.13(B)(1) of this Agreement for the requirements for QI to reliably associate a withholdable payment with a Form W-8IMY for chapter 4 purposes. To the extent an account holder receives a payment with respect to which QI has determined that withholding is not required under chapter 4, QI shall obtain, unless already collected, documentation that meets the

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requirements of this section 5 to determine whether the account holder is a foreign person for which QI is required to withhold under chapter 3 or a U.S. payee for which QI is required to backup withhold under section 3406 or report on Form 1099 under chapter 61. See, however, section 8.06 of this Agreement providing the circumstances in which reporting of U.S. accounts (or U.S. reportable accounts) under its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI satisfies QI’s Form 1099 reporting responsibilities. See Notice 2014-33, 2014-21 I.R.B. 1033, which modifies the time in which QI is required to implement the applicable due diligence procedures under its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI with respect to an obligation held by an entity that is opened, issued, or executed on or after July 1, 2014, and before January 1, 2015.

(2) QI that is an NFFE. If QI is an NFFE, QI is required to document the chapter 4 status of each account holder for whom QI is acting to determine if withholding and reporting apply under section 1471 or 1472 on withholdable payments made to the account holder. QI is required to obtain, unless already collected, a valid Form W-8 or Form W-9 from each account holder to determine whether QI is required to withhold under chapter 3 or 4 or report on Form 1099 under chapter 61. Thus, the allowance in this section 5 for QI to obtain documentary evidence does not apply if QI is an NFFE. QI may, however, obtain appropriate documentary evidence as additional documentation to establish the foreign status of an account holder. See §1.1471- 3(e)(4) for when QI will have reason to know that an entity’s claim of chapter 4 status is unreliable or incorrect and §1.1471-3(c)(6)(ii)(E) for QI’s requirements following a change in circumstances.

(B) General Documentation Requirements. QI agrees to use its best efforts to obtain documentation from account holders that receive a reportable payment to determine whether withholding applies or whether a payment is reportable under this Agreement. If QI is an FFI obtaining documentary evidence, QI also agrees to adhere to the know- your-customer rules that apply to QI with respect to the account holder from whom the documentary evidence is obtained. Unless QI can reliably associate a reportable payment with valid documentation from the account holder under section 5.13(B) of this Agreement, QI shall apply the presumption rules described in section 5.13(C) of this Agreement to any account holder that receives a reportable payment to determine if withholding is required under chapter 3 or 4 or if backup withholding is required under section 3406. As set forth in section 11.06 of this Agreement, failure to obtain documentation from a significant number of direct account holders constitutes an event of default. QI agrees to review and maintain documentation in accordance with this section 5 and, in the case of documentary evidence obtained from direct account holders, in accordance with the know-your-customer rules set forth in the Attachments to this Agreement. QI also agrees, if the performance of an external review is requested by IRS as described in section 10.08(D) of this Agreement, to make documentation (together with any associated withholding statements and other documents or information) available upon request for inspection by QI’s external

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reviewer. QI represents that none of the laws to which it is subject prohibits disclosure of the identity of any account holder or account information to QI’s external reviewer. QI may rely on the documentation it obtains under this section 5 as the basis for the information it provides to another withholding agent under section 6 of this Agreement, as well as to determine its own withholding, tax, and reporting obligations.

(C) QI that is a QDD. If QI is acting as a QDD, QI is required to apply the rules of this section 5 to each account holder of an account for which it is acting as a QDD and to which it makes a reportable payment or a payment of a qualifying dividend equivalent offsetting payment (notwithstanding the limitation in section 2.70(B) of this Agreement) in accordance with the applicable requirements in section 5.01(A) and (B) of this Agreement.

Sec. 5.02. Documentation for Foreign Account Holders. QI may treat an account holder as a foreign beneficial owner of an amount if the account holder provides a valid Form W-8 (other than Form W-8IMY unless provided by a QI that is acting as a QDD or assuming primary withholding responsibility for a substitute interest payment) or valid documentary evidence, as described in section 2.20 of this Agreement, that supports the account holder’s status as a foreign person. QI may not treat an account holder that provides documentation indicating that it is a bank, broker, intermediary, or agent (such as an attorney) as a beneficial owner unless QI receives a statement, in writing and signed by a person with authority to sign such a statement, stating that such account holder is the beneficial owner of the income. Further, QI may not reduce the rate of withholding with respect to an indirect account holder that is a foreign beneficial owner unless the certification provided by the direct account holder is a valid Form W-8IMY, and then only to the extent that QI can reliably associate the payment with valid documentation that establishes the indirect account holder’s entitlement to a reduced rate of withholding under chapter 3 and establishes that withholding does not apply under chapter 4 in the case of a withholdable payment made to the account holder.

See section 5.13(B) of this Agreement for rules regarding reliable association with documentation.

Sec. 5.03. Beneficial Owner’s Claim of Treaty Benefits. To the extent an account holder receives a payment that is not subject to withholding under chapter 4, QI may not reduce the rate of withholding under chapter 3 based on a beneficial owner’s claim of treaty benefits unless QI obtains the documentation required by section 5.03(A) of this Agreement. In addition, QI agrees to establish procedures to inform account holders of the terms of limitation on benefits provisions of a treaty (whether or not those provisions are contained in a separate article entitled Limitation on Benefits) under which the account holder is claiming benefits. For accounts held by an entity opened or documented on or after January 1, 2017, QI is required to obtain a Form W-8BEN-E with the appropriate limitation on benefits certification or, if QI is allowed to and obtains documentary evidence, the written certification accompanying the treaty statement as described in section 5.03(B) of this Agreement. For accounts maintained by QI prior to January 1, 2017 that were documented with documentary evidence and for which treaty

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benefits are being claimed, QI is required to obtain the appropriate limitation on benefits statement prior to January 1, 2019.

(A) Treaty Documentation. The documentation required by this section 5.03(A) is as follows:

(1) The account holder has provided a properly completed Form W-8BEN or Form W- 8BEN-E on which a claim of treaty benefits is made, including for an entity the appropriate limitation on benefits and section 894 certifications, as provided in §1.1441- 6(b)(1). A U.S. TIN or foreign TIN shall not be required, however, if the beneficial owner is a direct account holder. An indirect account holder is required to have a either a U.S. TIN or foreign TIN to claim treaty benefits unless it is claiming treaty benefits on income from marketable securities;

(2) The account holder has provided documentary evidence that has been obtained pursuant to the know-your-customer rules that apply to the account holder and the account holder, if it is an entity, has made the treaty statement (if applicable) required by section 5.03(B) of this Agreement; or

(3) The account holder provides the type of documentary evidence required under §1.1441-6 to establish entitlement to a reduced rate of withholding under a treaty and the account holder, if it is an entity, has made the treaty statement (if applicable) required by section 5.03(B) of this Agreement.

(B) Treaty Statement. The treaty statement required by an entity account holder under this section 5.03(B) is as follows:
[Name of entity account holder] meets all provisions of the applicable treaty that are necessary to claim a reduced rate of withholding, including any limitation on benefits provisions, and derives the income within the meaning of section 894, and the regulations thereunder, as the beneficial owner.

The treaty statement must also include a written certification that the entity meets the appropriate limitation on benefits certification as described on Form W-8BEN-E and its accompanying instructions and that specifies the category of the limitation on benefits provision that the entity meets. QI is only required to obtain the treaty statement required by this section 5.03(B) from an account holder that is an entity. QI shall not be required to obtain a treaty statement required by this section 5.03(B) from an individual who is a resident of an applicable treaty country or from the government, or its political subdivisions, of a treaty country.

Sec. 5.04. Documentation for International Organizations. To the extent an account holder receives a payment that is not subject to withholding under chapter 4, QI may not treat the account holder as an international organization entitled to an exemption from withholding under section 892 unless the name provided on the documentation (including a Form W-8EXP) is the name of an entity designated as an international

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organization by executive order pursuant to 22 United States Code 288 through 288(f) and the documentation is valid under section 5.10 of this Agreement. If an international organization is not claiming benefits under section 892 but under another Code exception, the provisions of section 5.02 of this Agreement shall apply rather than the provisions of this section 5.04.

Sec. 5.05. Documentation for Foreign Governments and Foreign Central Banks of Issue.

(A) Documentation From a Foreign Government or Foreign Central Bank of Issue Claiming an Exemption From Withholding Under Section 892 or Section 895. To the extent an account holder receives a payment that is not subject to withholding under chapter 4, QI may not treat an account holder as a foreign government or foreign central bank of issue exempt from withholding under section 892 or 895 unless–

(1) QI receives from the account holder a Form W-8EXP or documentary evidence establishing that the account holder is a foreign government or foreign central bank of issue;

(2) The income paid to the account holder is the type of income that qualifies for an exemption from withholding under section 892 or 895; and

(3) QI does not know, or have reason to know, that the account holder is a controlled commercial entity as described in section 892, that the income owned by the foreign government or foreign central bank of issue is being received from a controlled commercial entity, or that the income is from the disposition of an interest in a controlled commercial entity.

(B) Treaty Exemption. To the extent an account holder receives a payment that is not subject to withholding under chapter 4, QI may treat an account holder as a foreign government or foreign central bank of issue entitled to a reduced rate of withholding under an income tax treaty for purposes of chapter 3 if it has valid documentation that is sufficient to obtain a reduced rate of withholding under a treaty as described in section 5.03 of this Agreement.

(C) Other Code Exception. If a foreign government or foreign central bank of issue is not claiming benefits under section 892 or under an income tax treaty but under another Code exception (e.g., the portfolio interest exception under section 871(h) or 881(c)), the provisions of section 5.02 of this Agreement apply rather than the provisions of this section 5.05.

Sec. 5.06. Documentation for Foreign Tax-Exempt Organizations. To the extent an account holder receives a payment that is not subject to withholding under chapter 4, QI may not treat an account holder as a foreign tax-exempt organization and reduce the rate of or exempt the account holder from withholding for purposes of chapter 3 unless it

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satisfies the requirements provided in section 5.06(A), (B), or (C) of this Agreement.

(A) Reduced Rate of Withholding Under Section 501. QI may not treat an account holder as a foreign organization described under section 501(c), and therefore exempt from withholding under chapter 3 (or, if the account holder is a foreign private foundation, subject to withholding at a 4-percent rate under section 1443(b)) unless QI obtains a valid Form W-8EXP on which Part IV of the form is completed.

(B) Reduced Rate of Withholding Under Treaty. QI may not treat an account holder as a foreign organization that is tax-exempt on an item of income pursuant to an income tax treaty unless QI obtains valid documentation as described under section 5.03 of this Agreement that is sufficient for obtaining a reduced rate of withholding under the treaty and the documentation establishes that the account holder is an organization exempt from tax under the treaty on that item of income.

(C) Other Exceptions. If a tax-exempt entity is not claiming a reduced rate of withholding because it is a foreign organization described under section 501(c) or under a treaty article that applies to exempt certain foreign organizations from tax, but is claiming a reduced rate of withholding under another Code or income tax treaty exception, the provisions of section 5.02 or 5.03 (as applicable) of this Agreement shall apply rather than the provisions of this section 5.06.

Sec. 5.07. Documentation from Intermediaries or Flow-Through Entities. QI must apply the presumption rules to a reportable payment made to a nonqualified intermediary or flow-through entity that is a direct account holder of QI to the extent QI fails to obtain the documentation set forth below. If QI receives documentation for the account holders or interest holders of an intermediary or flow-through entity, as described in this section 5.07, QI must apply the rules of this section 5 to determine the validity of such documentation.

(A) Withholdable Payments Made to Nonqualified Intermediaries and Flow- Through Entities. With respect to a withholdable payment made to a nonqualified intermediary or flow-through entity—

(1) QI receives a valid Form W-8IMY provided by the nonqualified intermediary or the flow-through entity receiving the payment that establishes the chapter 4 status of the intermediary or flow-through entity; and

(2) If the payment is not subject to withholding under chapter 4 based on such entity’s chapter 4 status (or to the extent the payment is received on behalf of exempt beneficial owners), QI can reliably associate the payment, within the meaning of section 5.13(B) of this Agreement, with a withholding statement that meets the requirements of §1.1471- 3(c)(iii)(B) that includes the account holders or interest holders of the intermediary or flow-through entity in chapter 4 withholding rate pools to the extent permitted or with valid documentation described in this section 5 provided by account holders or interest

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holders of the intermediary or flow-through entity that are not themselves nonqualified intermediaries or flow-through entities and that QI can treat as not subject to withholding under chapter 4.

(B) Reportable Payments Other than Withholdable Payments Made to Nonqualified Intermediaries and Flow-Through Entities. With respect to a reportable payment that is not a withholdable payment made to a nonqualified intermediary or flow-through entity (other than a withholding foreign partnership or withholding foreign trust)—

(1) QI receives a valid Form W-8IMY provided by the nonqualified intermediary or the flow-through entity regardless of whether the form includes a chapter 4 status of the nonqualified intermediary or flow-through entity unless such entity provides a withholding statement allocating a payment to a chapter 4 withholding rate pool of U.S. payees; and

(2) QI can reliably associate the payment, within the meaning of section 5.13(B) of this Agreement, with a chapter 4 withholding rate pool of U.S. payees or valid documentation described in this section 5 provided by account holders or interest holders of the nonqualified intermediary or flow-through entity that are not themselves nonqualified intermediaries or flow-through entities.

(C) Reportable Payments Made to Qualified Intermediaries and Withholding Foreign Partnerships and Withholding Foreign Trusts. With respect to a reportable payment made to a qualified intermediary, a withholding foreign partnership, or a withholding foreign trust, QI receives a valid Form W-8IMY provided by the qualified intermediary, withholding foreign partnership, or withholding foreign trust that includes the entity’s chapter 4 status for a payment that is a withholdable payment and, for those payments for which a qualified intermediary has not assumed primary chapters 3 and 4 withholding responsibility or primary Form 1099 reporting and backup withholding responsibility, QI can reliably associate the payment with withholding rate pools, as described in section 6.03 of this Agreement.

(D) Payments Made to Qualified Intermediaries Acting as QDDs. For payments with respect to potential section 871(m) transactions or underlying securities made to a qualified intermediary acting as a QDD, if QI receives a valid Form W-8IMY provided by the qualified intermediary acting as a QDD that includes the qualified intermediary’s chapter 4 status and the required certification that the qualified intermediary is acting as a QDD and assumes primary withholding responsibility for such payments, then QI can reliably associate the payments as made to the qualified intermediary acting as a QDD.

(E) Private Arrangement Intermediaries. If QI has an agreement with a PAI (see section 4.01 of this Agreement), QI obtains from the PAI a Form W-8IMY completed as if the PAI were a QI that is an FFI (with the exception that the PAI must not provide a QI-EIN on the Form W-8IMY) and QI can reliably associate the payment with a

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withholding statement, as described in section 4.01(G) of this Agreement and the information described in this section 5.07 for any account holders of the PAI that are intermediaries or flow-through entities and the documentation for any passive NFFE with one or more substantial U.S. owners (or one or more controlling persons that is a specified U.S. person if QI is a reporting Model 1 or reporting Model 2 FFI).

(F) Partnership or Trusts to which QI Applies the Agency Option. If QI has an agreement with a partnership or trust under which the partnership or trust agrees to act as an agent of QI (see section 4.06 of this Agreement), QI obtains from the partnership or trust a Form W-8IMY completed as if the partnership or trust were a QI (with the exception that the partnership or trust must not provide a QI-EIN on the Form W-8IMY) and QI can reliably associate the payment with a withholding statement, as described in section 4.06(B)(1) of this Agreement and the information described in this section 5.07 for any account holders that are intermediaries or flow-through entities and the documentation for any passive NFFE with one or more substantial U.S. owners (or one or more controlling persons that is a specified U.S. person if QI is a reporting Model 1 or reporting Model 2 FFI).

Sec. 5.08. Documentation for U.S. Exempt Recipients. QI shall not treat an account holder as a U.S. exempt recipient unless QI obtains from the account holder–

(A) A valid Form W-9 on which the account holder includes an exempt payee code to certify that the account holder is a U.S. exempt recipient for purposes of chapter 4 reporting;

(B) Documentary evidence that is sufficient to establish that the account holder is a U.S. exempt recipient; or

(C) Documentary evidence that is sufficient to establish the account holder’s status as a U.S. person and QI can treat the person as an exempt recipient under the rules of §§1.6045-2(b)(2)(i) or 1.6049-4(c)(1)(ii), as appropriate, without obtaining documentation.

Sec. 5.09. Documentation for U.S. Non-Exempt Recipients. QI shall not treat an account holder as a U.S. non-exempt recipient unless QI obtains a valid Form W-9 from the account holder, QI knows an account holder is a U.S. non-exempt recipient, or QI must presume a person is a U.S. non-exempt recipient to the extent required under section 5.13(C)(3) or (4) of this Agreement.

Sec. 5.10. Documentation Validity.

(A) In General. QI may not rely on documentation if QI has actual knowledge, or reason to know as described in section 5.10(B) or 5.10(C) of this Agreement, that there is a change in circumstances with respect to the information or statements contained in the documentation or account information that affects the reliability of the account

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holder’s claim. See §1.1441-1(e)(4)(ii)(D) for the definition of change in circumstances for chapter 3 purposes. A change in circumstances affecting withholding information, including allocation information or withholding rate pools contained in a withholding statement, will also cause the documentation provided with respect to that information to no longer be reliable. Once QI knows, or has reason to know, that documentation provided by an account holder is unreliable or incorrect to establish foreign status or residency for purposes of claiming benefits under an applicable income tax treaty, it can no longer reliably associate a payment with valid documentation unless QI obtains the additional documentation described in this section 5.10. With respect to a beneficial owner claiming benefits under an applicable income tax treaty, QI cannot rely on the account holder’s claim of which limitation on benefits provision it satisfies if QI has actual knowledge that such claim is incorrect. QI will be considered to have reason to know that a claim for treaty benefits is unreliable or incorrect if the documentation provided by the account holder claims benefits under a treaty that does not exist or is not in force (i.e., if the country is not included on the list maintained at https://www.irs.gov/businesses/international-businesses/united-states-income-tax- treaties-a-to-z). The rule in the preceding sentence will apply to pre-existing accounts for which QI held valid documentation upon a change in circumstances or, with respect to a pre-existing entity account, when it provides a written limitation on benefits statement (as described in section 5.03(B) of this Agreement). For all new accounts, this rule will apply on account opening. For purposes of this section 5.10(A), a “pre- existing account” or “pre-existing entity account” is an account documented by QI prior to January 1, 2017, for a QI with a QI Agreement in effect prior to that date. For a QI that did not have a QI Agreement in effect prior to January 1, 2017, a “pre-existing account” or “pre-existing entity account” means an account maintained (and for which QI has valid documentation) prior to the effective date of its QI Agreement.

In addition, if QI becomes aware of information resulting in the documentation no longer being reliable or correct and QI has not assumed primary withholding responsibility under chapters 3 and 4, QI agrees that it will promptly provide a withholding agent with corrected information (e.g., corrected withholding rate pools, corrected Forms W-9, or corrected U.S. TINs) within 30 days after QI knows or has reason to know that the documentation upon which it has relied is unreliable or incorrect. If QI receives notification from the IRS that documentation provided by an account holder is unreliable or incorrect (e.g., that the U.S. TIN provided by an account holder is incorrect), QI shall follow the procedures set forth in §31.3406(d)-5. See also QI’s FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI or an NFFE’s requirements as a withholding agent under sections 1471 and 1472 following a change in circumstances.

(B) Reason to Know-Direct Account Holders. If QI is a financial institution as defined in §1.1471-5(e), an insurance company (without regard to whether such company is a specified insurance company), or a broker or dealer in securities, QI shall be considered to have reason to know that documentation provided by a direct account holder is unreliable or incorrect only if one or more of the circumstances described in this section

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5.10(B) applies. If an account holder has provided documentation that is unreliable or incorrect under the rules of this section 5.10(B), QI must request new documentation. Notwithstanding the preceding sentence, QI may rely on the documentation originally provided if the rules of this section 5.10(B) permit such reliance and QI obtains the additional statements and documentation described in this section 5.10(B). If QI is an NFFE that is required to collect Forms W-8, see §1.1441-7(b)(2) for when QI shall be considered to have reason to know that a withholding certificate provided by a direct account holder is unreliable or incorrect.

(1) General Rules.

(i) QI shall not rely on a Form W-9 if it is not permitted to do so under the rules of §31.3406(h)-3(e) and shall not rely on a Form W-8 if it is not permitted to do so under the rules of §1.1441-7(b)(4) through (6) except as otherwise provided in this section 5.10(B).

(ii) QI shall not treat documentary evidence provided by an account holder as valid if the documentary evidence does not reasonably establish the identity of the person presenting the documentary evidence. For example, documentary evidence is not valid if it is provided in person by an account holder that is a natural person and the photograph on the documentary evidence, if any, does not match the appearance of the person presenting the document.

(iii) QI may not rely on documentation to reduce the withholding rate that would otherwise apply if—

(a) The account holder’s documentation is incomplete or contains information that is inconsistent with the account holder’s claim;

(b) QI has other account information that is inconsistent with the account holder’s claim; or

(c) The documentation lacks the information necessary to establish entitlement to a reduced rate of withholding.

For example, if an account holder is an entity and provides documentary evidence to claim treaty benefits and the documentary evidence establishes the account holder’s status as a foreign person and a resident of a treaty country but fails to provide the treaty statement in section 5.03 of this Agreement, the documentary evidence does not establish the account holder’s entitlement to a reduced rate of withholding. However, for purposes of establishing an account holder’s status as a foreign person or residency under an income tax treaty, documentation shall be considered inconsistent only if it is unreliable or incorrect under the rules of section 5.10(B)(2) or (3) of this Agreement.

(2) Rules Regarding Establishment of Foreign Status.

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(i) QI shall not treat documentary evidence provided by an account holder before January 1, 2001, as valid for purposes of establishing an account holder’s status as a foreign person if QI has actual knowledge that the account holder is a U.S. person or if it has a current mailing or current residence address for the account holder in the United States.

(ii) QI shall not treat documentation provided by an account holder after December 31, 2000, as valid for purposes of establishing the account holder’s foreign status if QI classified the account holder as a U.S. person in its account information, or if it does not have a permanent residence address for the account holder. Further, QI shall not treat documentation provided with respect to an account as valid for purposes of establishing an account holder’s status as a foreign person if QI has a current mailing or permanent residence address (whether or not on the documentation) for the account holder in the United States, or if QI has a current telephone number for the person in the United States and has no telephone number for the person outside of the United States (except with respect to a preexisting obligation (as defined in §1.1441-1(c)(54)) to the extent the QI documented the foreign status of the account holder for purposes of chapter 3 or 61 before July 1, 2014). The limit on reason to know described in the preceding sentence with respect to a preexisting account documented before July 1, 2014, shall not apply, however, if QI is notified of a change in circumstances and as of the date of such notification QI shall not treat such documentation as valid for purposes of establishing the account holder’s foreign status.

If QI has classified the account holder as a U.S. person or has an address or sole telephone number for the account holder in the United States, QI may nevertheless treat an account holder that is an individual as a foreign person if QI–

(a) Has in its possession, or obtains, additional documentary evidence (which does not contain a U.S. address) supporting the claim of foreign status and a reasonable explanation in writing supporting the account holder’s foreign status (as defined in §1.1441-7(b)(12));

(b) Obtains a valid Form W-8, and the Form W-8 contains a permanent residence address outside the United States and a mailing address, if any, outside the United States (or if a mailing address is inside the United States, the account holder provides a reasonable explanation in writing supporting the account holder’s foreign status); or

(c) Has classified the account holder as a resident of the country in which the account is maintained; QI is required to report a payment made to the account holder annually on a tax information statement that is filed with the tax authority of the country in which the office that maintains the account is located as part of the country’s resident reporting requirements; and that country has a tax information exchange agreement or an income tax treaty in effect with the United States.

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If QI has classified the account holder as a U.S. person or has an address or sole telephone number for the account holder in the United States, QI may nevertheless treat an account holder that is an entity (other than a flow-through entity) as a foreign person if QI–

(d) Has in its possession, or obtains, documentary evidence that substantiates that the entity is actually organized or created under the laws of a foreign country;

(e) Obtains a valid Form W-8, and the Form W-8 contains a permanent residence outside the United States and a mailing address, if any, outside the United States (or if a mailing address is inside the United States, the account holder provides additional documentary evidence sufficient to establish the account holder’s foreign status); or

(f) Has classified the entity as a resident of the country where the account is maintained; QI is required to report a payment made to the account holder annually on a tax information statement filed with the tax authority of the country in which the office that maintains the account is located as part of the country’s resident reporting requirements; and that country has a tax information exchange agreement or an income tax treaty in effect with the United States.

(iii) With respect to an account other than a preexisting obligation (defined in §1.1441- 1(c)(54)) that QI has documented the foreign status of the account holder for purposes of chapter 3 or 61 before July 1, 2014, QI shall not treat documentation as valid for purposes of establishing an account holder’s status as a foreign person if it has, either on the documentary evidence or in its current customer account files, an unambiguous indication of place of birth for the individual in the United States. The limit on reason to know described in the preceding sentence with respect to a preexisting obligation documented before July 1, 2014, shall not apply, however, if QI either reviews documentation that contains a U.S. place of birth or is notified of a change in circumstances, and, as of the date of such review or notification, QI shall not treat such documentation as valid for purposes of establishing the account holder’s foreign status.

QI may nevertheless treat the account holder with a U.S. place of birth as a foreign person if QI—

(a) Has in its possession, or obtains, documentary evidence evidencing citizenship in a country other than the United States and obtains a copy of the individual’s Certificate of Loss of Nationality of the United States; or

(b) Obtains a valid Form W-8BEN that establishes the account holder’s foreign status, documentary evidence evidencing citizenship in a country other than the United States, and a reasonable written explanation of the account holder’s renunciation of U.S. citizenship or the reason the account holder did not obtain U.S. citizenship at birth.

(iv) QI shall not treat documentation as valid for purposes of establishing an account 73

holder’s status as a foreign person if the account holder has standing instructions directing QI to pay amounts from its account to an address or an account maintained in the United States. QI may treat documentation as valid for establishing foreign status even though the account holder has such standing instructions if the account holder provides a reasonable explanation in writing supporting the account holder’s foreign status (as defined in §1.1441-7(b)(12)) or has both a valid Form W-8 establishing foreign status and documentary evidence establishing foreign status.

(3) Rules for Establishing Residency Under an Income Tax Treaty.
(i) QI shall not treat an account holder as a resident under an income tax treaty if the permanent residence address on a Form W-8 is not in the applicable treaty country or if the account holder notifies QI of a new permanent residence address that is not in the treaty country. QI may, however, rely on the Form W-8 if the account holder provides a reasonable explanation for the permanent residence address outside the treaty country or if QI has in its possession, or obtains, documentary evidence that establishes the claim of residency in a treaty country.

(ii) QI shall not treat an account holder as a resident under an income tax treaty if the permanent residence address on a Form W-8 is in the applicable treaty country but the Form W-8 contains a mailing address outside the treaty country or QI has a current mailing address for the account holder outside the applicable treaty country in its account information. A mailing address that is a P.O. Box, in-care-of address, or address at a financial institution (if the financial institution is not a beneficial owner) shall not preclude QI from treating the account holder as a resident of an applicable treaty country if such address is in the applicable treaty country. If QI has a current mailing address for the account holder outside the applicable treaty country (whether or not contained on the Form W-8), QI may nevertheless treat the account holder as a resident of the applicable treaty country if QI–

(a) Has in its possession, or obtains, additional documentary evidence supporting the account holder’s claim of residence in the applicable treaty country (and the additional documentation does not contain an address outside the treaty country);

(b) Has in its possession, or obtains, documentary evidence that establishes that the account holder is an entity organized in a treaty country (or an entity managed and controlled in a treaty country, if the applicable treaty so requires);

(c) Knows that the address outside the applicable treaty country (other than a P.O. Box, or in-care-of address) for an entity that is a resident of the applicable treaty country is the address of a branch of such entity; or

(d) Obtains a written statement from the account holder that reasonably establishes entitlement to treaty benefits.

(iii) QI shall not treat documentary evidence as valid for purposes of establishing 74

residency in a treaty country if QI has a current mailing or current permanent residence address for the account holder (whether or not on the documentary evidence) that is outside of the applicable treaty country, or QI has no permanent residence address for the account holder. If QI has a current mailing or current permanent residence address for the account holder outside of the applicable treaty country, QI may nevertheless rely on the documentary evidence if QI–

(a) Has in its possession, or obtains, additional documentary evidence supporting the account holder’s claim of residence in the applicable treaty country (and the documentary evidence does not contain an address outside the applicable treaty country, a P.O. Box, an in-care-of address, or an address of a financial institution);

(b) Has in its possession, or obtains, documentary evidence that establishes that the account holder is an entity organized in a treaty country (or an entity managed and controlled in a treaty country, if the applicable treaty so requires); or

(c) Obtains a valid Form W-8 that contains a permanent residence address and a mailing address in the applicable treaty country.

(iv) QI shall not treat documentation as valid for purposes of establishing an account holder’s residence in an applicable treaty country if the account holder has standing instructions for QI to pay amounts from its account to an address or an account outside the treaty country unless the account holder provides a reasonable explanation in writing establishing the direct account holder’s residence in the applicable treaty country or a valid Form W-8 that contains a permanent residence address and a mailing address in the applicable treaty country, or, if the account holder initially provided a Form W-8, documentary evidence establishing the account holder’s residence in the applicable treaty country.

(C) Reason to Know-Indirect Account Holders. QI shall be considered to have reason to know that relevant information or statements contained in documentation provided by an indirect account holder is unreliable or incorrect if a reasonably prudent person in the position of a qualified intermediary would question the claims made. QI shall have reason to know that documentation provided by a nonqualified intermediary or a flow-through entity is unreliable or incorrect if the nonqualified intermediary or flow- through entity does not provide QI with, to the extent required, the names of the indirect account holders, their addresses, allocation information allocating payments to each indirect account holder, and sufficient information for QI to report payments on Forms 1042-S and 1099. In addition, QI shall have reason to believe that an indirect account holder is not entitled to a reduced rate of withholding under an income tax treaty if the nonqualified intermediary or flow-through entity has not provided sufficient information so that QI can verify that the indirect account holder has provided a U.S. TIN or foreign TIN, if required, and made the necessary statements regarding limitations on benefits provisions and deriving the income under section 894 and the regulations thereunder. See §1.1441-7(b)(10) and section 5.03 of this Agreement.

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Sec. 5.11. Documentation Validity Period.

(A) Documentation Other than Form W-9. QI may rely on valid documentary evidence obtained from account holders in accordance with applicable know-your- customer rules as long as the documentary evidence remains valid under those rules or until QI knows, or has reason to know, that the information contained in the documentary evidence is incorrect. QI may rely on the representations described in section 5.03 of this Agreement obtained in connection with such documentation for the same period of time as the documentation. For establishing an account holder’s chapter 3 status (as defined in §1.1441-1(c)(45)) or foreign status for chapter 61 purposes, QI may rely on a Form W-8 until its validity expires under §1.1441-1(e)(4)(ii) and may rely on documentary evidence (other than documentary evidence obtained pursuant to applicable know-your-customer rules) until its validity expires under §1.6049-5(c).

(B) Form W-9. QI may rely on a valid Form W-9 as long as it has not been informed by the IRS or another withholding agent that the form is unreliable or incorrect. If QI has primary Form 1099 reporting and backup withholding responsibility, it may rely on a Form W-9 unless one of the conditions of §31.3406(h)-3(e)(2)(i) through (v) apply.

Sec. 5.12. Maintenance and Retention of Documentation.

(A) Maintaining Documentation. QI shall maintain documentation by retaining the original documentation, a certified copy, a photocopy, a scanned copy, a microfiche, or other means that allow reproduction (provided that the QI has recorded receipt of the documentation and is able to produce a hard copy). For a direct account, if QI is not required to retain copies of documentary evidence under its know-your-customer rules, QI may instead retain a notation of the type of documentation reviewed, the date the documentation was reviewed, the document’s identification number (if any) (e.g., a passport number), and whether such documentation contained any U.S. indicia. For direct accounts opened prior to January 1, 2001, if QI was not required under its know- your-customer rules to maintain originals or copies of documentation, QI may rely on its account information if it has complied with all other aspects of its know-your-customer rules regarding establishment of an account holder’s identity, it has a record that the documentation required under the know-your-customer rules was actually examined by an employee of QI in accordance with the know-your-customer rules, and it has no information in its possession that would require QI to treat the documentation as invalid under the rules of section 5.10(B) of this Agreement.

(B) Retention Period. QI shall retain a record of the account holder’s documentation obtained under this section 5 for as long as the documentation is relevant to the determination of QI’s tax liability or reporting responsibilities under sections 871, 881, 1461, 1474(a), and 3406.

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Sec. 5.13. Application of Presumption Rules.

(A) In General. QI shall apply the presumption rules of section 5.13(C) of this Agreement if QI cannot reliably associate a payment with valid documentation from an account holder. The presumption rules cannot be used to grant a reduced rate of withholding. For example, the portfolio interest exception of sections 871(h) and 881(c) shall not apply to a person that is presumed to be foreign. Further, QI must apply the presumption rules when required and may not rely on its actual knowledge regarding an account holder’s chapter 4 status or status as a U.S. or foreign person to apply a reduced rate of withholding. Notwithstanding the preceding sentence, QI must rely on its actual knowledge regarding an account holder rather than what is presumed under section 5.13(C) of this Agreement if, based on such knowledge, it should withhold an amount greater than the withholding rate under the presumption rules or it should report on Form 1042-S or Form 1099 an amount that would otherwise not be reported. Failure to follow the presumption rules may result in liability for underwithholding, penalties, and interest.

(B) Reliably Associating a Payment with Documentation. A payment can be reliably associated with documentation if it is considered reliably associated with documentation under the rules of §1.1441-1(b)(2)(vii) and, for a withholdable payment, §1.1471-3(c). Generally, QI can reliably associate a payment with documentation if, for that payment, it holds valid documentation, as described in this section 5, from the account holder; it can reliably determine how much of the payment relates to the valid documentation provided by such account holder; and it has no actual knowledge or reason to know, under the requirements of section 5.10 of this Agreement, that any of the information, certifications, or statements in or associated with the documentation are incorrect. Sections 5.13(B)(1) through (5) of this Agreement describe when a payment is reliably associated with documentation if the payment is made to an account holder that is an intermediary or flow-through entity (other than a nonparticipating FFI that is not acting on behalf of exempt beneficial owners).

(1) Reliably Associating a Payment with Documentation Provided by a Nonqualified Intermediary or Flow-Through Entity. Generally, QI can reliably associate a payment with documentation provided by a nonqualified intermediary or flow-through entity if it can reliably associate the payment with a valid Form W-8IMY provided by the nonqualified intermediary or flow-through entity, and it can determine the portion of the payment that relates to valid documentation associated with the Form W-8IMY for an account holder or interest holder of the nonqualified intermediary or flow- through entity that is not itself a nonqualified intermediary or flow-through entity; and the nonqualified intermediary or flow-through entity provides sufficient information for QI to report the payments on Form 1042-S, Form 1099, or Form 8966 if reporting is required.

If the payment is a withholdable payment, the Form W-8IMY must provide the nonqualified intermediary’s or flow-through entity’s chapter 4 status to the extent required for chapter 4 purposes. In lieu of the nonqualified intermediary or flow-through

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entity providing documentation for an account holder that is subject to chapter 4 withholding, QI can reliably associate a withholdable payment with valid documentation associated with the Form W-8IMY from the nonqualified intermediary or flow-through entity if it can determine the portion of the payment allocable to a chapter 4 withholding rate pool (to the extent permissible under §1.1471-3(c)(3)(iii)(B)).

If the payment is a reportable amount, QI can reliably associate such payment with valid documentation provided by a nonqualified intermediary or a flow-through entity that is a participating FFI or registered deemed-compliant FFI if, in lieu of providing documentation for its account holders that are U.S. persons, such nonqualified intermediary or flow-through entity allocates the payment to a chapter 4 withholding rate pool of U.S. payees and also certifies on a valid Form W-8IMY that it meets the requirements of §1.6049-4(c)(4)(iii) with respect to any account holder of an account it maintains within the meaning of §1.1471-5(d)(5) (i.e., a direct account holder) that receives a payment included in this pool or allocates a payment that is a withholdable payment to a chapter 4 withholding rate pool of recalcitrant account holders.

Notwithstanding the preceding sentences in this section 5.13(B)(1), to the extent a payment is not subject to reporting on Form 1042-S, Form 1099, or Form 8966, QI can reliably associate the payment with valid documentation if it can determine the portion of the payment that is allocable to a group of documented account holders (other than nonqualified intermediaries or flow-through entities) for whom withholding and reporting is not required. For example, QI can treat a payment of short term OID allocable to a group of documented foreign account holders as reliably associated with valid documentation. Further, if the documentation attached to a nonqualified intermediary’s or flow-through entity’s Form W-8IMY is documentation from another nonqualified intermediary or flow-through entity, then QI must apply the rules of this paragraph to that other nonqualified intermediary or flow-through entity.

(2) Reliably Associating a Payment with a Withholding Certificate Provided by Another Qualified Intermediary that Does Not Assume Primary Chapters 3 and 4 Withholding or Primary Form 1099 Reporting and Backup Withholding Responsibility. Generally, QI can reliably associate a payment with documentation provided by another qualified intermediary that does not assume either primary chapters 3 and 4 withholding responsibility or primary Form 1099 reporting and backup withholding responsibility if it can reliably associate the payment with a valid Form W- 8IMY and, if the form is associated with a withholdable payment, it includes the qualified intermediary’s chapter 4 status to the extent required for chapter 4 purposes. Additionally, the Form W-8IMY must be associated with a withholding statement that allocates the withholdable payment among the chapter 4 withholding rate pools (to the extent permissible under §1.1471-3(c)(3)(iii)(B)), and with respect to a payment of an amount subject to chapter 3 withholding that is either not a withholdable payment or a withholdable payment for which no chapter 4 withholding is required, that allocates such payment among chapter 3 withholding rate pools for foreign account holders as described in section 6.03(C) of this Agreement.

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If the payment is a reportable amount, QI can reliably associate the payment with documentation provided by another qualified intermediary if the withholding statement allocates the payment to withholding rate pools attributable to U.S. non-exempt recipients and the documentation includes a valid Form W-9 for each U.S. non-exempt recipient account holder for which the other qualified intermediary is required to report on Form 1099 and, if required, backup withhold. QI can also reliably associate a reportable amount with valid documentation provided by another qualified intermediary that is a participating FFI or registered deemed-compliant FFI if, in lieu of providing documentation for each U.S. non-exempt recipient account holder, the qualified intermediary allocates the payment to a chapter 4 withholding rate pool of U.S. payees and provides the applicable certification(s) on a valid Form W-8IMY for allocating the payment to this pool or allocates a payment that is a withholdable payment to a chapter 4 withholding rate pool of recalcitrant account holders. Notwithstanding the preceding sentences in this section 5.13(B)(2), the presumption rules shall not apply if a payment cannot be allocated to each U.S. non-exempt recipient account holder or to a chapter 4 withholding rate pool of U.S. payees to the extent the alternative procedures of section 6.03(D) of this Agreement apply.

(3) Reliably Associating a Payment with Documentation Provided by a Qualified Intermediary that Assumes Primary Chapters 3 and 4 Withholding Responsibility and Does Not Assume Primary Form 1099 Reporting and Backup Withholding Responsibility. Generally, QI can reliably associate a payment with valid documentation provided by another qualified intermediary that assumes primary chapters 3 and 4 withholding responsibility, but not primary Form 1099 reporting and backup withholding responsibility, if it can associate the payment with a valid Form W- 8IMY from the qualified intermediary and, if the form is associated with a withholdable payment, it includes the qualified intermediary’s chapter 4 status to the extent required for chapter 4 purposes. Additionally, the Form W-8IMY must be associated with a withholding statement that allocates a payment that is a withholdable payment or an amount subject to chapter 3 withholding that is not a withholdable payment among a single withholding rate pool for all account holders with respect to which the qualified intermediary assumes primary chapters 3 and 4 withholding responsibility.

If the payment is a reportable amount, QI can reliably associate the payment with documentation provided by another qualified intermediary if the withholding statement allocates the payment to withholding rate pools attributable to each U.S. non-exempt recipient, as described in section 6.03(D), and the documentation includes a valid Form W-9 for each U.S. non-exempt recipient account holder for which the other qualified intermediary is required to report on Form 1099 and, if required, backup withhold. QI can also reliably associate such payment with valid documentation provided by another qualified intermediary that is a participating FFI or registered deemed-compliant FFI if, in lieu of providing documentation for each U.S. non-exempt recipient account holder, the qualified intermediary allocates the payment made to the U.S. non-exempt recipient to a chapter 4 withholding rate pool of U.S. payees and provides the applicable

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certifications on a valid Form W-8IMY for allocating the payment to this pool or allocates a payment that is a withholdable payment to a chapter 4 withholding rate pool of recalcitrant account holders. Notwithstanding the preceding sentences in this section 5.13(B)(3), the presumption rules shall not apply if a payment cannot be allocated to each U.S. non-exempt recipient account holder or to a chapter 4 withholding rate pool of U.S. payees to the extent the alternative procedures of section 6.03(D) of this Agreement apply.

(4) Reliably Associating a Payment With Documentation Provided by a Qualified Intermediary that Assumes Primary Form 1099 Reporting and Backup Withholding Responsibility. Generally, QI can reliably associate a payment with valid documentation provided by another qualified intermediary that assumes primary Form 1099 reporting and backup withholding responsibility, but not primary chapters 3 and 4 withholding responsibility, to the extent it can associate the payment with a valid Form W-8IMY from the qualified intermediary that, if the payment is a withholdable payment, includes the qualified intermediary’s chapter 4 status to the extent required for chapter 4 purposes. Additionally, the Form W-8IMY must be associated with a withholding statement that allocates a payment that is a withholdable payment among chapter 4 withholding rate pools (other than a pool of U.S. payees and to the extent permissible under §1.1471-3(c)(3)(iii)(B)) and, with respect to a payment that is an amount subject to chapter 3 withholding but is either not a withholdable payment or a withholdable payment for which no chapter 4 withholding is required, allocates the payment among chapter 3 withholding rate pools for foreign account holders as described in section 6.03(C) of this Agreement, and identifies the portion of the payment for which QI assumes primary Form 1099 reporting and backup withholding responsibility.

(5) Reliably Associating a Payment with Documentation Provided by a Qualified Intermediary that Assumes Both Primary Chapters 3 and 4 Withholding Responsibility and Primary Form 1099 Reporting and Backup Withholding Responsibility. Generally, QI can reliably associate a payment with valid documentation provided by another qualified intermediary that assumes both primary chapters 3 and 4 withholding responsibility and primary Form 1099 reporting and backup withholding responsibility if QI can associate the payment with a valid Form W- 8IMY from the qualified intermediary that, if the payment is a withholdable payment, includes the qualified intermediary’s chapter 4 status. Additionally, the Form W-8IMY must also designate the accounts for which the other qualified intermediary is acting as a qualified intermediary and is assuming primary chapters 3 and 4 withholding and primary Form 1099 reporting and backup withholding responsibility. If the other qualified intermediary is acting as a QDD, the Form W-8IMY (or withholding statement) must also designate those accounts for which the QDD is receiving payments with respect to potential section 871(m) transactions or underlying securities as a QDD. If the qualified intermediary receiving a payment assumes both primary chapters 3 and 4 withholding responsibility and primary Form 1099 reporting and backup withholding responsibility for substitute interest payments as described in section 3.03(A), the Form W-8IMY must indicate that the qualified intermediary is assuming primary withholding

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responsibility for all such payments.

(C) Presumption Rules. With respect to a withholdable payment made to a foreign entity, if QI is an NFFE, it must follow the presumption rules of §1.1471-3(f) when it cannot reliably associate a withholdable payment with valid documentation. If QI is an FFI, it must follow its FATCA requirements as a participating FFI, registered deemed- compliant FFI, or registered deemed-compliant Model 1 IGA FFI to determine the chapter 4 status of an account holder when it cannot reliably associate a withholdable payment with valid documentation.

With respect to a payment that is an amount subject to chapter 3 withholding that is either not a withholdable payment or a withholdable payment for which no chapter 4 withholding is required, the presumption rules are the rules under §1.1441-1(b)(3) that a withholding agent must follow to determine the status of a beneficial owner (i.e., as a U.S. person or foreign person and as an individual or entity (and the entity’s classification)) when it cannot reliably associate a payment with valid documentation. With respect to a reportable payment (including a withholdable payment made to an entity) that is not an amount subject to chapter 3 withholding, the presumption rules are the rules of §1.6049-5(d) that a payor must follow to determine the status of a payee (e.g., as a non-exempt recipient) when it cannot reliably associate a payment with valid documentation. The presumption rules are as follows:

(1) Certain Withholdable Payments Made with Respect to an Offshore Obligation.

A withholdable payment paid outside of the United States as defined under §1.6049- 5(e) with respect to an offshore obligation (as defined in §1.1471-1(b)(88)) that is made to an entity is presumed made to a nonparticipating FFI for purposes of chapter 4. A withholdable payment that is not an amount subject to chapter 3 withholding, that is paid outside the U.S. with respect to an offshore obligation, and that is treated as made to a payee that is an individual is presumed made to a U.S. person when the payee has any of the indicia of U.S. status that are described in section 5.10(B)(2) of this Agreement. If QI is a participating FFI or registered deemed-compliant FFI (other than a reporting Model 1 FFI), see the rules under its FATCA requirements as a participating FFI or registered deemed-compliant FFI for classifying account holders as recalcitrant account holders. If QI is an FFI, see also section 8.06 of this Agreement for whether QI is required to report such payments on Form 1099.

(2) Amounts Subject to Withholding under Chapter 3 that are Paid with Respect to an Offshore Obligation. An amount that is subject to chapter 3 withholding that is not a withholdable payment is presumed made to an undocumented foreign account holder if the payment is made outside of the United States with respect to an offshore obligation. If QI is an NFFE or an FFI that is not required to withhold on recalcitrant account holders pursuant to the terms of an applicable Model 1 or Model 2 IGA, an amount subject to chapter 3 withholding that is a withholdable payment and that is treated as made to a payee that is an individual is also presumed made to an undocumented foreign account holder if the payment is made outside of the United

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States with respect to an offshore obligation. QI must treat an amount described in this section 5.13(C)(2) as subject to withholding under chapter 3 at a rate of 30 percent on the gross amount of the payment and must report the payment as made to an unknown recipient on Form 1042-S.

(3) Payments on Certain Short-Term Obligations and Bank Deposit Interest. An amount of U.S. source original issue discount on the redemption of a short-term obligation or U.S. source bank deposit interest not subject to chapter 4 withholding is presumed made to an undocumented U.S. non-exempt recipient account holder regardless of whether paid to an individual or entity. QI must report an amount described in this section 5.13(C)(3) on Form 1099. QI must backup withhold at 28 percent3 and report such amounts on Form 1099 unless it provides sufficient information to another payor from which it receives such amounts to backup withhold and report the payments and QI does not know that the other payor has failed to backup withhold or report.

(4) Foreign Source Income, Broker Proceeds, and Certain Other Amounts Made with Respect to an Offshore Obligation. A payment of an amount that is not a withholdable payment and is not an amount subject to chapter 3 withholding (other than payments of short-term OID and bank deposit interest described in section 5.13(C) of this Agreement) that is paid outside the United States with respect to an offshore obligation and that is made to a payee that is an individual is presumed made to a U.S. non-exempt recipient when the payee has any of the indicia of U.S. status that are described in section 5.10(B) of this Agreement. If the payment is made to a payee that is an entity, QI must apply the principles of §1.1441-1(b)(3)(ii), §1.1441-5(d)(2), or §1.1441-5(e)(6) (as applicable) without regard to §1.1441-1(b)(3)(ii)(D) for purposes of this paragraph 5.13(C)(4). For a payment of gross proceeds for which QI is a broker under §1.6045-1, similar rules apply to a payment made with respect to a sale that is effected at an office outside the United States under §1.6045-1(g)(1)(ii). QI must report an amount described in this section 5.13(C)(3) as paid to a presumed U.S. non-exempt recipient on Form 1099 to the extent required under section 8.06 of this Agreement. Backup withholding shall not be required, however, if the exception provided in §31.3406(g)-1(e) applies.

(5) Other Payments. For any payment not covered in sections 5.13(C)(1), (2), (3), or (4) of this Agreement, see the presumption rules provided in §1.1441-1(b)(3) or §1.6049-5(d)(2) (as applicable).

SECTION 6. QUALIFIED INTERMEDIARY WITHHOLDING CERTIFICATE AND

3 See section 3406(a) providing that the current applicable rate of backup withholding is the fourth lowest rate of tax applicable under section 1(c).

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DISCLOSURE OF ACCOUNT HOLDERS TO WITHHOLDING AGENT

Sec. 6.01. Qualified Intermediary Withholding Certificate. QI agrees to furnish a qualified intermediary withholding certificate to each withholding agent from which it receives a reportable amount as a qualified intermediary. The qualified intermediary withholding certificate is a Form W-8IMY (or acceptable substitute form) that certifies that QI is acting as a qualified intermediary, contains QI’s QI-EIN, and provides all other information required by the form. If QI is acting as a QDD for payments with respect to potential section 871(m) transactions or underlying securities, it must certify that it is acting as a QDD and assumes primary chapters 3 and 4 withholding responsibility and primary Form 1099 reporting and backup withholding responsibility for payments with respect to potential section 871(m) transactions that it makes as a principal, and it must provide all other information required by Form W-8IMY with respect to the certification, including its QI-EIN. If QI is acting with respect to payments of substitute interest as described in section 3.03(A) of this Agreement, it must certify that it is assuming primary chapters 3 and 4 withholding responsibility and primary Form 1099 reporting and backup withholding responsibility for all such payments, in addition to the other certifications it makes and information it provides as a qualified intermediary. If QI receives a withholdable payment, QI must certify to its chapter 4 status, provide its GIIN (if applicable), and provide the other information and certifications required on the form. QI must also certify its chapter 4 status as a participating FFI or registered deemed- compliant FFI when QI provides a Form W-8IMY that certifies that it meets the requirements of §1.6049-4(c)(4)(iii) with respect to any account holder of an account it maintains that is included in a chapter 4 withholding rate pool of U.S. payees on QI’s withholding statement.

Except as otherwise provided in section 6.02 of this Agreement, QI also agrees to furnish each withholding agent to whom it provides a Form W-8IMY with the withholding statement described in section 6.02 of this Agreement. QI is not required to disclose, as part of its Form W-8IMY or its withholding statement, any information regarding the identity of a direct or indirect account holder that is a foreign person, or a U.S. exempt recipient or a holder of a U.S. account. To the extent QI does not assume primary Form 1099 reporting and backup withholding responsibility under section 3.04 of this Agreement or is not excepted from reporting under section 8.06 of this Agreement, for each U.S. non-exempt recipient account holder on whose behalf QI receives a reportable amount, QI must provide to a withholding agent the Form W-9, or if any such account holder has not provided a Form W-9, the name, address, and U.S. TIN (if available).

Sec. 6.02. Withholding Statement.
(A) In General. QI agrees to provide to each withholding agent from which QI receives reportable amounts as a qualified intermediary a written statement (withholding statement) described in this section 6.02. A withholding statement shall not be provided to a withholding agent if QI assumes both primary chapters 3 and 4 withholding responsibility and primary Form 1099 reporting and backup withholding responsibility for

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all of its accounts. For example, if QI is only acting as a QDD, it does not have to provide a withholding statement . QI may act as a QDD only with respect to payments made and received as a principal with respect to potential section 871(m) transactions and underlying securities. The withholding statement forms an integral part of the Form W-8IMY. The withholding statement may be provided in any manner, and in any form, to which QI and the withholding agent mutually agree. For example, QI and the withholding agent may agree to establish a procedure to furnish withholding statement information electronically provided that the procedure meets the requirements of §1.1441-1(e)(3)(iv). In addition, QI and the withholding agent must be capable of providing upon request a hard copy of all withholding statements provided by QI. The withholding statement shall be updated as often as necessary for the withholding agent to meet its reporting and withholding obligations under chapters 3, 4, and 61 and section 3406.

(B) Content of Withholding Statement. The withholding statement must contain sufficient information for a withholding agent to apply the correct rate of withholding on payments allocable to the accounts identified on the statement and to properly report such payments on Forms 1042-S and Forms 1099, as applicable. The withholding statement must–

(1) Designate those accounts for which QI acts as a qualified intermediary;

(2) Designate those accounts for which QI assumes primary chapters 3 and 4 withholding responsibility or primary Form 1099 reporting and backup withholding responsibility (including accounts for which QI is acting with respect to payments of U.S. source substitute interest (as described in section 3.03(A) of this Agreement));

(3) If applicable, designate the accounts for which QI is acting as a QDD; and
(4) Provide information regarding withholding rate pools, as described in section 6.03 of

this Agreement.

Sec. 6.03. Chapters 3 and 4 Withholding Rate Pools.
(A) In General. QI shall provide as part of its withholding statement withholding rate pool information in a manner sufficient for the withholding agent to meet its chapters 3 and 4 and backup withholding responsibilities and its Form 1042-S and Form 1099 reporting responsibilities.

(B) Chapter 4 Withholding Rate Pools. If QI receives a withholdable payment on behalf of its account holders, QI may allocate the payment to a chapter 4 withholding rate pool. A chapter 4 withholding rate pool is a payment of a single type of income (e.g., interest or dividends) that is allocated to payees that are nonparticipating FFIs. If QI is a participating FFI or registered deemed-compliant FFI (other than reporting Model 1 FFI), it may also allocate a witholdable payment to a chapter 4 withholding rate pool of

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recalcitrant account holders (if applicable). If QI is a participating FFI or registered deemed-compliant FFI receiving a reportable amount that is excepted from reporting under section 8.06(A) of this Agreement (excluding sections 8.06(A)(2) and (A)(3) of this Agreement when the payment is subject to chapter 4 withholding and section 8.06(A)(4) of this Agreement), QI may allocate the payment to a chapter 4 withholding rate pool of U.S. payees. See section 6.03(D) of this Agreement for the alternative procedures that may be used in this case. Except as otherwise provided in this section 6.03(B), if QI receives a withholdable payment, QI must provide the information required under §1.1471-3(c)(3)(iii)(B)(2).

Further, if QI elects under its FATCA requirements as a participating FFI or registered deemed-compliant FFI to backup withhold instead of withholding under chapter 4 with respect to certain recalcitrant account holders, QI’s withholding statement must indicate the portion of such payment subject to backup withholding under section 3406 that is allocated to such account holders and must provide all other information relating to such account holders that is required under chapter 61 for the withholding agent to report with respect to the payment.

If QI has an account holder that is another intermediary (whether a qualified intermediary, a nonqualified intermediary, or a private arrangement intermediary) or a flow-through entity, QI may combine the account holder information provided by the intermediary or flow-through entity with QI’s direct account holder information to determine the amounts allocable to each of QI’s chapter 4 withholding rate pools described in this section 6.03(B). If QI is an NFFE that has an account holder that is another intermediary or flow-through entity that is a participating FFI or registered deemed-compliant FFI, QI may provide the account holder’s chapter 4 withholding rate pools of recalcitrant account holders and U.S. payees to the extent applicable.

(C) Chapter 3 Withholding Rate Pools. With respect to any portion of the payment that is attributable to payees for which no chapter 4 withholding is required but is an amount subject to chapter 3 withholding, a chapter 3 withholding rate pool is a payment of a single type of income that is subject to a single rate of withholding (e.g., 0%, 10%, 15%, or 30%) and that is reported under a single chapter 4 exemption code on Form 1042-S. QI shall determine chapter 3 withholding rate pools based on valid documentation obtained under section 5 of this Agreement or, if a payment cannot be reliably associated with valid documentation, on the presumption rules of section 5.13(C) of this Agreement. If QI has an account holder that is another intermediary (whether a qualified intermediary, a nonqualified intermediary, or a private arrangement intermediary) or a flow-through entity (other than a nonparticipating FFI that is not acting on behalf of any exempt beneficial owners), QI may combine the account holder information provided by the intermediary or flow-through entity with QI’s direct account holder information to determine the amounts allocable to each of QI’s chapter 3 withholding rate pools with respect to the portion of the payment allocable to an account holder to which chapter 4 withholding does not apply.

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(D) U.S. Non-Exempt Recipients Subject to Backup Withholding or Form 1099 Reporting and Alternative Procedures for Allocating Payments on Withholding Statements. To the extent QI does not assume primary Form 1099 reporting and backup withholding responsibility and is not excepted from reporting on Form 1099 under section 8.04 of this Agreement, QI’s withholding statement must establish a separate withholding rate pool for each U.S. non-exempt recipient account holder that QI is required to report on Form 1099 and has disclosed to the withholding agent. QI may, by mutual agreement with the withholding agent, establish a single withholding rate pool (not subject to backup withholding) for all U.S. non-exempt recipient account holders for whom QI is required to report on Form 1099 and has provided Forms W-9 prior to the withholding agent paying any reportable amounts or, if applicable, designated broker proceeds to which backup withholding does not apply. QI must establish a separate withholding rate pool for all U.S. non-exempt recipient account holders subject to backup withholding prior to the withholding agent paying any reportable amounts or, if applicable, designated broker proceeds.

Alternatively, QI may include U.S. non-exempt recipients in a zero rate withholding pool that includes U.S. exempt recipients and foreign persons for which no withholding is required under chapters 3 and 4 and section 3406 and may include payments allocated to a chapter 4 withholding rate pool of U.S. payees in this pool to the extent permitted to be provided by QI under section 6.03(B) of this Agreement. If QI chooses the alternative procedure of this paragraph, QI must provide sufficient information to the withholding agent no later than January 15 of the year following the year in which the reportable amounts and designated broker proceeds, if applicable, are paid in order to allocate to each U.S. non-exempt recipient account holder or to a chapter 4 withholding rate pool of U.S. payees (when applicable). Failure to provide such information will result in the application of penalties to QI under sections 6721 and 6722 and shall constitute an event of default under section 11.06 of this Agreement.

SECTION 7. TAX RETURN OBLIGATIONS

Sec. 7.01. Form 1042 Filing Requirement.
(A) In general. QI shall file a return on Form 1042, whether or not QI withheld any amounts under chapter 3 or 4, on or before March 15 of the year following any calendar year in which QI acts as a qualified intermediary and makes a payment of an amount subject to chapter 3 or 4 withholding when acting as a qualified intermediary under this Agreement. A separate Form 1042 must be filed by each legal entity that is a qualified intermediary covered by this Agreement. Form 1042 shall be filed at the address indicated on the form, at the address at which the IRS notifies QI to file the return under the provisions of section 12.06 of this Agreement, or in accordance with the instructions to file Form 1042 electronically. In addition to the information specifically requested on Form 1042 and the accompanying instructions, if QI made any overwithholding or underwithholding adjustments under §§1.1461-2 and 1.1474-2 and sections 9.02 and 9.05 of this Agreement, QI must attach a statement setting forth the amounts of any overwithholding or underwithholding adjustments and an explanation of the

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circumstances that resulted in the over- or underwithholding.

(B) Extensions for Filing Returns. QI may request an extension of the time for filing Form 1042, or any of the information required to be attached to the form, by submitting Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns, on or before the due date of the return.

(C) QDD Tax Liability Requirements for QDDs. In addition to its requirements under section 7.01(A) of this Agreement, a QI that is acting as a QDD (other than a foreign branch of a U.S. financial institution) also must report on Form 1042 its QDD tax liability, including separately identifying each part of the QDD tax liability described in section 3.09(A) through (C) of this Agreement. For its section 871(m) amount, a QDD is also required to separately report the amount of dividends on underlying securities associated with potential section 871(m) amounts and dividend equivalent payments it received in its dealer capacity and the amount of dividend equivalent payments and qualifying dividend equivalent offsetting payments that it makes or is contractually obligated to make in its dealer capacity. A QDD must also report any other information required by Form 1042 with respect to its QDD tax liability (including any part thereof).

A QDD must also maintain, and make available to the IRS upon request, a reconciliation schedule that tracks across calendar years the section 871(m) amount for each dividend with respect to each underlying security associated with potential section 871(m) transactions or underlying security referenced by a potential section 871(m) transaction. The reconciliation schedule must separately state total amounts received as a QDD, as well as the dividends, dividend equivalents, and qualifying dividend equivalent offsetting payments for each dividend with respect to each underlying security associated with potential section 871(m) transactions, each dividend that is not with respect to an underlying security associated with potential section 871(m) transactions, or each dividend with respect to each underlying security referenced by a potential section 871(m) transaction received as a QDD or payments that the QDD makes or is contractually obligated to make, and any adjustments thereto, separated by payments made as a dealer and as a non-dealer. The reconciliation schedule may be maintained in any manner or format that permits the IRS to reconcile the amount reported by the QDD for the calendar year.

Sec. 7.02. Form 945 Filing Requirement. QI shall file a return on Form 945 on or before January 31 following the calendar year in which QI backup withheld an amount under section 3406. Separate Forms 945 must be filed by each legal entity that is a qualified intermediary covered by this Agreement. The form must be filed at the address specified in the instructions for Form 945, at the address at which the IRS notifies QI to file the return under the provisions of section 12.06 of this Agreement, or in accordance with the instructions to file Form 945 electronically.

Sec. 7.03. Retention of Returns. QI shall retain Forms 945 and 1042 (including, with respect to QI acting as a QDD, its reconciliation schedule) for the applicable statute of

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limitations on assessment under section 6501.

SECTION 8. INFORMATION REPORTING OBLIGATIONS

Sec. 8.01. Form 1042-S Reporting. Except as otherwise provided in section 8.02 of this Agreement, QI is not required to file Forms 1042-S for amounts paid to each separate account holder for whom such reporting would otherwise be required. Instead, QI shall file a Form 1042-S reporting the pools of income (reporting pools) as determined in section 8.03 of this Agreement. QI must file its Forms 1042-S in the manner required by the regulations under chapters 3 and 4 (or in the case of a participating FFI, in the manner required under the FFI Agreement) and the instructions to the form, including any requirement to file the forms magnetically or electronically. Separate Forms 1042-S must be filed by each legal entity that is a qualified intermediary covered by this Agreement. Each QI covered by this Agreement may, however, allow its individual branches to file Forms 1042-S provided that all Forms 1042-S contain the QI-EIN of the legal entity of which the branch forms a part and (to the extent required for chapter 4 purposes) the GIIN of the branch. Any Form 1042-S required by this section 8 shall be filed on or before March 15 following the calendar year in which the payment reported on the form was made. QI may request an extension of time to file Forms 1042-S by submitting Form 8809, Application for Extension of Time to File Information Returns, by the due date of Forms 1042-S in the manner required by (and extent permitted on) Form 8809.

Sec. 8.02. Recipient Specific Reporting. QI (whether or not it assumes primary chapters 3 and 4 withholding responsibility) is required to file separate Forms 1042-S for amounts paid to each separate account holder as described in this section 8.02. QI must file separate Forms 1042-S by income code, exemption code, recipient code, chapter 3 or 4 withholding rate pool, and withholding rate.

(A) QI must file a separate Form 1042-S for each account holder that is a qualified intermediary, to the extent such payment is required to be reported under §1.1461-1, withholding foreign partnership, or withholding foreign trust that receives from QI an amount subject to withholding under chapter 3 or 4, regardless of whether such account holder is a direct or indirect account holder of QI.

(B) QI must file a separate Form 1042-S for each account holder that is a nonqualified intermediary or flow-through entity that is a participating FFI, registered deemed- compliant FFI, or registered deemed-compliant Model 1 IGA FFI and that receives an amount subject to chapter 4 withholding from QI that is allocable to each of such FFI’s chapter 4 withholding rate pools of recalcitrant account holders, nonparticipating FFIs, and pool of U.S. payees, if applicable, regardless of whether such FFI is a direct or indirect account holder of QI.

(C) QI must file a separate Form 1042-S for each account holder that is a nonqualified intermediary or flow-through entity that is not described in section 8.02(B) of this

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Agreement (other than a nonparticipating FFI) that receives from QI an amount subject to chapter 4 withholding allocable to such entity’s chapter 4 withholding rate pool of payees that are nonparticipating FFIs, regardless of whether such intermediary or flow- through entity is a direct or indirect account holder of QI.

(D) QI must file a separate Form 1042-S for each account holder of QI that is a PAI or a partnership or trust to which QI applies the agency option that receives from QI an amount subject to chapter 4 withholding allocable to such entity’s chapter 4 withholding rate pool of payees that are nonparticipating FFIs or an amount subject to chapter 3 withholding that is either not a withholdable payment or a withholdable payment for which no chapter 4 withholding is required and that is allocable to such entity’s chapter 3 withholding rate pools.

(E) QI must file a separate Form 1042-S for each account holder of QI that is a partnership or trust to which QI applies the joint account option that receives from QI an amount subject to chapter 3 withholding and is allocable to such entity’s chapter 3 withholding rate pools.

(F) QI must file a separate Form 1042-S for each unknown recipient with respect to an account holder that is a nonqualified intermediary, flow-through entity, or qualified intermediary that does not assume primary chapters 3 and 4 withholding responsibility and that receives an amount subject to chapter 4 withholding from QI that QI must presume is allocable to such entity’s chapter 4 withholding rate pool of payees that are nonparticipating FFIs under the presumption rule of §1.1471-3(f)(5).

(G) QI must file a separate Form 1042-S for each foreign account holder (or interest holder) of a nonqualified intermediary or flow-through entity that is a nonparticipating FFI that is receiving a payment on behalf of an exempt beneficial owner (regardless of whether the nonqualified intermediary or flow-through entity is a direct or indirect account holder of QI) to the extent QI can reliably associate such amounts with valid documentation from such nonqualified intermediary or flow-through entity as to the payment allocable to one or more exempt beneficial owners. In addition, QI must file separate Forms 1042-S in the same manner for each foreign account holder (or interest holder) of a nonqualified intermediary or flow-through entity that is described in the preceding sentence and that is a direct or indirect account holder (or interest holder) of a PAI of QI or a partnership or trust to which QI applies the agency option.

(H) QI must file separate Forms 1042-S for each foreign account holder (or interest holder) of a nonqualified intermediary or flow-through entity that is receiving an amount subject to chapter 3 withholding that is either not a withholdable payment or a withholdable payment for which no chapter 4 withholding is required to the extent QI can reliably associate such amounts with valid documentation from an account holder that is not itself a nonqualified intermediary or flow-through entity. In addition, QI must file separate Forms 1042-S in the same manner for each foreign account holder (or interest holder) of a nonqualified intermediary or flow-through entity that is described in

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the preceding sentence and that is a direct or indirect account holder (or interest holder) of a PAI of QI or a partnership or trust to which QI applies the agency option.

(I) QI must file a separate Form 1042-S for each direct account holder that establishes its status as a passive NFFE but fails to provide the information regarding its owners as required under §1.1471-3(d)(12)(iii) unless such information was reported by the withholding agent.

(J) If QI is acting as a QDD, QI must file a separate Form 1042-S for any amount subject to chapter 3 withholding with respect to a potential section 871(m) transaction made to another QDD.

Sec. 8.03. Reporting Pools for Form 1042-S Reporting.

(A) Chapter 4 Reporting Pools. Except for amounts required to be reported under section 8.02 of this Agreement, if QI is an FFI, QI shall report all amounts subject to chapter 4 withholding by reporting pools on a Form 1042-S if those amounts are paid to direct account holders of QI. A separate Form 1042-S shall be filed for each type of reporting pool. A chapter 4 reporting pool is a payment of a single type of income (e.g., interest, dividends), determined in accordance with the categories of income reported on Form 1042-S, that is allocable to a chapter 4 withholding rate pool consisting of either recalcitrant account holders or payees that are nonparticipating FFIs. QI must report recalcitrant account holders in pools based upon a recalcitrant account holder’s particular status described in §1.1471-4(d)(6), with a separate Form 1042-S issued for each such pool.

If QI is an FFI, it may report in a chapter 4 withholding rate pool of U.S. payees an account holder that is (or is presumed) a U.S. person and that QI reports as a U.S. account under its applicable FATCA requirements as a participating FFI or registered deemed-compliant FFI provided that QI is excepted from Form 1099 reporting with respect to the payment under section 8.06(A)(1) of this Agreement or section 8.06(A)(2) and (A)(3) of this Agreement if the payment is both excepted from Form 1099 reporting and not subject to withholding under chapter 4.

If QI is an NFFE, QI shall report all amounts subject to chapter 4 withholding by reporting pools on a Form 1042-S if those amounts are paid to direct account holders that are nonparticipating FFIs in a chapter 4 reporting pool of nonparticipating FFIs.

(B) Chapter 3 Reporting Pools. Except for amounts required to be reported under section 8.02 of this Agreement, QI shall report an amount subject to chapter 3 withholding that is either not a withholdable payment or a withholdable payment for which no chapter 4 withholding is required and that is paid to a foreign account holder by reporting pools on a Form 1042-S if those amounts are paid to direct account holders of QI or to direct account holders of a PAI of QI or a partnership or trust described in section 4 of this Agreement. A separate Form 1042-S shall be filed for each type of

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reporting pool. A chapter 3 reporting pool is a payment of a single type of income that falls within a particular withholding rate, chapter 3 exemption code, and, if the payment is a withholdable payment, chapter 4 exemption code as determined on Form 1042-S. QI may use a single chapter 3 pool reporting code (e.g., QI- withholding rate pool- general) for all reporting pools except for amounts paid to foreign tax-exempt recipients, for which a separate chapter 3 pool reporting code (e.g., QI- withholding rate pool- exempt organization) must be used. For this purpose, a foreign tax-exempt recipient includes any organization that is not subject to chapter 3 withholding and is not liable to tax in its jurisdiction of residence because it is a charitable organization, a pension fund, or a foreign government.

(C) Qualifying Dividend Equivalent Offsetting Payment Reporting Pools. In addition to the reporting required under sections 8.02 and 8.03 of this Agreement for dividend equivalents that are amounts subject to chapter 3 or 4 withholding, a QI acting as a QDD shall report on separate Forms 1042-S (as required by the form and its accompanying instructions) the amount of the qualifying dividend equivalent offsetting payments that represent (a) payments made to U.S. persons that would be dividend equivalent payments if made to foreign persons and (b) the effectively connected income (described in section 2.70(A)(2) of this Agreement). For purposes of determining when a qualifying dividend equivalent offsetting payment is made, apply the timing rule in §1.1441-2(e)(4) (substituting “qualifying dividend equivalent offsetting payment” for “dividends” and “dividend payment date” for “payment date” in the first sentence).

A QI acting as a QDD must also provide, upon request by the IRS, the name, address, and TIN of any U.S. non-exempt recipient to whom the QI acting as a QDD makes a qualifying dividend equivalent offsetting payment described in section 2.70(A)(1) and shall require such person to waive any prohibition on disclosure of such information to the IRS. If a QI acting as a QDD does not obtain a waiver or collect and maintain such information for any U.S. non-exempt recipient described in the preceding sentence, any payment made to such person is not a qualifying dividend equivalent offsetting payment. A QI acting as a QDD shall report those payments made to U.S. non-exempt recipients that are not qualifying dividend equivalent offsetting payments in a pool on a separate Form 1042-S (as required by the form and its accompanying instructions).

Sec. 8.04. FATCA U.S. Account Reporting.

(A) QI that is an FFI. If QI is an FFI, QI is required to report each U.S. account (or, in the case of an FFI that is a reporting Model 1 FFI or a registered deemed-compliant Model 1 IGA FFI, each U.S. reportable account) that it maintains and for whom QI is acting consistent with its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI. See QI’s FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI to report each account that is a U.S. account (or U.S. reportable account) that it maintains. If QI is a participating FFI or

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registered deemed-compliant FFI (other than a reporting Model 1 FFI or registered deemed-compliant Model 1 IGA FFI), QI must report its U.S. accounts on Form 8966, FATCA Report, in the time and manner required under its FATCA requirements as a participating FFI or registered deemed-compliant FFI except to the extent QI is reporting under §1.1471-4(d)(5) on Form 1099 with respect to its U.S. accounts. If QI is a reporting Model 1 FFI or registered deemed-compliant Model 1 IGA FFI, QI must report each U.S. reportable account on Form 8966 as required under the applicable Model 1 IGA. QI cannot delegate to its withholding agent its requirements to report U.S. accounts (or U.S. reportable accounts) under its applicable FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI (regardless of whether QI does or does not assume primary Form 1099 reporting and backup withholding responsibility under section 3 of this Agreement). See section 8.06 of this Agreement for when the reporting described in this section 8.04 satisfies QI’s Form 1099 reporting responsibilities with respect to reportable payments under chapter 61.

(B) QI that is an NFFE. If QI is an NFFE acting as a qualified intermediary on behalf of its shareholders, QI shall file Forms 8966 to report information about any substantial U.S. owners of QI. QI must report on Form 8966 to the extent required of a direct reporting NFFE in the time and manner provided in the instructions to the form. Such report must include the name, address, and U.S. TIN of each substantial U.S. owner of QI; the total of all payments made to each substantial U.S. owner (including gross amounts paid or credited to the substantial U.S. owner with respect to such owner’s equity interest in the QI during the calendar year, which includes payments in redemption or liquidation (in whole or in part) of the substantial U.S. owner’s equity interest in QI); and any other information as required by the form and its accompanying instructions.

If QI is an NFFE acting as a qualified intermediary on behalf of persons other than its shareholders, QI shall file Form 8966 to report withholdable payments made to an account holder that is an NFFE (other than an excepted NFFE) with one or more substantial U.S. owners if the NFFE is the beneficial owner of the withholdable payment received by QI. See §1.1471-1(b)(8) for the definition of beneficial owner. QI must report on Form 8966 in accordance with the form and its accompanying instructions. Such report must include the name of the NFFE that is owned by a substantial U.S. owner; the name, address, and U.S. TIN of each substantial U.S. owner; the total of all withholdable payments made to the NFFE during the calendar year; and any other information as required by the form and its accompanying instructions. If QI is acting as a sponsoring entity on behalf of an NFFE for chapter 4 purposes, QI is not required to report as described in this paragraph if QI reports the NFFE as part of QI’s requirements as a sponsoring entity. See section 1.1472-1(c)(5)(ii) for the reporting requirements of a sponsoring entity.

Sec. 8.05. Form 8966 Reporting for Payees that are NFFEs. QI shall file Form 8966 to report withholdable payments made to an intermediary or flow-through entity that

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provides information regarding an account holder (or interest holder) that is an NFFE other than an excepted NFFE with one or more substantial U.S. owners (or one or more controlling persons that is a specified U.S. person under an applicable IGA). QI must report on Form 8966 in the time and manner provided in §1.1474-1(i)(2). Such report must include the name of the NFFE that is owned by a substantial U.S. owner (or controlling person); the name, address, and U.S. TIN of each substantial U.S. owner; the total of all withholdable payments made to the NFFE during the calendar year (or reportable period under the applicable IGA); and any other information as required by the form and its accompanying instructions. QI is not required to report, however, if such information is reported pursuant to section 8.04 of this Agreement or if the intermediary or flow-through entity certifies on its withholding statement that it is reporting the account holder (or interest holder) as a U.S. account pursuant to its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI.

Sec. 8.06. Form 1099 Reporting Responsibility. QI shall file Forms 1099 and, unless filing magnetically, Form 1096, Annual Summary and Transmittal of U.S. Information Returns, for reportable payments made to persons described in this section 8.06. Forms 1099 shall be filed on or before the date prescribed for the particular Form 1099 under chapter 61 and in the manner required by regulations under chapter 61 and the instructions to the forms (including the requirements for filing the forms magnetically or electronically). Extensions of the time to file Forms 1099 may be requested by submitting Form 8809 in the manner required by the form. If QI is required to file Forms 1099, it must file the appropriate form for the type of income paid (e.g., Form 1099-DIV for dividends, Form 1099-INT for interest, Form 1099-B for broker proceeds). QI must file Forms 1099 to report a reportable payment other than in the situations listed in sections 8.06(A) and (B) of this Agreement.

(A) Reportable Amount. QI must file a Form 1099 in accordance with the instructions to the form for the aggregate amount of a particular type of reportable amount paid to an account holder that is (or is presumed) a U.S. non-exempt recipient (whether a direct or indirect account holder). However, QI is not required to file a Form 1099 on a reportable amount if–

(1) QI is a non-U.S. payor reporting the account holder of a U.S. account under its FATCA requirements as a participating FFI or registered deemed-compliant FFI (including a reporting Model 1 FFI) and the other conditions of §1.6049-4(c)(4)(i) are satisfied;

(2) QI reports the account holder’s account as held by a recalcitrant account holder or, in the case of a QI that is a reporting Model 2 FFI or nonreporting Model 2 FFI treated as registered deemed-compliant, as a non-consenting account under its FATCA requirements as a participating FFI or registered deemed-compliant FFI and the other conditions of §1.6049-4(c)(4)(ii) are satisfied;

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(3) QI is a non-U.S. payor that is a reporting Model 1 FFI or registered deemed- compliant Model 1 IGA FFI and determines that the account has U.S. indicia for which appropriate documentation sufficient to treat the account as held by a specified U.S. person has not been provided and reports the account as a U.S. reportable account and the other conditions of §1.6049-4(c)(4)(ii) are satisfied;

(4) QI has not assumed primary Form 1099 reporting and backup withholding responsibility with respect to the account holder’s account and has provided a Form W- 9 to a withholding agent or has provided withholding rate pool information with respect to such account holder to a withholding agent to apply backup withholding and QI does not know that the withholding agent has failed to report or backup withhold as required;

(5) With respect to an account holder of an intermediary or flow-through entity (other than a qualified intermediary) that is a direct or indirect account holder of QI, the intermediary or flow-through entity allocates the payment to a chapter 4 withholding rate pool of U.S. payees and provides a Form W-8IMY containing a certification that the entity meets the requirements of §1.6049-4(c)(4)(iii); or

(6) With respect to an account holder of another qualified intermediary that is a direct or indirect account holder of QI, the qualified intermediary allocates the payment to a chapter 4 withholding rate pool of U.S. payees and provides the applicable certification on a valid Form W-8IMY for allocating the payment to this pool.

(B) Reportable Payments other than Reportable Amounts. QI must file a Form 1099 for a reportable payment (other than a reportable amount) paid to each U.S. non- exempt recipient (whether a direct or indirect account holder), or to any account holder that is presumed to be a U.S. non-exempt recipient under section 5.13(C) of this Agreement. Notwithstanding the previous sentence, QI is not required to file a Form 1099 for a reportable payment (other than a reportable amount) paid to a direct account holder that is (or is presumed) a U.S. non-exempt recipient if—

(1) QI is a non-U.S. payor reporting the account holder of a U.S. account under its FATCA requirements as a participating FFI or registered deemed-compliant FFI (including a reporting Model 1 FFI) and the other conditions of §1.6049-4(c)(4)(i) are satisfied;

(2) QI reports the account holder’s account as held by a recalcitrant account holder or, in the case of a QI that is a reporting Model 2 FFI or nonreporting Model 2 FFI treated as registered deemed-compliant, as a non-consenting account under its FATCA requirements as a participating FFI or registered deemed-compliant FFI and the other conditions of §1.6049-4(c)(4)(ii) are satisfied;

(3) QI is a non-U.S. payor that is a reporting Model 1 FFI or registered deemed- compliant Model 1 IGA FFI and determines that the account has U.S. indicia for which appropriate documentation sufficient to treat the account as held by a specified U.S.

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person has not been provided and reports the account as a U.S. reportable account and the other conditions of §1.6049-4(c)(4)(ii) are satisfied; or

(4) With respect to a reportable payment that is broker proceeds paid to a U.S. non- exempt recipient, QI has applied the procedures of section 3.05(C) of this Agreement and QI does not know that the other payor has failed to report or backup withhold on the payment as required.

SECTION 9. ADJUSTMENTS FOR OVER- AND UNDER- WITHHOLDING; REFUNDS Sec. 9.01. Adjustments for Overwithholding by Withholding Agent When QI Does Not Assume Primary Withholding Responsibility. QI may request that a withholding agent make an adjustment for amounts paid to QI when the withholding agent has overwithheld under chapter 3 or 4 by applying either the reimbursement procedure described in section 9.01(A) of this Agreement or the set-off procedure described in section 9.01(B) of this Agreement within the time period prescribed for those procedures. Nothing in this section shall be interpreted to require a withholding agent to apply the reimbursement or set off procedures under sections 9.01(A) or (B) of this Agreement. See §1.1474-2(a)(2) for the definition of overwithholding that applies for purposes of this section 9 with respect to an amount withheld under chapter 4.

(A) Reimbursement Procedure. QI may request a withholding agent to repay QI for any amount overwithheld and for the withholding agent to reimburse itself under the reimbursement procedures described in §§1.1461-2(a)(2)(i) and 1.1474-2(a)(3) by making the request before the earlier of the due date (without regard to extensions) for the withholding agent to file Form 1042 and Form 1042-S for the calendar year of overwithholding or the date the Form 1042-S is actually filed with the IRS.

(B) Set-off Procedure. QI may request a withholding agent to repay QI by applying the amount overwithheld against any amount which otherwise would be required to be withheld under chapter 3 or 4 from income paid by the withholding agent to QI under the set-off procedures of §§1.1461-2(a)(3) and 1.1474-2(a)(4). QI must make the request before the earlier of the due date (without regard to extensions) for the withholding agent to file Form 1042-S for the calendar year of overwithholding or the date that the Form 1042-S is actually filed with the IRS.

Sec. 9.02. Adjustments for Overwithholding by QI Assuming Primary Withholding Responsibility. QI may make an adjustment for amounts paid to its account holders when QI has overwithheld by applying either the reimbursement or set-off procedures described in this section 9.02 within the time period prescribed for those procedures.

(A) Reimbursement Procedure. QI may repay its account holders for an amount overwithheld under chapter 3 or 4 and reimburse itself by reducing, by the amount of tax actually repaid to the account holders, the amount of any subsequent deposit of tax required to be made by QI under section 3.08 of this Agreement. For purposes of this section 9.02(A), an amount that is overwithheld shall be applied in order of time (i.e.,

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sequentially) to each of the QI’s subsequent deposit periods in the same calendar year to the extent that the withholding taxes required to be deposited for a subsequent deposit period exceed the amount actually deposited. An amount overwithheld in a calendar year may be applied to deposit periods in the calendar year following the calendar year of overwithholding only if:

(1) The repayment occurs before the earlier of the due date (without regard to extensions) for filing Form 1042-S for the calendar year of overwithholding or the date that the Form 1042-S is actually filed by QI with the IRS;

(2) QI states on a Form 1042-S (issued, if applicable, to the account holder or otherwise to a chapter 3 or 4 reporting pool), filed by March 15 of the calendar year following the calendar year of overwithholding, the amount of tax withheld and the amount of any actual repayments; and

(3) QI states on a Form 1042, filed by March 15 of the calendar year following the calendar year of overwithholding, that the filing of the Form 1042 constitutes a claim for credit in accordance with §1.6414-1.

(B) Set-Off Procedure. QI may repay its account holders by applying the amount overwithheld against any amount which otherwise would be required under chapter 3 or 4 to be withheld from a payment made by QI to the account holders before the earlier of March 15 of the calendar year following the calendar year of overwithholding or the date that the Form 1042-S is actually filed with the IRS. For purposes of making a return on Form 1042 or 1042-S for the calendar year of overwithholding, and for purposes of making a deposit of the amount withheld, the reduced amount shall be considered the amount required to be withheld from such income under chapter 3 or 4.

Sec. 9.03. Repayment of Backup Withholding. If QI erroneously withholds, as defined under §31.6413(a)-3, an amount under section 3406 from an account holder, QI may refund the amount erroneously withheld as provided in §31.6413(a)-3.

Sec. 9.04. Collective Credit or Refund Procedures for Overwithholding. If there has been overwithholding on amounts subject to chapter 3 or 4 withholding paid to QI’s account holders during a calendar year and the amount has not been recovered under the reimbursement or set-off procedures as described in section 9.01 or 9.02 of this Agreement, QI may request a credit or refund of the total amount overwithheld by following the procedures of this section 9.04. QI shall follow the procedures set forth under sections 6402 and 6414, and the regulations thereunder, to claim the credit or refund. No credit or refund will be allowed after the expiration of the statutory period of limitation for refunds under section 6511. If there has been an overwithholding and QI does not apply for a collective refund, it must provide a Form 1042-S for the payment that was subject to the overwithholding if requested by the account holder receiving the payment.

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(A) Payments for which a Collective Refund is Permitted. Except as otherwise provided in this section 9.04, QI may use the collective refund procedures with respect to all amounts subject to chapters 3 and 4 withholding. With respect to amounts withheld under chapter 3 or 4, QI shall not include in its collective refund claim tax withheld on payments made to an indirect account holder or a direct account holder of QI that is a nonqualified intermediary or flow-through entity, and with respect to amounts withheld under chapter 4, if QI is a participating FFI or registered deemed-compliant FFI, QI shall not include in its collective refund claim tax withheld on payments made to any account holder described in the FFI agreement or in §1.1471-4(h)(2).

(B) Requirements for Collective Refund. QI may use the collective refund procedures under this section 9.04 only if the following conditions are met:

(1) QI must not have issued Forms 1042-S to the account holders that received the payment that was subject to overwithholding;

(2) QI must submit together with its amended Form 1042 on which it provides a reconciliation of amounts withheld and claims a credit or refund, a copy of the Form 1042-S furnished to QI by its withholding agent reporting the taxes withheld to which the claim relates (if applicable) and a statement that includes the following information and representations—

(i) The reason(s) for the overwithholding;

(ii) QI deposited the tax for which a refund is being sought under section 6302 or received a Form 1042-S from its withholding agent showing the amount of tax withheld, and neither QI nor its withholding agent has applied the reimbursement or set-off procedure of §§1.1461-2 and 1.1474-2 to adjust the tax withheld to which the claim relates;

(iii) QI has repaid or will repay the amount for which refund is sought to the appropriate account holders;

(iv) QI retains a record showing the total amount of tax withheld, credits from other withholding agents, tax assumed by QI, adjustments for underwithholding, and reimbursements for overwithholding as its relates to each account holder and also showing the repayment (if applicable) to such account holders for the amount of tax for which a refund is being sought;

(v) QI retains valid documentation that meets the requirements of chapter 3 or 4 (as applicable) to substantiate the amount of overwithholding with respect to each account holder for which the refund is being sought; and

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(vi) QI has not issued and will not issue a Form 1042-S (or such other form as the IRS may prescribe) to any account holder with respect to the payments for which the refund is being sought.

Sec. 9.05. Adjustments for Underwithholding. If QI knows that an amount should have been withheld under chapter 3 or 4 from a previous payment made to an account holder but was not withheld, QI may either withhold from future payments made pursuant to chapter 3 or chapter 4 to the same account holder or payee or satisfy the tax from property that it holds in custody for such person or property over which it has control. The additional withholding or satisfaction of the tax owed described in the previous sentence must be made before the due date (not including extensions) of the Form 1042 for the calendar year in which the underwithholding occurred. QI’s responsibilities under this section 9.05 will be met if it informs a withholding agent from which it received the payment of the underwithholding and the withholding agent satisfies the underwithholding.

Sec. 9.06. Underwithholding After Form 1042 Filed. If, after a Form 1042 has been filed for a calendar year, QI, QI’s reviewer, or the IRS determines that QI has underwithheld tax for such year, QI shall file an amended Form 1042 to report and pay the underwithheld tax. QI shall pay the underwithheld tax, the interest due on the underwithheld tax, and any applicable penalties at the time of filing the amended Form 1042. If QI fails to file an amended return, the IRS shall make such return under section 6020 and assess such tax under the procedures set forth in the Code.

SECTION 10. COMPLIANCE PROCEDURES Sec. 10.01.

(A) In General. QI is required to adopt a compliance program under the authority of a responsible officer or, if QI adopts a consolidated compliance program, under the authority of a responsible officer of a Compliance QI (as described in section 10.02(B) of this Agreement). QI’s compliance program must include policies, procedures, and processes sufficient for QI to satisfy the documentation, reporting, and withholding requirements of this Agreement and sufficient for a responsible officer of QI (or Compliance QI) to make the certifications required under section 10.03 of this Agreement. If QI is acting as a QDD, QI’s compliance program must also include policies, procedures, and processes sufficient for it to satisfy and report its QDD tax liability and other reporting required as a condition of its status as a QDD. QI must also perform or arrange for the performance of a periodic review described in section 10.04 of this Agreement to the extent required by that section. As part of the responsible officer’s certification, QI must provide to the IRS the factual information referenced in sections 10.04 and 10.05 of this Agreement and in Appendix I to this Agreement. QI must also satisfy the requirements of section 10.06 of this Agreement with respect to the report covering the periodic review, and must comply with the IRS review described in section 10.08 of this Agreement. With respect to QI that, prior to January 1, 2017,

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was a limited FFI (as defined in §1.1471-1(b)(77) (or a limited branch, as defined in §1.1471-1(b)(76)), references in this section 10 (and in Appendix I to this Agreement) to QI’s FATCA Requirements as a Participating FFI, Registered Deemed-Compliant FFI, or Registered Deemed-Compliant Model 1 IGA FFI include its requirements under §1.1471-4(e)(4) for purposes of its initial certification period.

(B) Coordination with FATCA Requirements as a Participating FFI, Registered Deemed-Compliant FFI, or Registered Deemed-Compliant Model 1 IGA FFI and, for a Direct Reporting NFFE, the Requirements of §1.1472-1(c)(3). As a condition for maintaining QI status, QI must comply with its FATCA requirements as applicable to its chapter 4 status (including any applicable compliance procedure) with respect to each branch of QI operating under this Agreement. Therefore, QI must, as part of the compliance procedures described in this section 10 (including in conducting the periodic review described in section 10.04 of this Agreement and in making the periodic certification described in section 10.03 of this Agreement) determine whether it is compliant with its FATCA requirements as a participating FFI, registered deemed- compliant FFI, or registered deemed-compliant Model 1 IGA FFI and, in the case of a direct reporting NFFE, its requirements under §1.1472-1(c)(3), with respect to accounts for which it acts as a qualified intermediary. See the compliance procedures, if any, applicable to QI’s FATCA requirements as a participating FFI, registered deemed- compliant FFI, or registered deemed-compliant Model 1 IGA FFI and, in the case of a direct reporting NFFE with respect to all accounts that it maintains or all of its shareholders. If QI is a participating FFI or direct reporting NFFE, QI will be able to make the certification described in section 10.03 of this Agreement, and the certification described in the FFI Agreement, to the extent provided in future published guidance or other instructions.

10.02. Responsible Officer. QI must appoint an individual as a responsible officer as defined in section 2.78 of this Agreement. The responsible officer must be identified on the FATCA registration website as QI’s responsible party, and such person may, but is not required to, be the same responsible officer for purposes of compliance with QI’s FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI and, in the case of a direct reporting NFFE, its requirements under §1.1472-1(c)(3). The responsible officer (or the responsible officer’s designee) must establish a compliance program that meets the requirements of this section 10.02 and must make the periodic certifications to the IRS described in section 10.03 of this Agreement. The responsible officer of QI must be an officer of QI with sufficient authority to fulfill the duties of a responsible officer described in this section 10. The responsible officer (or a delegate appointed by the responsible officer) must also serve as the point of contact for the IRS for all issues related to this Agreement and for complying with IRS requests for information or additional review procedures under section 10.07 of this Agreement.

(A) Compliance Program. The responsible officer (or the responsible officer’s designee) must establish a program for QI to comply with the requirements of this

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Agreement that includes the following–

(1) Written Policies and Procedures. The responsible officer (or designee) must ensure the drafting and updating, as necessary, of written policies and procedures sufficient for QI to satisfy the documentation, withholding, reporting, and other obligations of this Agreement, including, with respect to QI that is acting as a QDD, its QDD tax liability. Such written policies and procedures must include a process for employees of QI to raise issues to the responsible officer (or the responsible officer’s designee) that concern QI’s compliance with this Agreement.

(2) Training. The responsible officer (or designee) must communicate such policies and procedures to any line of business of QI that is responsible for obtaining, reviewing, and retaining a record of documentation under the requirements of section 5 of this Agreement; making payments subject to withholding under section 3 of this Agreement; reporting payments and accounts as required under sections 7 and 8 of this Agreement; or entering into potential section 871(m) transactions in the case of QI that is acting as a QDD.

(3) Systems. The responsible officer (or designee) must ensure that systems and processes are in place that will allow QI to fulfill its obligations under this Agreement. For example, in order to fulfill QI’s obligations to report on Forms 1042-S, 1099, and 8966 under section 8 of this Agreement, QI must establish systems for documenting account holders and for recording the information with respect to each such account that QI is required to report under that section.

(4) Monitoring of Business Changes. The responsible officer (or designee) must monitor business practices and arrangements that affect QI’s compliance with this Agreement, including, for example, QI’s acquisition of lines of businesses or accounts that give rise to documentation, withholding, or reporting obligations under this Agreement.

(5) QDD Tax Liability Determinations. If QI is acting as a QDD, the responsible officer must ensure that the QDD has appropriate systems in place to make the necessary determinations and calculations to identify section 871(m) transactions, potential section 871(m) transactions, underlying securities associated with potential section 871(m) transactions, the amount of dividend or dividend equivalent payments received, and the amount of dividend equivalent or qualifying dividend equivalent offsetting payments made and contractually obligated to be made by the QDD, as well as whether a transaction is as a principal or non-principal and in a dealer or non-dealer capacity. This includes appropriate systems to, where required, calculate the delta for a potential section 871(m) transaction, perform the substantial equivalence test described in §1.871-15(h), calculate the amount of a dividend equivalent or qualifying dividend equivalent offsetting payment, determine any QDD tax liability amount (or part thereof) and its timing, and determine what payments are received, made, or contractually obligated to be made with respect to potential section 871(m) transactions, underlying

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securities associated with potential section 871(m) transactions, and other underlying securities as a principal and whether in its dealer capacity or non-dealer capacity. The systems must also take into account information received pursuant to §1.871-15(p).

(6) Periodic Review. Unless QI receives a waiver (the requirements of which are described in section 10.07(B) of this Agreement), the responsible officer (or designee) must designate a reviewer that meets the qualifications described in section 10.04(A) of this Agreement to perform the periodic review as described in section 10.05 of this Agreement, to the extent required by that section.

(7) Certification of Internal Controls. The responsible officer (or designee) must make the periodic certification as described in section 10.03 of this Agreement, including ensuring that corrective actions are taken in response to any material failures (as defined in section 10.03(D) of this Agreement) of QI’s compliance with this Agreement and its FATCA requirements as a participating FFI, registered deemed- compliant FFI, or registered deemed-compliant Model 1 IGA FFI and, in the case of a direct reporting NFFE, its requirements under §1.1472-1(c)(3). The responsible officer may rely on any reasonable procedure, process, or review that enables the responsible officer to make the certification described in this section 10.03.

(B) Consolidated Compliance Program. The IRS, in its discretion, may permit a consolidated compliance program that includes two or more QIs that are members of a group of entities under common ownership when the QIs: (i) operate under a uniform compliance program for purposes of this Agreement; (ii) share practices, procedures, and systems subject to uniform monitoring and control; and (iii) are subject to a consolidated periodic review that includes a review of internal controls and testing of transactions relevant to this Agreement with respect to each QI in the consolidated compliance program. Each QI that is a member of a consolidated compliance program must designate a Compliance QI to act on its behalf, and the responsible officer of the Compliance QI must identify itself as such when making its periodic certification and must comply with the identification, certification of internal controls, and periodic review requirements for the QI consolidated compliance program as the IRS may prescribe. The Compliance QI must also agree to be jointly and severally liable for the obligations and liabilities of any QI in its consolidated compliance program relating to the QI’s obligations under this Agreement.

10.03. Certification of Internal Controls by Responsible Officer. On or before July 1 of the calendar year following the certification period, QI must make the certification described in either section 10.03(A) or (B) of this Agreement. The initial certification period is the period ending on the third full calendar year that this Agreement is in effect (including renewals of this Agreement). Subsequent certification periods will be every three calendar years following the initial certification period (including renewals of this Agreement). The certification of internal controls required by this section 10.03 applies only to the internal controls related to QI’s compliance with this Agreement and its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or

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registered deemed-compliant Model 1 IGA FFI and, in the case of a direct reporting NFFE, its requirements under §1.1472-1(c)(3), with respect to accounts for which it acts as a qualified intermediary, and does not relate to any other obligations or requirements. The responsible officer may rely on any reasonable procedure, process, or review that enables the responsible officer to make the certification described in this section 10.03. If the responsible officer relies on an internal or external review for this purpose, the internal or external reviewer must be independent, as described in section 10.04 of this Agreement. The responsible officer must document the procedure, process, or review relied upon in making the certification. QI (or its Compliance QI) must make the certifications of compliance in such manner as the IRS may prescribe.

(A) Certification of Effective Internal Controls. The responsible officer must certify to the following and disclose any material failures that occurred during the certification period or during any prior period if the material failure was not disclosed as part of a prior certification or written disclosure made by QI to the IRS—

(1) QI has established a compliance program that meets the requirements described in section 10.02(A) or (B) (if applicable) of the QI Agreement that is in effect as of the date of the certification and during the certification period;

(2) Based on the information known (or information that reasonably should have been known) to the responsible officer, including the findings of any procedure, process, or review undertaken in preparation for the responsible officer’s certification of internal controls, QI maintains effective internal controls over its documentation, withholding, and reporting obligations under the QI Agreement and according to its applicable FATCA requirements, with respect to accounts for which it acts as a qualified intermediary, and, if QI is acting as a QDD, it maintains effective internal controls over its computation and tax obligations under the QI Agreement and the regulations under section 871(m);

(3) Based on the information known (or information that reasonably should have been known) to the responsible officer, including the findings of any procedure, process, or review undertaken in preparation for the responsible officer’s certification of internal controls, there are no material failures, as defined in section 10.03(D) of the QI Agreement, or, if there are any material failures, they have been corrected as of the date of this certification, and such failures are identified as part of this certification as well as the actions taken to remediate such failures and to prevent their reoccurrence by the date of this certification;

(4) With respect to any failure to withhold, deposit, or report to the extent required under the QI Agreement, or, with respect to QI that is acting as a QDD, any failure to pay its QDD tax liability, QI has corrected such failure by paying any taxes due (including interest and penalties) and filing the appropriate return (or amended return);

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(5) All PAIs of QI and partnerships and trusts to which QI applies the agency option have either (a) provided (or will provide, to the extent QI does not obtain a waiver under section 10.07 of the QI Agreement) documentation and other necessary information for inclusion in QI’s periodic review or (b) provided the responsible officer of QI with a certification of effective internal controls meeting the requirements of this section 10.03(A) of the QI Agreement and have represented to QI that there are no material failures, as defined in section 10.03(D) of the QI Agreement, or, if there are such failures, they have been corrected as of the time of this certification, and the PAIs, partnerships, or trusts have disclosed any such failures to QI together with the actions taken by the PAI, partnership, or trust to remediate such failures;

(6) QI’s policies, procedures, and processes are applied consistently to all branches covered by the QI Agreement (except as otherwise required by a jurisdiction’s AML/KYC procedures, as applicable);

(7) If QI is acting as a QDD, it has acted as a QDD for all payments with respect to potential section 871(m) transactions and underlying securities for which it is required to act as a QDD and no other transactions or underlying securities;

(8) If QI is acting as a QI and has assumed primary withholding responsibility with respect to payments of substitute interest (as described in section 3.03(A) of the QI Agreement), QI has assumed primary withholding responsibility for all such payments covered by the QI Agreement;

(9) A periodic review was conducted for the certification period in accordance with section 10.04 of the QI Agreement, and the results of such review are reported to the extent required in sections 10.05 and 10.06 of the QI Agreement.

(B) Qualified Certification. If the responsible officer has identified an event of default or a material failure that QI has not corrected as of the date of the certification, the responsible officer must certify to the following statements—

(1) The responsible officer (or designee) has identified an event of default as defined in section 11.06 of the QI Agreement, or has determined that, as of the date of the certification, there are one or more material failures as defined in section 10.03(D) of the QI Agreement with respect to QI’s compliance, its PAI’s compliance, or the compliance of a partnership or trust to which QI applies the agency option and that appropriate actions will be taken to prevent such failures from reoccurring;

(2) With respect to any failure to withhold, deposit, or report to the extent required under the QI Agreement, or with respect to QI that is acting as a QDD, a failure to pay its QDD tax liability, QI will correct such failure by paying any taxes due (including interest and penalties) and filing the appropriate return (or amended return); and

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(3) The responsible officer (or an officer of the PAI or partnership or trust to which QI applies the agency option if the PAI or partnership or trust performs its own periodic review) will respond to any notice of default (if applicable) or will provide (either directly or through QI) to the IRS, to the extent requested, a description of each material failure and a written plan to correct each such failure.

(C) PAIs and Partnership or Trust to which QI applies the Agency Option. Unless QI has received a waiver of the periodic review requirement, any PAI with which QI has an agreement and any partnership or trust to which QI applies the agency option must provide its documentation and other information to QI for inclusion in QI’s periodic review or conduct an independent periodic review and provide a written certification to QI as described in section 10.03 of this Agreement regarding its compliance with the requirements of the PAI or agency agreement. Such certification must be available to the IRS upon a request made as part of the review described in section 10.07 of this Agreement (with a certified translation into English if the certification is not in English).

(D) Material Failures.

(1) Material Failures Defined. A material failure is generally a failure of QI to fulfill the requirements of this Agreement or its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI and, in the case of a direct reporting NFFE, its requirements under §1.1472-1(c)(3). For purposes of the certifications described in section 10.03(A) and (B) of this Agreement, a material failure is limited to the following:

(i) QI’s establishing of, for financial statement purposes, a tax reserve or provision for a potential future tax liability related to QI’s failure to comply with this Agreement, including its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI, or, in the case of a direct reporting NFFE, its requirements under §1.1472-1(c)(3), and with respect to QI that is acting as a QDD, failure to satisfy its QDD tax liability and its obligations pursuant to section 871(m) and the regulations under that section.

(ii) QI’s failure to establish written policies, procedures, or systems sufficient for the relevant personnel of QI to take actions consistent with QI’s obligations under this Agreement, including, its FATCA requirements as a participating FFI, registered deemed-compliant FFI, registered deemed-compliant Model 1 IGA FFI, or, in the case of a direct reporting NFFE, its requirements under §1.1472-1(c)(3), or if QI is acting as a QDD, its obligations as a QDD under this Agreement or pursuant to section 871(m) and the regulations under that section.

(iii) A criminal or civil penalty or sanction imposed on QI (or any branch or office thereof) by a regulator or other governmental authority or agency with oversight over QI’s compliance with AML/KYC procedures to which QI (or any branch or office thereof)

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is subject and that is imposed due to QI’s failure to properly identify account holders under the requirements of those procedures.

(iv) A finding (including a finding noted in the periodic review report described in section 10.06 of this Agreement) for one or more years covered by this Agreement that QI failed to—

(a) Withhold an amount that QI was required to withhold under chapter 3 or 4 or under section 3406 as required under section 3 of this Agreement or, if QI is acting as a QDD, failing to timely pay its QDD tax liability;

(b) Provide information sufficient for another withholding agent to perform withholding and reporting to the extent required when QI does not assume primary chapters 3 and 4 withholding responsibility or primary Form 1099 reporting and backup withholding responsibility;

(c) Provide allocation information as described in section 6.03(D) of this Agreement (regarding U.S. non-exempt recipient account holders) by January 15 as required by that section when QI applies the alternative withholding rate pool procedures;

(d) Make deposits in the time and manner required by section 3.08 of this Agreement or make adequate deposits to satisfy its withholding obligations, or, if QI is acting as a QDD, satisfy its QDD tax liability, taking into account the procedures under section 9 of this Agreement;

(e) Report or report accurately on Forms 1099 as required under section 8.06 of this Agreement or provide information to the extent QI does not assume primary Form 1099 reporting and backup withholding responsibilities;

(f) Report or report accurately on Forms 1042 and 1042-S under sections 7 and 8 of this Agreement, or, if QI is acting as a QDD, obtain any necessary waiver from reporting or maintain the name, address, and TIN of a significant number of U.S. non-exempt recipients to whom the QDD makes a payment that otherwise would be a qualifying dividend equivalent offsetting payment but for the limitation in section 2.70(B) of this Agreement; or

(g) Report or report accurately on Form 8966 under sections 8.04 and 8.05 of this Agreement.

(2) Limitations on Material Failures. A failure described in section 10.03(D)(1)(iv) of this Agreement is a material failure only if the failure was the result of a deliberate action on the part of one or more employees of QI to avoid the requirements of this Agreement with respect to one or more account holders of QI, or was an error attributable to a failure of QI to establish or implement internal controls sufficient for QI to meet the requirements of this Agreement. Regardless of these limitations for certification

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purposes, QI is required to correct a failure to withhold or deposit tax under section 3 of this Agreement, or to report under section 7 or 8 of this Agreement, or, for a QI that is acting as a QDD, to pay its QDD tax liability, by depositing the amount of tax required to have been withheld and by filing the appropriate return (or amended return).

Sec. 10.04. Periodic Review Absent Waiver. Unless the QI receives a waiver (the requirements of which are described in section 10.07(B) of this Agreement), at the time QI provides the certification of internal controls, provided in section 10.03 of this Agreement, QI must also provide certain factual information regarding its accounts, withholdable payments, amounts subject to chapter 3 withholding, and, if QI is acting as a QDD, section 871(m) transactions, potential section 871(m) transactions, and its QDD tax liability based on the results of a periodic review. The factual information requested is included in Appendix I to this Agreement. The IRS will prescribe the manner in which the information must be reported in additional published guidance or other instructions.

(A) Independent Reviewer. The periodic review may be performed by an internal reviewer (such as an internal auditor) that is an employee of QI (“internal reviewer”), an internal reviewer that is an employee of a Compliance QI in the case of a consolidated compliance program, or a certified public accountant, attorney, or third-party consultant (“external reviewer”), or any combination thereof.

(1) Internal Reviewer. QI may designate an internal reviewer to perform the periodic review (or a portion of the periodic review) only when the internal reviewer is competent with respect to the requirements of this Agreement. The internal reviewer must also be able to report findings that reflect the independent judgment of the reviewer. The internal reviewer must not be reviewing its own work, procedures, or results (e.g., the internal reviewer, in reviewing QI’s documentation cannot be part of the team primarily responsible for collecting and validating documentation). The results of the periodic review and the internal reviewer’s reporting of such results to the responsible officer cannot influence or affect the compensation, bonus, employment status, or employee review of the internal reviewer. The IRS has the right to request the performance of the periodic review by an alternative reviewer if the IRS, in its sole discretion, reasonably believes that the reviewer selected by QI was not independent, as described in this Agreement, or did not perform an effective periodic review under this Agreement.

(2) Internal Reviewer of the Compliance QI. The Compliance QI may designate an internal reviewer to perform the consolidated periodic review (or a portion of the consolidated periodic review). See section 10.02(B) of this Agreement. The internal reviewer of the Compliance QI must meet the requirements of section 10.04(A)(1) of this Agreement with respect to both the Compliance QI and each QI that is a member of the consolidated compliance program.

(3) External Reviewer. QI may engage an external reviewer that is a certified public accountant, attorney, or third-party consultant that is regularly engaged in the practice of performing reviews of clients’ policies, procedures, and processes for complying with

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accounting, tax, or regulatory requirements (including assisting clients in determining such compliance). The external reviewer cannot be reviewing systems, policies, or procedures or the results thereof that it was involved in designing, implementing, or maintaining. The external reviewer must be in good standing with and comply with any applicable professional standards for maintaining its license as an accountant or attorney (or other third-party consultant). The external reviewer is not required to make an attestation or render an opinion regarding QI’s compliance with this Agreement or QI’s compliance with its FATCA requirements as a participating FFI, registered deemed- compliant FFI, or registered deemed-compliant Model 1 IGA FFI and, in the case of a direct reporting NFFE, its requirements under §1.1472-1(c)(3), but the reviewer must be able to perform the periodic review as specified in section 10.05 of this Agreement. QI must permit the external reviewer to have access to all relevant records of QI for purposes of performing the review, including information regarding specific account holders. Additionally, the engagement between the external reviewer and QI must impose no restrictions on QI’s ability to provide the results of the review to the IRS. However, the external reviewer is not required to divulge the identity of QI’s account holders to the IRS, except as otherwise provided under QI’s FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI. QI must permit the IRS to communicate directly with the external reviewer, and any legal prohibitions that prevent the IRS from communicating directly with the reviewer must be waived.

Sec. 10.05. Scope and Timing of Review. The responsible officer of QI (or of the Compliance QI) must require the reviewer to test accounts related to QI’s documentation, withholding, reporting, and other obligations under this Agreement, including its QDD tax liability with respect to QI that is acting as a QDD, and its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI and, in the case of a direct reporting NFFE, its requirements under §1.1472-1(c)(3) for accounts for which it is acting as a qualified intermediary, and to identify deficiencies in meeting these obligations. Any PAI with which QI has an agreement and any partnership or trust to which QI applies the agency option must provide the information necessary for QI to test accounts and transactions of such entity as part of QI’s periodic review unless such entity conducts an its own periodic review and provides QI with the report documenting the results of such review as described in section 10.06 of this Agreement. Unless otherwise approved by the IRS, the review must include the steps described in section 10.05(A) of this Agreement.

QI is required to arrange for the performance of one review for the certification period to evaluate QI’s documentation, withholding, and reporting practices. If QI is acting as a QDD, this should also include a review of its determination as to whether transactions are section 871(m) transactions, its computations and determinations of dividend equivalent amounts and qualifying dividend equivalent offsetting payments, and its calculation of its QDD tax liability. The review may be conducted for any calendar year covered by the certification period. However, all results of the review must relate to one calendar year. If QI is acting as a QDD and has an initial certification period ending

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December 31, 2017, it must use calendar year 2017 for its review of its QDD accounts and activities for the initial certification period. QI may conduct a review for a particular calendar year if, on the due date for reporting the factual information relating to the periodic review (provided in section 10.04 of this Agreement), there are 15 or more months available on the period for assessment under section 6501(a) of the calendar year for which the review is to be conducted or the QI’s submits, upon request, a Form 872, Consent to Extend the Time to Assess Tax, that will satisfy the 15-month requirement. The Form 872 must be submitted to the IRS at the address provided in section 12.06 of this Agreement.

QI may use a sample to test accounts if there are more than 50 accounts to review. If QI has fewer than 50 accounts, it must review all accounts and cannot use a sample to test accounts. To the extent applicable, the reviewer must separately review its QI activities (when not acting in its QDD capacity), QI acting as a QDD activities, and substitute interest payments for which QI assumed primary withholding responsibility (as described in section 3.03(A) of this Agreement). The reviewer is required to record its sampling procedures and to maintain the ability to reconstruct the sample. Further, the review is not required to include statistical sampling procedures for testing transactions, but the reviewer must document its methodology for sampling determinations. A safe harbor methodology and additional information on the use of statistical sampling is provided in Appendix II to this Agreement.

If the reviewer determines that underwithholding has occurred, QI shall report and pay any amount due. QI must also notify the IRS Foreign Intermediaries Team at the address provided in section 12.06 of this Agreement of the underwithholding discovered as a result of the review. If the reviewer used a sampling method for its review, see Appendix II to this Agreement for an allowance in certain cases to use a projection method to determine the amount of underwithholding.

(A) Documentation. The reviewer must–
(1) Review QI’s accounts, to ensure that QI obtained documentation that meets the

requirements described in sections 5.01 through 5.09 of this Agreement;

(2) Review QI’s accounts for which treaty benefits are claimed, to ensure that QI obtained the treaty statements and limitation on benefits information required by section 5.03(B) of this Agreement;

(3) Review information contained in account holder files to determine if the documentation validity standards of section 5.10 of this Agreement have been met. For example, the reviewer must verify that changes in account holder information (e.g., a change of address to a U.S. address or change of account holder status from foreign to U.S. or a change in chapter 4 status from participating FFI to non-participating FFI) are being conveyed to QI’s withholding agents;

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(4) Review the accounts for which QI is acting as a QI to ensure that QI is obtaining, reviewing, and maintaining documentation in accordance with its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed- compliant Model 1 IGA FFI and, in the case of a direct reporting NFFE, its requirements under §1.1472-1(c)(3);

(5) Review accounts held by U.S. non-exempt recipient account holders, to determine if QI obtained Forms W-9, and, if QI does not assume primary Form 1099 reporting and backup withholding responsibility, that QI transmitted those forms to a withholding agent consistent with this Agreement;

(6) For a QI that is a QDD, review accounts for which QI is acting as a QDD and that received a reportable payment or a qualified dividend equivalent offsetting payment (notwithstanding the limitation in section 2.70(B) of this Agreement) to determine whether QI has documented the status of account holders under the requirements described in sections 5.01 through 5.09 of this Agreement; and

(7) For a QI that makes payments of U.S. source substitute interest and assumes primary chapters 3 and 4 withholding responsibility for such amounts, review accounts of persons to which QI pays U.S. source substitute interest to determine whether QI has documented the status of such persons under the requirements described in sections 5.01 through 5.09 of this Agreement.

(B) Withholding Rate Pools. The reviewer must–

(1) Perform checks using account holders assigned to each withholding rate pool, and cross check that assignment against the documentation provided by, or the presumption rules applied to, the account holder, the type of income earned, and the withholding rate applied;

(2) Verify, if QI is using the procedure for U.S. non-exempt recipients described in section 6.03(D) of this Agreement, that QI is providing sufficient and timely information to withholding agents that allocates reportable payments to U.S. non-exempt recipients; and

(3) With respect to a partnership or trust described in section 4.05 of this Agreement, if applicable, perform test checks, using account holder documentation for the selected partners, beneficiaries, or owners and records of each type of reportable amount paid by QI to the entity, to determine whether the highest rate of withholding applicable to each type of reportable amount was applied.

(C) Withholding Responsibilities. The reviewer must–
(1) To the extent QI has assumed primary chapters 3 and 4 withholding responsibilities,

perform test checks, using recalcitrant account holders and nonparticipating FFIs, to

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verify that QI withheld the proper amounts under chapter 4;

(2) To the extent QI has assumed primary chapters 3 and 4 withholding responsibility, perform test checks, using foreign account holders for which no withholding is required under chapter 4 based on the payees chapter 4 status, to verify that QI withheld the proper amounts under chapter 3 and properly applied the exemptions from chapter 4 withholding;

(3) To the extent QI has not assumed primary chapters 3 and 4 withholding responsibility, verify that QI has fulfilled its responsibilities under section 3.02 of this Agreement (including withholding if QI failed to provide the required information to a withholding agent to withhold on payments);

(4) To the extent QI has assumed primary Form 1099 reporting and backup withholding responsibility, perform checks using U.S. non-exempt recipient account holders to verify that QI backup withheld when required;

(5) To the extent QI has not assumed primary Form 1099 reporting and backup withholding responsibility, perform test checks using U.S. non-exempt account holders to verify that QI fulfilled its backup withholding responsibilities under sections 3.04 through 3.06 of this Agreement;

(6) Verify that amounts withheld by QI were timely deposited in accordance with section 3.08 of this Agreement;

(7) To the extent that QI is acting as a QDD, determine that QI withheld when required on payments that it made with respect to potential section 871(m) transactions; and

(8) To the extent that QI makes payments of U.S. source substitute interest and assumes chapter 3 and 4 withholding responsibility for such amounts, determine that QI withheld when required on such payments.

(D) Return Filing and Information Reporting. The reviewer must–

(1) Obtain copies of original and amended Forms 1042 and 945, and any schedules, statements, or attachments required to be filed with those forms, verify that the forms have been filed, and determine whether the amounts of income, taxes, and other information reported on those forms are accurate by–

(i) Reviewing copies of Forms 1042-S that withholding agents have provided QI to determine whether QI properly reported the amount of taxes withheld by other withholding agents on Form 1042;

(ii) Reviewing account statements and correspondence from withholding agents; 110

(iii) Determining that adjustments to the amount of tax shown on Form 1042 (and any claim by QI for refund or credit) properly reflect the adjustments to withholding made by QI using the reimbursement or set off procedures under section 9.02 of this Agreement and are supported by sufficient documentation;

(iv) Reconciling amounts shown on Forms 1042 with amounts shown on Form 1042-S (including the amount of taxes reported as withheld);

(v) If QI is acting as a QDD, reviewing the reconciliation schedule described in section 7.01(c) of this Agreement and any information used to prepare such schedule or compute its QDD tax liability, including information received pursuant to §1.871-15(p), reviewing the amounts required to determine its section 871(m) amounts and its QDD tax liability over the applicable period, and reviewing such information to determine whether the section 871(m) amounts and QDD tax liability have been properly calculated;

(vi) If QI is acting as a QDD, reviewing amounts shown on Forms 1042 (including the reconciliation schedule) and Forms 1042-S, as well as any information received pursuant to §1.871-15(p), to determine whether the QDD properly took the information into account (e.g., to calculate its QDD tax liability);

(vii) In the case of collective credits or refunds, reviewing the statements attached to amended Forms 1042 filed to claim a collective refund, determine whether those forms are accurate, and—

(a) Determine the causes of any overwithholding reported and ensure QI did not issue Forms 1042-S to persons whom it included as part of its collective credit or refund;

(b) Determine that QI repaid the appropriate account holders and that the amount of the claim is accurate and supported by adequate documentation; and

(c) Determine that QI did not include payments made to a partnership or trust described in section 4.05 of this Agreement.

(2) Obtain copies of original and corrected Forms 1042-S and Forms 1099 filed by QI together with the work papers used to prepare those forms, and determine whether the amounts reported on those forms are accurate by–

(i) Reconciling payments and tax reported on Forms 1042-S received from withholding agents with amounts (including characterization of income) and taxes reported by QI as withheld on Forms 1042-S and determining the reason(s) for any variance;

(ii) Reviewing the Forms W-8IMY, and the associated withholding statements, that QI has provided withholding agents;

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(iii) Reviewing account statements issued by QI to account holders;

(iv) Determining, in the case in which QI utilized the reimbursement or set-off procedure, that QI satisfied the requirements of section 9.02 of this Agreement and that the adjusted amounts of tax withheld are properly reflected on Forms 1042-S.

(3) Obtain copies of original and amended Forms 8966 of accounts for which QI is acting as a qualified intermediary, and determine whether the amounts of income and other information reported on Forms 8966 are accurate by—

(i) Reviewing U.S. accounts (or U.S. reportable accounts for which QI acts as a qualified intermediary) to determine that such accounts were reported in accordance with QI’s FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI;

(ii) If QI is an NFFE acting as a qualified intermediary on behalf of its shareholders, confirming that any direct or indirect shareholders that are substantial U.S. owners were reported in accordance with §1.1472-1(c)(3);

(iii) If QI is an NFFE acting as a qualified intermediary on behalf of persons other than its shareholders, confirming that if QI is acting on behalf of a passive NFFE with substantial U.S. owners, withholdable payments made to the passive NFFE and the information regarding its substantial U.S. owners were reported;

(iv) Confirming with respect to any nonqualified intermediary or flow-through entity that provides information regarding an account holder (or interest holder) that is an NFFE (other than an excepted NFFE) with one or more substantial U.S. owners that such substantial U.S. owners were reported to the extent required under section 8.04(B) of this Agreement;

(v) Reviewing the documentation provided by a PAI or a partnership or trust to which QI applied the agency option to determine that QI reported on Form 8966 to the extent required under section 4 of this Agreement; and

(vi) Reviewing work papers used to prepare these forms.

(4) If QI is acting as a QDD, the reviewer must also review accounts designated as accounts for which QI acted as a QDD to determine whether QI is acting as a QDD with respect to all potential section 871(m) transactions and underlying securities for which it is required to act as a QDD and not any other transactions or underlying securities and whether the section 871(m) amount includes the amounts in its dealer capacity and not amounts in its non-dealer capacity.

(E) Significant Change in Circumstances. The reviewer must verify that in the course of the review it has not discovered any significant change in circumstances, as

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described in section 11.04(A), (D), (E), or (J) of this Agreement.

Sec. 10.06 Periodic Review Report.

(A) In General. The results of the periodic review must be documented in a written report addressed to the responsible officer of QI and must be available to the IRS upon request (with a certified translation into English if the report is not in English). The report must describe the scope of the review and the actions performed to satisfy each requirement of section 10.05(A) through (E), including the methodology for sampling determinations. The report may include explanatory footnotes to clarify the results of the report. Recommendations may be included but are not required to be provided in the report. The periodic review report should form the basis for the factual information provided by QI that is set forth in Appendix I.

In addition to the findings of section 10.05 of this Agreement, the periodic review report should also include details regarding the documentation and tax deposit and payment failures identified by the reviewer but then cured before the periodic review report is finalized. While the curing of inadequate documentation is permissible, the factual information reported (as set forth in Appendix I) should report the results upon initial review (i.e., not reflecting the results after curing) and the curing process should not delay certification of internal controls or factual information required in Appendix I to this Agreement. To the extent necessary, the periodic review report should include the dates on (or time period during) which curative documentation was received for accounts with respect to which the reviewer determined that underwithholding had occurred, the number of accounts for which curative documentation was obtained and a revised calculation of the underwithholding or additional backup withholding.

(B) Periodic Review Report for QDDs. If QI is acting as a QDD, the periodic review report should also include the number of accounts that were not correctly treated as (i) principal accounts (except accounts that are effectively connected with the conduct or a trade or business within the United States within the meaning of section 864), (ii) non- principal accounts, (iii) principal accounts that are effectively connected with the conduct or a trade or business within the United States within the meaning of section 864, (iv) dealer accounts, and (v) non-dealer accounts. The report should also include any other issues related to the QDD tax liability (e.g., incorrect determination of whether an account is a potential section 871(m) transaction or a section 871(m) transaction, the dividend equivalent payment amount, the qualifying dividend equivalent offsetting payment amount, the amount of such payments made or contractually obligated to be made, or any other amounts subject to tax (or required to compute the tax liability) under section 871(a) and 881 (including the QDD tax liability)).

(C) PAI Certification and Partnership or Trust to which QI Applies the Agency Option. Any PAI with which QI has an agreement and any partnership or trust to which QI applies the agency option that does not provide its documentation and other information to QI for inclusion in QI’s periodic review described in section 10.04 of this

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Agreement, must conduct an independent periodic review in accordance with the compliance procedures described in section 10.05 of this Agreement. The performance results of the periodic review must be documented in a written report addressed to the responsible officer of QI and must be available to the IRS upon request (with a certified translation into English if the report is not in English).

(D) Retention of Report and Certifications. The report and certifications described in this section 10.06 must be retained by QI (or the Compliance QI) for as long as this Agreement is in effect.

Sec. 10.07. Waiver of Periodic Review Requirement.

(A) In General. A QI that is not acting as a QDD and that is an FFI that meets the requirements of section 10.07(B) may apply for a waiver of the periodic review requirement. QI must request a waiver of the periodic review requirement under this section 10.07 at the time the responsible officer makes the periodic certification of internal controls described in section 10.03 of this Agreement. QI’s application for such a waiver must be approved by the IRS, and the waiver does not apply automatically. QI must apply for a waiver for each certification period for which a waiver is requested. If QI’s request for a waiver of the periodic review requirement is granted, such approval is only to waive QI’s obligations under sections 10.04 and 10.05 of this Agreement. The approval does not relieve QI of making the certification of internal controls described in section 10.03 of this Agreement. The approval also does not preclude the IRS from requesting information or conducting a correspondence review as described in section 10.07 of this Agreement. QI must include the information of any PAI with which QI has an agreement and any partnership or trust to which QI applies the agency option in its waiver application which is set forth in Part III of Appendix I to this Agreement.

(B) Eligibility. QI is eligible to apply for a waiver of the periodic review requirement if it meets the following requirements—

(1) QI must be an FFI that is not also acting as a QDD;
(2) QI cannot be part of a consolidated compliance program;

(3) For each calendar year covered by the certification period, the reportable amounts received by QI do not exceed $5 million;

(4) QI must have timely filed its Forms 1042, 1042-S, 945, 1099, and 8966, as applicable, for all calendar years covered by the certification period, including for the year to which the periodic review would be applied;

(5) QI must have made all periodic certifications and reviews required by sections 10.02 and 10.03 of this Agreement as well as all certifications required pursuant to QI’s FATCA requirements as a participating FFI, registered deemed-compliant FFI, or

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registered deemed-compliant Model 1 IGA FFI; and
(6) QI must have made the certification of effective internal controls in section 10.02(A).

(C) Documentation Required with Waiver Application. When applying for a waiver under this section 10.07, QI must include the information described in Appendix I to this Agreement using the most recent calendar year covered by the certification period and reporting such results as of QI’s initial review (not following any subsequent remediation).

(D) Approval. If QI’s request for a waiver of the periodic review requirement is approved, the IRS will notify QI. If QI requests a waiver but such request is not approved, QI will be granted a six month extension from the date of denial of the waiver to complete the periodic review. Such extension will not be granted if QI has made the request for waiver in bad faith.

Sec. 10.08. Periodic Review.

(A) In General. Based upon the certifications made by the responsible officer and the disclosure of material failures, the information reported on Forms 945, 1042, 1042-S, 1099, and 8966 filed with the IRS during the certification period, or otherwise at the IRS’s discretion for compliance purposes, the IRS may initiate requests of QI under this section 10.08. The IRS may preemptively request remediation or the conduct of a limited periodic review earlier than the time period provided in section 10.03 of this Agreement if, based upon the information described above, the IRS identifies, in its discretion, a presence of factors indicating systemic or significant compliance failures by QI. The IRS may also request that QI designate a replacement responsible officer if QI’s responsible officer has not complied with its responsibilities (including responding to requests by the IRS for additional information) or the IRS has information that indicates the responsible officer may not be relied upon to comply with its responsibilities.

(B) Periodic Review Report. The IRS may request, through written correspondence to the responsible officer of QI (or the Compliance QI), a copy of the results of QI’s periodic review for any prior certification period or the periodic review report of any PAI or partnership or trust to which QI applied the agency option that QI has an agreement during the current certification period (with a certified translation into English if the report is not in English). QI is required to provide the results within 30 calendar days of such request.

(C) Correspondence Review. The IRS may, in its discretion, conduct additional fact finding through a correspondence review. In such a review, the IRS will contact the responsible officer of QI (or the Compliance QI) in writing and request information about QI’s compliance with this Agreement or the compliance of a PAI or a partnership or trust to which QI applied the agency option, including, for example, information about

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documentation, withholding, or reporting processes, its periodic review, and information about any material failures that were disclosed to the IRS (including remediation plans). The IRS may request phone or video interviews with employees of QI (and the Compliance QI), PAI, or a partnership or trust to which QI applied the agency option as part of the IRS’s correspondence review. QI is required to respond in a reasonable time to any such requests.

(D) Additional Review Procedures. In limited circumstances, the IRS may direct QI (or the Compliance FFI) or any PAI, partnership, or trust described in section 4 of this Agreement with which QI has an agreement to perform additional, specified review procedures. The IRS reserves the right to require QI (or the Compliance QI) or a PAI, or a partnership or trust to which QI applied the agency option to engage an external reviewer to perform the additional review procedures regardless of whether such reviewer performed the periodic review. The IRS will provide the responsible officer of the QI with a written plan describing the additional review procedures and will provide a due date of not more than 120 days for the QI to provide to the IRS a report covering the reviewer’s findings.

SECTION 11. EXPIRATION, TERMINATION, MERGER AND DEFAULT

Sec. 11.01. Term of Agreement. This Agreement begins on the effective date of the QI Agreement and expires at the end of the third full calendar year the Agreement is in effect, unless terminated under section 11.02 of this Agreement. This Agreement may be renewed as provided in section 11.08 of this Agreement.

Sec. 11.02. Termination of Agreement. This Agreement may be terminated by either the IRS or QI prior to the end of its term by delivery of a notice, in accordance with section 12.06 of this Agreement, of termination to the other party. The IRS, however, shall not terminate this Agreement unless there has been a significant change in circumstances, as defined in section 11.04 of this Agreement, or an event of default has occurred, as defined in section 11.06 of this Agreement, and the IRS determines, in its sole discretion, that the significant change in circumstances or the event of default warrants termination of this Agreement. The IRS shall not terminate this Agreement if QI can establish to the satisfaction of the IRS that all events of default for which it has received notice have been cured within the time period agreed upon. The IRS shall notify QI, in accordance with section 11.06 of this Agreement, that an event of default has occurred and that the IRS intends to terminate the Agreement unless QI cures the default or establishes that no event of default occurred. A notice of termination sent by either party shall take effect on the date specified in the notice, and QI is required to notify its withholding agent of the date that its status as a QI is terminated.

The termination of the Agreement shall not affect any of QI’s reporting, tax filing, withholding, depositing, or payment responsibilities arising in the calendar years and portion of the calendar year in which termination is requested and for which this Agreement was in effect. The IRS shall revoke QI’s QI-EIN within a reasonable time

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after the reporting, tax filing, and depositing requirements for such years are satisfied. The termination of this Agreement is not intended to affect any other federal income tax consequences.

Sec. 11.03. Loss of QDD Status. If QI is acting as a QDD and fails to qualify as an eligible entity during the term of this Agreement, QI shall lose its QDD status immediately upon QI failing to qualify as an eligible entity and as of that date can no longer act as a QDD. QI is required to notify its withholding agent of the date that it failed to qualify as an eligible entity and no longer was permitted to act as a QDD. QI’s loss of QDD status shall not affect any of QI’s QDD reporting, tax filing, withholding, depositing, or payment responsibilities for the period QI was acting as a QDD as provided in this Agreement, including paying its QDD tax liability.

Sec. 11.04. Significant Change in Circumstances. For purposes of this Agreement, a significant change in circumstances includes, but is not limited to–

(A) An acquisition of all, or substantially all, of QI’s assets in any transaction in which QI is not the surviving legal entity;

(B) A change in U.S. federal law or policy, or applicable foreign law or policy, that affects the validity of any provision of this Agreement, materially affects the procedures contained in this Agreement, or affects QI’s ability to perform its obligations under this Agreement;

(C) A ruling of any court that affects the validity of any material provision of this Agreement;

(D) A material change in the know-your-customer rules and procedures set forth in any Attachment to this Agreement;

(E) A significant change in QI’s business practices that affects QI’s ability to meet its obligations under this Agreement;

(G) If QI is an FFI, QI fails to maintain its status as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI;

(H) If QI is an NFFE acting as a QI on behalf of its shareholders, if it fails to meet its requirements as a direct reporting NFFE under §1.1472-1(c)(3);

(I) If QI is acting as a sponsoring entity on behalf of a sponsored FFI or sponsored direct reporting NFFE, if it fails to comply with the due diligence, withholding, reporting, and compliance requirements of a sponsoring entity; or

(J) If QI is acting as a QDD, QI ceases to qualify as an eligible entity, including as a result of a change in its business or regulatory status (see section 11.02).

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Sec. 11.05. Merger. If QI merges with or is acquired by another QI and the successor QI assumes all the rights, debts, and obligations of the predecessor QI as it relates to such QI’s QI agreement, the predecessor or acquired QI must notify the IRS that it intends to terminate this Agreement prior to the end of its term by delivery of a notice of termination and merger, in accordance with section 12.06 of this Agreement. A notice of termination and merger shall take effect on the date specified in the notice, and QI is required to notify its withholding agent of the date that its status as a QI is terminated and designate the successor QI to receive payments in its capacity as a QI for any accounts previously covered by predecessor QI’s QI Agreement.

The successor QI must ensure that all reporting and tax filing obligations are fulfilled and any withholding is deposited, in accordance with the procedures outlined in Rev. Proc. 99-50, 1999-2 C.B. 757, when applicable, that arose in the calendar years and portion of the calendar year in which termination is requested and for which this Agreement was in effect (including for Form 1042-S filed to report withholding under chapter 4). To the extent QI is acting as a QDD, it must use the standard procedure outlined in Rev. Proc. 99-50 and cannot use the alternative procedures. See QI’s FATCA Requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI for the procedures, if any, for reporting on Form 8966 in the case of a merger or acquisition. The IRS shall revoke QI’s QI-EIN within a reasonable time after once the reporting, tax filing, and depositing requirements for such years are satisfied. The termination of this Agreement is not intended to affect any other federal income tax consequences

Sec. 11.06. Event of Default. For purposes of this Agreement, an event of default occurs if QI fails to perform any material duty or obligation required under this Agreement and the responsible officer had actual knowledge or should have known of the facts relevant to the failure to perform any material duty. An event of default includes, but is not limited to, the occurrence of any of the following:

(A) QI fails to implement adequate procedures, accounting systems, and internal controls to ensure compliance with this Agreement;

(B) QI underwithholds a material amount of tax that QI is required to withhold under chapter 3 or 4 or backup withhold under section 3406 and fails to correct the underwithholding or to file an amended Form 1042 or 945 reporting, and paying, the appropriate tax;

(C) QI makes excessive refund claims;
(D) Documentation described in section 5 of this Agreement is lacking, incorrect, or

unreliable for a significant number of direct account holders;

(E) QI files Forms 945, 1042, 1042-S, 1099, or 8966 that are materially incorrect or 118

fraudulent;

(F) If QI is an FFI, QI fails to materially comply with its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI;

(G) If QI is an NFFE acting as a QI on behalf of its shareholders, QI fails to materially comply with its requirements as a direct reporting NFFE under §1.1472-1(c)(3); or if QI is a sponsoring entity, QI fails to materially comply with the due diligence, withholding, reporting, and compliance requirements of a sponsoring entity;

(H) QI fails to materially comply with the requirements of a nonqualified intermediary under chapters 3 and 61, and section 3406 with respect to any account for which QI does not act as a QI.

(I) QI fails to perform a periodic review when required or document the findings of such review in a written report;

(J) QI fails to cooperate with the IRS on its compliance review described in section 10.08 of this Agreement;

(K) QI fails to inform the IRS of any change in the know-your-customer rules described in any Attachment to this Agreement within 90 days of the change becoming effective;

(L) QI fails to inform the IRS within 90 days of any significant change in its business practices to the extent that change affects QI’s obligations under this Agreement;

(M) QI fails to inform the IRS of any PAI of QI, as described in section 4 of this Agreement;

(N) QI fails to cure a material failure identified in the qualified certification described in section 10.03 of this Agreement or identified by the IRS;

(O) QI makes any fraudulent statement or a misrepresentation of material fact with regard to this Agreement to the IRS, a withholding agent, or QI’s reviewer;

(P) The IRS determines that QI’s reviewer is not sufficiently independent, as described in this Agreement, to adequately perform its review function, and QI fails to arrange for a periodic review conducted by a reviewer approved by the IRS;

(Q) An intermediary with which QI has a PAI agreement is in default with that agreement and QI fails to terminate that agreement within the time period specified in section 4.04 of this Agreement;

(R) A partnership or trust to which QI applies the agency option is in default with that 119

agreement and QI fails to terminate that agreement within the time period specified in section 4.06 of this Agreement; and

(S) If QI is acting as a QDD, QI fails to timely pay a material amount of its QDD tax liability and fails to correct the underpayment and pay the appropriate tax amount.

Sec. 11.07. Notice and Cure. Upon the occurrence of an event of default, the IRS will deliver to QI a notice of default specifying each event of default. QI must respond to the notice of default within 60 days (60-day response) from the date of the notice of default. The 60-day response shall contain an offer to cure the event of default and the time period in which to cure or shall state why QI believes that no event of default occurred. If QI does not provide a 60-day response, the IRS will deliver a notice of termination as provided in section 11.02 of this Agreement. If QI provides a 60-day response, the IRS shall either accept or reject QI’s statement that no default has occurred or QI’s proposal to cure the event of default. If the IRS rejects QI’s contention that no default has occurred or rejects QI’s proposal to cure the event of default, the IRS may offer a counter-proposal to cure the event of default with which QI will be required to comply within 30 days. If QI fails to provide a 30-day response, the IRS will send a notice of termination in accordance with section 11.02 of this Agreement to QI, which QI may appeal within 30 days of the date of the notice by sending a written appeal to the address specified in section 12.06 of this Agreement. If QI appeals the notice of termination, this Agreement shall not terminate until the appeal has been decided. If an event of default is discovered in the course of a review, the QI may cure the default, without following the procedures of this section 11.07, if the external reviewer’s report describes the default and the actions that QI took to cure the default and the IRS determines that the cure procedures followed by QI were sufficient. If the IRS determines that QI’s actions to cure the default were not sufficient, the IRS shall issue a notice of default and the procedures described in this section 11.07 shall be followed.

Sec. 11.08. Renewal. If QI (including a QI that is renewing its QDD status) is an FFI, an NFFE acting on behalf of its shareholders, or an NFFE that is a sponsoring entity and intends to renew this Agreement, it must submit a registration for renewal to the IRS on the FATCA registration website in accordance with the instructions to Form 8957 or as otherwise provided in published guidance. This Agreement will be renewed only upon the agreement of both QI and the IRS. A QI that seeks to renew its QI agreement and also seeks to become a QDD must supplement the renewal request by providing a statement containing all information required by Form 14345 relating to a QDD.

A QI not described in the preceding paragraph must renew its QI agreement by submitting a request for renewal to the Foreign Intermediaries Program at the address provided in section 12.06 of this Agreement.

SECTION 12. MISCELLANEOUS PROVISIONS

Sec. 12.01. QI’s application to become a qualified intermediary, all Appendices and 120

Attachments to this Agreement, and, the following are hereby incorporated into and made an integral part of this Agreement:

(a) If QI is an FFI, its FATCA requirements as a participating FFI, registered deemed- compliant FFI, or registered deemed-compliant Model 1 IGA FFI; or

(b) If QI is an NFFE acting as a QI on behalf of its shareholders, its requirements as a direct reporting NFFE under §1.1472-1(c)(3).

This Agreement, QI’s application, and the Appendices and Attachments to this Agreement constitute the complete agreement between the parties.

Sec. 12.02. This Agreement may be amended by the IRS if the IRS determines that such amendment is needed for the sound administration of the internal revenue laws or internal revenue regulations. This Agreement will only be modified through published guidance issued by the IRS and U.S. Treasury Department. Any such modification imposing additional requirements will in no event become effective until the later of 90 days after the IRS provides notice of such modification or the beginning of the next calendar year following the publication of such guidance.

Sec. 12.03. Any waiver of a provision of this Agreement is a waiver solely of that provision. The waiver does not obligate the IRS to waive other provisions of this Agreement or the same provision at a later date.

Sec. 12.04. This Agreement shall be governed by the laws of the United States. Any legal action brought under this Agreement shall be brought only in a United States court with jurisdiction to hear and resolve matters under the internal revenue laws of the United States. For this purpose, QI agrees to submit to the jurisdiction of such United States court.

Sec. 12.05. QI’s rights and responsibilities under this Agreement cannot be assigned to another person.

Sec. 12.06. Except as otherwise provided in the instructions to Form 8957, notices provided under this Agreement shall be mailed registered, first class airmail. All notices sent to the IRS must include the QI’s name, QI-EIN, GIIN (if applicable), and the name of its responsible officer. Such notices shall be directed as follows:

To the IRS:
Internal Revenue Service Foreign Payments Practice Foreign Intermediaries Program 290 Broadway, 12th Floor NW New York, New York 10007-1867

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To the QI:
The QI’s responsible officer. Such notices shall be sent to the address indicated in the QI’s registration or application (as may be amended).

Sec. 12.07. QI, acting in its capacity as a qualified intermediary or in any other capacity, does not act as an agent of the IRS, nor does it have the authority to hold itself out as an agent of the IRS.

SECTION 5. EFFECTIVE DATE
The effective date of the QI agreement contained in section 4 of this notice (as modified and superseded by any future published guidance) is January 1, 2017.
SECTION 6. DRAFTING INFORMATION

The principal author of this notice is Leni C. Perkins of the Office of Associate Chief Counsel (International). For further information regarding this notice contact Ms. Perkins at (202) 317-6942 (not a toll free call) or, with respect to QDDs, Peter Merkel or Karen Walny at (202) 317-6938 (not a toll free call).

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