LegalizeResolução da Assembleia da República n.º 183/2016 — Aprova o Acordo entre a República Portuguesa e os Estados Unidos da América para reforçar o cumprimento fiscal e…
Este é o ato tal como foi publicado. As alterações posteriores não estão incorporadas no texto: cada uma é um ato autónomo neste repositório e uma entrada no historial desta lei.
Aprova o Acordo entre a República Portuguesa e os Estados Unidos da América para reforçar o cumprimento fiscal e implementar o Foreign Account Tax Compliance Act (FATCA), assinado em Lisboa, em 6 de agosto de 2015
to the extent that a Reporting Portuguese Financial Institution is (i) acting as a qualified intermediary (for purposes of section 1441 of the U.S. Internal Revenue Code) that has elected to assume primary withholding responsibility under chapter 3 of subtitle A of the U.S. Internal Revenue Code, (ii) a foreign partnership that has elected to act as a withholding foreign partnership (for purposes of both sections 1441 and 1471 of the U.S. Internal Revenue Code), or (iii) a foreign trust that has elected to act as a withholding foreign trust (for purposes of both sections 1441 and 1471 of the U.S. Internal Revenue Code), withholds 30 percent of any U.S. Source Withholdable Payment to any Nonparticipating Financial Institution; and
in the case of a Reporting Portuguese Financial Institution that is not described in subparagraph 1(d) of this article and that makes a payment of, or acts as an intermediary with respect to, a U.S. Source Withholdable Payment to any Nonparticipating Financial Institution, the Reporting Portuguese Financial Institution provides to any immediate payor of such U.S. Source Withholdable Payment the information required for withholding and reporting to occur with respect to such payment.
Notwithstanding the foregoing, a Reporting Portuguese Financial Institution with respect to which the conditions of this paragraph 1 are not satisfied shall not be subject to withholding under section 1471 of the U.S. Internal Revenue Code unless such Reporting Portuguese Financial Institution is treated by the IRS as a Nonparticipating Financial Institution pursuant to subparagraph 2(b) of article 5 of this Agreement.
2 - Suspension of Rules Relating to Recalcitrant Accounts. The United States shall not require a Reporting Portuguese Financial Institution to withhold tax under section 1471 or 1472 of the U.S. Internal Revenue Code with respect to an account held by a recalcitrant account holder (as defined in section 1471(d)(6) of the U.S. Internal Revenue Code), or to close such account, if the U.S. Competent Authority receives the information set forth in subparagraph 2(a) of article 2 of this Agreement, subject to the provisions of article 3 of this Agreement, with respect to such account.
3 - Specific Treatment of Portuguese Retirement Plans. The United States shall treat as deemed-compliant FFIs or exempt beneficial owners, as appropriate, for purposes of sections 1471 and 1472 of the U.S. Internal Revenue Code, Portuguese retirement plans described in Annex II. For this purpose, a Portuguese retirement plan includes an Entity established or located in, and regulated by, Portugal, or a predetermined contractual or legal arrangement, operated to provide pension or retirement benefits or earn income for providing such benefits under the laws of Portugal and regulated with respect to contributions, distributions, reporting, sponsorship, and taxation.
4 - Identification and Treatment of Other Deemed-Compliant FFIs and Exempt Beneficial Owners. The United States shall treat each Non-Reporting Portuguese Financial Institution as a deemed-compliant FFI or as an exempt beneficial owner, as appropriate, for purposes of section 1471 of the U.S. Internal Revenue Code.
5 - Special Rules Regarding Related Entities and Branches That Are Nonparticipating Financial Institutions. If a Portuguese Financial Institution, that otherwise meets the requirements described in paragraph 1 of this article or is described in paragraph 3 or 4 of this article, has a Related Entity or branch that operates in a jurisdiction that prevents such Related Entity or branch from fulfilling the requirements of a participating FFI or deemed-compliant FFI for purposes of section 1471 of the U.S. Internal Revenue Code or has a Related Entity or branch that is treated as a Nonparticipating Financial Institution solely due to the expiration of the transitional rule for limited FFIs and limited branches under relevant U.S. Treasury Regulations, such Portuguese Financial Institution shall continue to be in compliance with the terms of this Agreement and shall continue to be treated as a deemed-compliant FFI or exempt beneficial owner, as appropriate, for purposes of section 1471 of the U.S. Internal Revenue Code, provided that:
the Portuguese Financial Institution treats each such Related Entity or branch as a separate Nonparticipating Financial Institution for purposes of all the reporting and withholding requirements of this Agreement and each such Related Entity or branch identifies itself to withholding agents as a Nonparticipating Financial Institution;
each such Related Entity or branch identifies its U.S. accounts and reports the information with respect to those accounts as required under section 1471 of the U.S. Internal Revenue Code to the extent permitted under the relevant laws pertaining to the Related Entity or branch; and
such Related Entity or branch does not specifically solicit U.S. accounts held by persons that are not resident in the jurisdiction where such Related Entity or branch is located or accounts held by Nonparticipating Financial Institutions that are not established in the jurisdiction where such Related Entity or branch is located, and such Related Entity or branch is not used by the Portuguese Financial Institution or any other Related Entity to circumvent the obligations under this Agreement or under section 1471 of the U.S. Internal Revenue Code, as appropriate.
6 - Coordination of Timing. Notwithstanding paragraphs 3 and 5 of article 3 of this Agreement:
Portugal shall not be obligated to obtain and exchange information with respect to a calendar year that is prior to the calendar year with respect to which similar information is required to be reported to the IRS by participating FFIs pursuant to relevant U.S. Treasury Regulations;
Portugal shall not be obligated to begin exchanging information prior to the date by which participating FFIs are required to report similar information to the IRS under relevant U.S. Treasury Regulations;
the United States shall not be obligated to obtain and exchange information with respect to a calendar year that is prior to the first calendar year with respect to which Portugal is required to obtain and exchange information; and
the United States shall not be obligated to begin exchanging information prior to the date by which Portugal is required to begin exchanging information.
7 - Coordination of Definitions with U.S. Treasury Regulations. Notwithstanding article 1 of this Agreement and the definitions provided in the Annexes to this Agreement, in implementing this Agreement, Portugal may use, and may permit Portuguese Financial Institutions to use, a definition in relevant U.S. Treasury Regulations in lieu of a corresponding definition in this Agreement, provided that such application would not frustrate the purposes of this Agreement.
Article 5
Collaboration on Compliance and Enforcement
1 - Minor and Administrative Errors. A Competent Authority shall notify the Competent Authority of the other Party when the first-mentioned Competent Authority has reason to believe that administrative errors or other minor errors may have led to incorrect or incomplete information reporting or resulted in other infringements of this Agreement. The Competent Authority of such other Party shall apply its domestic law (including applicable penalties) to obtain corrected and/or complete information or to resolve other infringements of this Agreement.
2 - Significant Non-Compliance.
A Competent Authority shall notify the Competent Authority of the other Party when the first-mentioned Competent Authority has determined that there is significant non-compliance with the obligations under this Agreement with respect to a Reporting Financial Institution in the other jurisdiction. The Competent Authority of such other Party shall apply its domestic law (including applicable penalties) to address the significant non-compliance described in the notice.
If, in the case of a Reporting Portuguese Financial Institution, such enforcement actions do not resolve the non-compliance within a period of 18 months after notification of significant non-compliance is first provided, the United States shall treat the Reporting Portuguese Financial Institution as a Nonparticipating Financial Institution pursuant to this subparagraph 2(b).
3 - Reliance on Third Party Service Providers. Each Party may allow Reporting Financial Institutions to use third party service providers to fulfill the obligations imposed on such Reporting Financial Institutions by a Party, as contemplated in this Agreement, but these obligations shall remain the responsibility of the Reporting Financial Institutions.
4 - Prevention of Avoidance. The Parties shall implement as necessary requirements to prevent Financial Institutions from adopting practices intended to circumvent the reporting required under this Agreement.
Article 6
Mutual Commitment to Continue to Enhance the Effectiveness of Information Exchange and Transparency
1 - Reciprocity. The Government of the United States acknowledges the need to achieve equivalent levels of reciprocal automatic information exchange with Portugal. The Government of the United States is committed to further improve transparency and enhance the exchange relationship with Portugal by pursuing the adoption of regulations and advocating and supporting relevant legislation to achieve such equivalent levels of reciprocal automatic information exchange.
2 - Treatment of Passthru Payments and Gross Proceeds. The Parties are committed to work together, along with Partner Jurisdictions, to develop a practical and effective alternative approach to achieve the policy objectives of foreign passthru payment and gross proceeds withholding that minimizes burden.
3 - Documentation of Accounts Maintained as of June 30, 2014. With respect to Reportable Accounts maintained by a Reporting Financial Institution as of June 30, 2014:
The United States commits to establish, by January 1, 2017, for reporting with respect to 2017 and subsequent years, rules requiring Reporting U.S. Financial Institutions to obtain and report the Portuguese TIN of each Account Holder of a Portuguese Reportable Account as required pursuant to subparagraph 2(b)(1) of article 2 of this Agreement; and
Portugal commits to establish, by January 1, 2017, for reporting with respect to 2017 and subsequent years, rules requiring Reporting Portuguese Financial Institutions to obtain the U.S. TIN of each Specified U.S. Person as required pursuant to subparagraph 2(a)(1) of article 2 of this Agreement.
Article 7
Consistency in the Application of FATCA to Partner Jurisdictions
1 - Portugal shall be granted the benefit of any more favorable terms under article 4 or Annex I of this Agreement relating to the application of FATCA to Portuguese Financial Institutions afforded to another Partner Jurisdiction under a signed bilateral agreement pursuant to which the other Partner Jurisdiction commits to undertake the same obligations as Portugal described in articles 2 and 3 of this Agreement, and subject to the same terms and conditions as described therein and in articles 5 through 9 of this Agreement.
2 - The United States shall notify Portugal of any such more favorable terms, and such more favorable terms shall apply automatically under this Agreement as if such terms were specified in this Agreement and effective as of the date of the signing of the agreement incorporating the more favorable terms, unless Portugal declines in writing the application thereof.
Article 8
Consultations and Amendments
1 - In case any difficulties in the implementation of this Agreement arise, either Party may request consultations to develop appropriate measures to ensure the fulfillment of this Agreement.
2 - This Agreement may be amended by written mutual agreement of the Parties. Unless otherwise agreed upon, such an amendment shall enter into force through the same procedures as set forth in paragraph 1 of article 10 of this Agreement.
Article 9
Annexes
The Annexes form an integral part of this Agreement.
Article 10
Term of Agreement
1 - This Agreement shall enter into force on the date of Portugal's written notification to the United States that Portugal has completed its necessary internal procedures for entry into force of this Agreement.
2 - Either Party may terminate this Agreement by giving notice of termination in writing to the other Party. Such termination shall become effective on the first day of the month following the expiration of a period of 12 months after the date of the notice of termination.
3 - The Parties shall, prior to December 31, 2016, consult in good faith to amend this Agreement as necessary to reflect progress on the commitments set forth in article 6 of this Agreement.
In witness whereof, the undersigned, being duly authorized thereto by their respective Governments, have signed this Agreement.
Done at Lisbon, in duplicate, in the Portuguese and English languages, both texts being equally authentic, this sixth day of August, two thousand and fifteen.
For the Portuguese Republic:
Paulo Núncio, Secretary of State of Tax Affairs.
For the United States of America:
Robert A. Sherman, Ambassador of the United States of America.
ANNEX I
DUE DILIGENCE OBLIGATIONS FOR IDENTIFYING AND REPORTING ON U.S. REPORTABLE ACCOUNTS AND ON PAYMENTS TO CERTAIN NONPARTICIPATING FINANCIAL INSTITUTIONS.
I. General.
A. Portugal shall require that Reporting Portuguese Financial Institutions apply the due diligence procedures contained in this Annex I to identify U.S. Reportable Accounts and accounts held by Nonparticipating Financial Institutions.
B. For purposes of the Agreement,
1 - All dollar amounts shall be read to include the equivalent in other currencies.
2 - Except as otherwise provided herein, the balance or value of an account shall be determined as of the last day of the calendar year or other appropriate reporting period.
3 - Where a balance or value threshold is to be determined as of June 30, 2014 under this Annex I, the relevant balance or value shall be determined as of that day or the last day of the reporting period ending immediately before June 30, 2014, and where a balance or value threshold is to be determined as of the last day of a calendar year under this Annex I, the relevant balance or value shall be determined as of the last day of the reporting period that ends with or within that calendar year.
4 - Subject to subparagraph E(1) of section II of this Annex I, an account shall be treated as a U.S. Reportable Account beginning as of the date it is identified as such pursuant to the due diligence procedures in this Annex I.
5 - Unless otherwise provided, information with respect to a U.S. Reportable Account shall be reported annually in the calendar year following the year to which the information relates.
C. As an alternative to the procedures described in each section of this Annex I, Portugal may permit Reporting Portuguese Financial Institutions to rely on the procedures described in relevant U.S. Treasury Regulations to establish whether an account is a U.S. Reportable Account or an account held by a Nonparticipating Financial Institution. Portugal may permit Reporting Portuguese Financial Institutions to make such election separately for each section of this Annex I either with respect to all relevant Financial Accounts or, separately, with respect to any clearly identified group of such accounts (such as by line of business or the location of where the account is maintained).
II. Preexisting Individual Accounts. The following rules and procedures apply for purposes of identifying U.S. Reportable Accounts among Preexisting Accounts held by individuals ("Preexisting Individual Accounts").
A. Accounts Not Required to Be Reviewed, Identified, or Reported. Unless the Reporting Portuguese Financial Institution elects otherwise, either with respect to all Preexisting Individual Accounts or, separately, with respect to any clearly identified group of such accounts, where the implementing rules in Portugal provide for such an election, the following Preexisting Individual Accounts are not required to be reviewed, identified, or reported as U.S. Reportable Accounts:
1 - Subject to subparagraph E(2) of this section, a Preexisting Individual Account with a balance or value that does not exceed $50,000 as of June 30, 2014.
2 - Subject to subparagraph E(2) of this section, a Preexisting Individual Account that is a Cash Value Insurance Contract or an Annuity Contract with a balance or value of $250,000 or less as of June 30, 2014.
3 - A Preexisting Individual Account that is a Cash Value Insurance Contract or an Annuity Contract, provided the law or regulations of Portugal or the United States effectively prevent the sale of such a Cash Value Insurance Contract or an Annuity Contract to U.S. residents (e.g., if the relevant Financial Institution does not have the required registration under U.S. law, and the law of Portugal requires reporting or withholding with respect to insurance products held by residents of Portugal).
4 - A Depository Account with a balance of $50,000 or less.
B. Review Procedures for Preexisting Individual Accounts With a Balance or Value as of June 30, 2014, that Exceeds $50,000 ($250,000 for a Cash Value Insurance Contract or Annuity Contract), But Does Not Exceed $1,000,000 ("Lower Value Accounts").
1 - Electronic Record Search. The Reporting Portuguese Financial Institution must review electronically searchable data maintained by the Reporting Portuguese Financial Institution for any of the following U.S. indicia:
Identification of the Account Holder as a U.S. citizen or resident;
Unambiguous indication of a U.S. place of birth;
Current U.S. mailing or residence address (including a U.S. post office box);
Current U.S. telephone number;
Standing instructions to transfer funds to an account maintained in the United States;
Currently effective power of attorney or signatory authority granted to a person with a U.S. address; or
An "in-care-of" or "hold mail" address that is the sole address the Reporting Portuguese Financial Institution has on file for the Account Holder. In the case of a Preexisting Individual Account that is a Lower Value Account, an "in-care-of" address outside the United States or "hold mail" address shall not be treated as U.S. indicia.
2 - If none of the U.S. indicia listed in subparagraph B(1) of this section are discovered in the electronic search, then no further action is required until there is a change in circumstances that results in one or more U.S. indicia being associated with the account, or the account becomes a High Value Account described in paragraph D of this section.
3 - If any of the U.S. indicia listed in subparagraph B(1) of this section are discovered in the electronic search, or if there is a change in circumstances that results in one or more U.S. indicia being associated with the account, then the Reporting Portuguese Financial Institution must treat the account as a U.S. Reportable Account unless it elects to apply subparagraph B(4) of this section and one of the exceptions in such subparagraph applies with respect to that account.
4 - Notwithstanding a finding of U.S. indicia under subparagraph B(1) of this section, a Reporting Portuguese Financial Institution is not required to treat an account as a U.S. Reportable Account if:
Where the Account Holder information unambiguously indicates a U.S. place of birth, the Reporting Portuguese Financial Institution obtains, or has previously reviewed and maintains a record of:
(1) A self-certification that the Account Holder is neither a U.S. citizen nor a U.S. resident for tax purposes (which may be on an IRS Form W-8 or other similar agreed form);
(2) A non-U.S. passport or other government-issued identification evidencing the Account Holder's citizenship or nationality in a country other than the United States; and
(3) A copy of the Account Holder's Certificate of Loss of Nationality of the United States or a reasonable explanation of:
(a) The reason the Account Holder does not have such a certificate despite relinquishing U.S. citizenship; or
(b) The reason the Account Holder did not obtain U.S. citizenship at birth.
Where the Account Holder information contains a current U.S. mailing or residence address, or one or more U.S. telephone numbers that are the only telephone numbers associated with the account, the Reporting Portuguese Financial Institution obtains, or has previously reviewed and maintains a record of:
(1) A self-certification that the Account Holder is neither a U.S. citizen nor a U.S. resident for tax purposes (which may be on an IRS Form W-8 or other similar agreed form); and
(2) Documentary evidence, as defined in paragraph D of section VI of this Annex I, establishing the Account Holder's non-U.S. status.
Where the Account Holder information contains standing instructions to transfer funds to an account maintained in the United States, the Reporting Portuguese Financial Institution obtains, or has previously reviewed and maintains a record of:
(1) A self-certification that the Account Holder is neither a U.S. citizen nor a U.S. resident for tax purposes (which may be on an IRS Form W-8 or other similar agreed form); and
(2) Documentary evidence, as defined in paragraph D of section VI of this Annex I, establishing the Account Holder's non-U.S. status.
Where the Account Holder information contains a currently effective power of attorney or signatory authority granted to a person with a U.S. address, has an "in-care-of" address or "hold mail" address that is the sole address identified for the Account Holder, or has one or more U.S. telephone numbers (if a non-U.S. telephone number is also associated with the account), the Reporting Portuguese Financial Institution obtains, or has previously reviewed and maintains a record of:
(1) A self-certification that the Account Holder is neither a U.S. citizen nor a U.S. resident for tax purposes (which may be on an IRS Form W-8 or other similar agreed form); or
(2) Documentary evidence, as defined in paragraph D of section VI of this Annex I, establishing the Account Holder's non-U.S. status.
C. Additional Procedures Applicable to Preexisting Individual Accounts That Are Lower Value Accounts.
1 - Review of Preexisting Individual Accounts that are Lower Value Accounts for U.S. indicia must be completed by June 30, 2016.
2 - If there is a change of circumstances with respect to a Preexisting Individual Account that is a Lower Value Account that results in one or more U.S. indicia described in subparagraph B(1) of this section being associated with the account, then the Reporting Portuguese Financial Institution must treat the account as a U.S. Reportable Account unless subparagraph B(4) of this section applies.
3 - Except for Depository Accounts described in subparagraph A(4) of this section, any Preexisting Individual Account that has been identified as a U.S. Reportable Account under this section shall be treated as a U.S. Reportable Account in all subsequent years, unless the Account Holder ceases to be a Specified U.S. Person.
D. Enhanced Review Procedures for Preexisting Individual Accounts With a Balance or Value That Exceeds $1,000,000 as of June 30, 2014, or December 31 of 2015 or Any Subsequent Year ("High Value Accounts").
1 - Electronic Record Search. The Reporting Portuguese Financial Institution must review electronically searchable data maintained by the Reporting Portuguese Financial Institution for any of the U.S. indicia described in subparagraph B(1) of this section.
2 - Paper Record Search. If the Reporting Portuguese Financial Institution's electronically searchable databases include fields for, and capture all of the information described in, subparagraph D(3) of this section, then no further paper record search is required. If the electronic databases do not capture all of this information, then with respect to a High Value Account, the Reporting Portuguese Financial Institution must also review the current customer master file and, to the extent not contained in the current customer master file, the following documents associated with the account and obtained by the Reporting Portuguese Financial Institution within the last five years for any of the U.S. indicia described in subparagraph B(1) of this section:
The most recent documentary evidence collected with respect to the account;
The most recent account opening contract or documentation;
The most recent documentation obtained by the Reporting Portuguese Financial Institution pursuant to AML/KYC Procedures or for other regulatory purposes;
Any power of attorney or signature authority forms currently in effect; and
Any standing instructions to transfer funds currently in effect.
3 - Exception Where Databases Contain Sufficient Information. A Reporting Portuguese Financial Institution is not required to perform the paper record search described in subparagraph D(2) of this section if the Reporting Portuguese Financial Institution's electronically searchable information includes the following:
The Account Holder's nationality or residence status;
The Account Holder's residence address and mailing address currently on file with the Reporting Portuguese Financial Institution;
The Account Holder's telephone number(s) currently on file, if any, with the Reporting Portuguese Financial Institution;
Whether there are standing instructions to transfer funds in the account to another account (including an account at another branch of the Reporting Portuguese Financial Institution or another Financial Institution);
Whether there is a current "in-care-of" address or "hold mail" address for the Account Holder; and
Whether there is any power of attorney or signatory authority for the account.
4 - Relationship Manager Inquiry for Actual Knowl-edge. In addition to the electronic and paper record searches described above, the Reporting Portuguese Financial Institution must treat as a U.S. Reportable Account any High Value Account assigned to a relationship manager (including any Financial Accounts aggregated with such High Value Account) if the relationship manager has actual knowledge that the Account Holder is a Specified U.S. Person.
5 - Effect of Finding U.S. Indicia.
If none of the U.S. indicia listed in subparagraph B(1) of this section are discovered in the enhanced review of High Value Accounts described above, and the account is not identified as held by a Specified U.S. Person in subparagraph D(4) of this section, then no further action is required until there is a change in circumstances that results in one or more U.S. indicia being associated with the account.
If any of the U.S. indicia listed in subparagraph B(1) of this section are discovered in the enhanced review of High Value Accounts described above, or if there is a subsequent change in circumstances that results in one or more U.S. indicia being associated with the account, then the Reporting Portuguese Financial Institution must treat the account as a U.S. Reportable Account unless it elects to apply subparagraph B(4) of this section and one of the exceptions in such subparagraph applies with respect to that account.
Except for Depository Accounts described in subparagraph A(4) of this section, any Preexisting Individual Account that has been identified as a U.S. Reportable Account under this section shall be treated as a U.S. Reportable Account in all subsequent years, unless the Account Holder ceases to be a Specified U.S. Person.
E. Additional Procedures Applicable to High Value Accounts.
1 - If a Preexisting Individual Account is a High Value Account as of June 30, 2014, the Reporting Portuguese Financial Institution must complete the enhanced review procedures described in paragraph D of this section with respect to such account by June 30, 2015. If based on this review such account is identified as a U.S. Reportable Account on or before December 31, 2014, the Reporting Portuguese Financial Institution must report the required information about such account with respect to 2014 in the first report on the account and on an annual basis thereafter. In the case of an account identified as a U.S. Reportable Account after December 31, 2014 and on or before June 30, 2015, the Reporting Portuguese Financial Institution is not required to report information about such account with respect to 2014, but must report information about the account on an annual basis thereafter.
2 - If a Preexisting Individual Account is not a High Value Account as of June 30, 2014, but becomes a High Value Account as of the last day of 2015 or any subsequent calendar year, the Reporting Portuguese Financial Institution must complete the enhanced review procedures described in paragraph D of this section with respect to such account within six months after the last day of the calendar year in which the account becomes a High Value Account. If based on this review such account is identified as a U.S. Reportable Account, the Reporting Portuguese Financial Institution must report the required information about such account with respect to the year in which it is identified as a U.S. Reportable Account and subsequent years on an annual basis, unless the Account Holder ceases to be a Specified U.S. Person.
3 - Once a Reporting Portuguese Financial Institution applies the enhanced review procedures described in paragraph D of this section to a High Value Account, the Reporting Portuguese Financial Institution is not required to re-apply such procedures, other than the relationship manager inquiry described in subparagraph D(4) of this section, to the same High Value Account in any subsequent year.
4 - If there is a change of circumstances with respect to a High Value Account that results in one or more U.S. indicia described in subparagraph B(1) of this section being associated with the account, then the Reporting Portuguese Financial Institution must treat the account as a U.S. Reportable Account unless it elects to apply subparagraph B(4) of this section and one of the exceptions in such subparagraph applies with respect to that account.
5 - A Reporting Portuguese Financial Institution must implement procedures to ensure that a relationship manager identifies any change in circumstances of an account. For example, if a relationship manager is notified that the Account Holder has a new mailing address in the United States, the Reporting Portuguese Financial Institution is required to treat the new address as a change in circumstances and, if it elects to apply subparagraph B(4) of this section, is required to obtain the appropriate documentation from the Account Holder.
F. Preexisting Individual Accounts That Have Been Documented for Certain Other Purposes. A Reporting Portuguese Financial Institution that has previously obtained documentation from an Account Holder to establish the Account Holder's status as neither a U.S. citizen nor a U.S. resident in order to meet its obligations under a qualified intermediary, withholding foreign partnership, or withholding foreign trust agreement with the IRS, or to fulfill its obligations under chapter 61 of Title 26 of the United States Code, is not required to perform the procedures described in subparagraph B(1) of this section with respect to Lower Value Accounts or subparagraphs D(1) through D(3) of this section with respect to High Value Accounts.
III. New Individual Accounts. The following rules and procedures apply for purposes of identifying U.S. Reportable Accounts among Financial Accounts held by individuals and opened on or after July 1, 2014 ("New Individual Accounts").
A. Accounts Not Required to Be Reviewed, Identified, or Reported. Unless the Reporting Portuguese Financial Institution elects otherwise, either with respect to all New Individual Accounts or, separately, with respect to any clearly identified group of such accounts, where the implementing rules in Portugal provide for such an election, the following New Individual Accounts are not required to be reviewed, identified, or reported as U.S. Reportable Accounts:
1 - A Depository Account unless the account balance exceeds $50,000 at the end of any calendar year or other appropriate reporting period.
2 - A Cash Value Insurance Contract unless the Cash Value exceeds $50,000 at the end of any calendar year or other appropriate reporting period.
B. Other New Individual Accounts. With respect to New Individual Accounts not described in paragraph A of this section, upon account opening (or within 90 days after the end of the calendar year in which the account ceases to be described in paragraph A of this section), the Reporting Portuguese Financial Institution must obtain a self-certification, which may be part of the account opening documentation, that allows the Reporting Portuguese Financial Institution to determine whether the Account Holder is resident in the United States for tax purposes (for this purpose, a U.S. citizen is considered to be resident in the United States for tax purposes, even if the Account Holder is also a tax resident of another jurisdiction) and confirm the reasonableness of such self-certification based on the information obtained by the Reporting Portuguese Financial Institution in connection with the opening of the account, including any documentation collected pursuant to AML/KYC Procedures.
1 - If the self-certification establishes that the Account Holder is resident in the United States for tax purposes, the Reporting Portuguese Financial Institution must treat the account as a U.S. Reportable Account and obtain a self-certification that includes the Account Holder's U.S. TIN (which may be an IRS Form W-9 or other similar agreed form).
2 - If there is a change of circumstances with respect to a New Individual Account that causes the Reporting Portuguese Financial Institution to know, or have reason to know, that the original self-certification is incorrect or unreliable, the Reporting Portuguese Financial Institution cannot rely on the original self-certification and must obtain a valid self-certification that establishes whether the Account Holder is a U.S. citizen or resident for U.S. tax purposes. If the Reporting Portuguese Financial Institution is unable to obtain a valid self-certification, the Reporting Portuguese Financial Institution must treat the account as a U.S. Reportable Account.
IV. Preexisting Entity Accounts. The following rules and procedures apply for purposes of identifying U.S. Reportable Accounts and accounts held by Nonparticipating Financial Institutions among Preexisting Accounts held by Entities ("Preexisting Entity Accounts").
A. Entity Accounts Not Required to Be Reviewed, Identified or Reported. Unless the Reporting Portuguese Financial Institution elects otherwise, either with respect to all Preexisting Entity Accounts or, separately, with respect to any clearly identified group of such accounts, where the implementing rules in Portugal provide for such an election, a Preexisting Entity Account with an account balance or value that does not exceed $250,000 as of June 30, 2014, is not required to be reviewed, identified, or reported as a U.S. Reportable Account until the account balance or value exceeds $1,000,000.
B. Entity Accounts Subject to Review. A Preexisting Entity Account that has an account balance or value that exceeds $250,000 as of June 30, 2014, and a Preexisting Entity Account that does not exceed $250,000 as of June 30, 2014 but the account balance or value of which exceeds $1,000,000 as of the last day of 2015 or any subsequent calendar year, must be reviewed in accordance with the procedures set forth in paragraph D of this section.
C. Entity Accounts With Respect to Which Reporting Is Required. With respect to Preexisting Entity Accounts described in paragraph B of this section, only accounts that are held by one or more Entities that are Specified U.S. Persons, or by Passive NFFEs with one or more Controlling Persons who are U.S. citizens or residents, shall be treated as U.S. Reportable Accounts. In addition, accounts held by Nonparticipating Financial Institutions shall be treated as accounts for which aggregate payments as described in subparagraph 1(b) of article 4 of the Agreement are reported to the Portuguese Competent Authority.
D. Review Procedures for Identifying Entity Accounts With Respect to Which Reporting Is Required. For Preexisting Entity Accounts described in paragraph B of this section, the Reporting Portuguese Financial Institution must apply the following review procedures to determine whether the account is held by one or more Specified U.S. Persons, by Passive NFFEs with one or more Controlling Persons who are U.S. citizens or residents, or by Nonparticipating Financial Institutions:
1 - Determine Whether the Entity Is a Specified U.S. Person.
Review information maintained for regulatory or customer relationship purposes (including information collected pursuant to AML/KYC Procedures) to determine whether the information indicates that the Account Holder is a U.S. Person. For this purpose, information indicating that the Account Holder is a U.S. Person includes a U.S. place of incorporation or organization, or a U.S. address.
If the information indicates that the Account Holder is a U.S. Person, the Reporting Portuguese Financial Institution must treat the account as a U.S. Reportable Account unless it obtains a self-certification from the Account Holder (which may be on an IRS Form W-8 or W-9, or a similar agreed form), or reasonably determines based on information in its possession or that is publicly available, that the Account Holder is not a Specified U.S. Person.
2 - Determine Whether a Non-U.S. Entity Is a Financial Institution.
Review information maintained for regulatory or customer relationship purposes (including information collected pursuant to AML/KYC Procedures) to determine whether the information indicates that the Account Holder is a Financial Institution.
If the information indicates that the Account Holder is a Financial Institution, or the Reporting Portuguese Financial Institution verifies the Account Holder's Global Intermediary Identification Number on the published IRS FFI list, then the account is not a U.S. Reportable Account.
3 - Determine Whether a Financial Institution Is a Nonparticipating Financial Institution Payments to Which Are Subject to Aggregate Reporting Under Subparagraph 1(b) of article 4 of the Agreement.
Subject to subparagraph D(3)(b) of this section, a Reporting Portuguese Financial Institution may determine that the Account Holder is a Portuguese Financial Institution or other Partner Jurisdiction Financial Institution if the Reporting Portuguese Financial Institution reasonably determines that the Account Holder has such status on the basis of the Account Holder's Global Intermediary Identification Number on the published IRS FFI list or other information that is publicly available or in the possession of the Reporting Portuguese Financial Institution, as applicable. In such case, no further review, identification, or reporting is required with respect to the account.
If the Account Holder is a Portuguese Financial Institution or other Partner Jurisdiction Financial Institution treated by the IRS as a Nonparticipating Financial Institution, then the account is not a U.S. Reportable Account, but payments to the Account Holder must be reported as contemplated in subparagraph 1(b) of article 4 of the Agreement.
If the Account Holder is not a Portuguese Financial Institution or other Partner Jurisdiction Financial Institution, then the Reporting Portuguese Financial Institution must treat the Account Holder as a Nonparticipating Financial Institution payments to which are reportable under subparagraph 1(b) of article 4 of the Agreement, unless the Reporting Portuguese Financial Institution:
(1) Obtains a self-certification (which may be on an IRS Form W-8 or similar agreed form) from the Account Holder that it is a certified deemed-compliant FFI, or an exempt beneficial owner, as those terms are defined in relevant U.S. Treasury Regulations; or
(2) In the case of a participating FFI or registered deemed-compliant FFI, verifies the Account Holder's Global Intermediary Identification Number on the published IRS FFI list.
4 - Determine Whether an Account Held by an NFFE Is a U.S. Reportable Account. With respect to an Account Holder of a Preexisting Entity Account that is not identified as either a U.S. Person or a Financial Institution, the Reporting Portuguese Financial Institution must identify (i) whether the Account Holder has Controlling Persons, (ii) whether the Account Holder is a Passive NFFE, and (iii) whether any of the Controlling Persons of the Account Holder is a U.S. citizen or resident. In making these determinations the Reporting Portuguese Financial Institution must follow the guidance in subparagraphs D(4)(a) through D(4)(d) of this section in the order most appropriate under the circumstances.
For purposes of determining the Controlling Persons of an Account Holder, a Reporting Portuguese Financial Institution may rely on information collected and maintained pursuant to AML/KYC Procedures.
For purposes of determining whether the Account Holder is a Passive NFFE, the Reporting Portuguese Financial Institution must obtain a self-certification (which may be on an IRS Form W-8 or W-9, or on a similar agreed form) from the Account Holder to establish its status, unless it has information in its possession or that is publicly available, based on which it can reasonably determine that the Account Holder is an Active NFFE.
For purposes of determining whether a Controlling Person of a Passive NFFE is a U.S. citizen or resident for tax purposes, a Reporting Portuguese Financial Institution may rely on:
(1) Information collected and maintained pursuant to AML/KYC Procedures in the case of a Preexisting Entity Account held by one or more NFFEs with an account balance or value that does not exceed $1,000,000; or
(2) A self-certification (which may be on an IRS Form W-8 or W-9, or on a similar agreed form) from the Account Holder or such Controlling Person in the case of a Preexisting Entity Account held by one or more NFFEs with an account balance or value that exceeds $1,000,000.
If any Controlling Person of a Passive NFFE is a U.S. citizen or resident, the account shall be treated as a U.S. Reportable Account.
E. Timing of Review and Additional Procedures Applicable to Preexisting Entity Accounts.
1 - Review of Preexisting Entity Accounts with an account balance or value that exceeds $250,000 as of June 30, 2014 must be completed by June 30, 2016.
2 - Review of Preexisting Entity Accounts with an account balance or value that does not exceed $250,000 as of June 30, 2014, but exceeds $1,000,000 as of December 31 of 2015 or any subsequent year, must be completed within six months after the last day of the calendar year in which the account balance or value exceeds $1,000,000.
3 - If there is a change of circumstances with respect to a Preexisting Entity Account that causes the Reporting Portuguese Financial Institution to know, or have reason to know, that the self-certification or other documentation associated with an account is incorrect or unreliable, the Reporting Portuguese Financial Institution must redetermine the status of the account in accordance with the procedures set forth in paragraph D of this section.
V. New Entity Accounts. The following rules and procedures apply for purposes of identifying U.S. Reportable Accounts and accounts held by Nonparticipating Financial Institutions among Financial Accounts held by Entities and opened on or after July 1, 2014 ("New Entity Accounts").
A. Entity Accounts Not Required to Be Reviewed, Identified or Reported. Unless the Reporting Portuguese Financial Institution elects otherwise, either with respect to all New Entity Accounts or, separately, with respect to any clearly identified group of such accounts, where the implementing rules in Portugal provide for such election, a credit card account or a revolving credit facility treated as a New Entity Account is not required to be reviewed, identified, or reported, provided that the Reporting Portuguese Financial Institution maintaining such account implements policies and procedures to prevent an account balance owed to the Account Holder that exceeds $50,000.
B. Other New Entity Accounts. With respect to New Entity Accounts not described in paragraph A of this section, the Reporting Portuguese Financial Institution must determine whether the Account Holder is: (i) a Specified U.S. Person; (ii) a Portuguese Financial Institution or other Partner Jurisdiction Financial Institution; (iii) a participating FFI, a deemed-compliant FFI, or an exempt beneficial owner, as those terms are defined in relevant U.S. Treasury Regulations; or (iv) an Active NFFE or Passive NFFE.
1 - Subject to subparagraph B(2) of this section, a Reporting Portuguese Financial Institution may determine that the Account Holder is an Active NFFE, a Portuguese Financial Institution, or other Partner Jurisdiction Financial Institution if the Reporting Portuguese Financial Institution reasonably determines that the Account Holder has such status on the basis of the Account Holder's Global Intermediary Identification Number or other information that is publicly available or in the possession of the Reporting Portuguese Financial Institution, as applicable.
2 - If the Account Holder is a Portuguese Financial Institution or other Partner Jurisdiction Financial Institution treated by the IRS as a Nonparticipating Financial Institution, then the account is not a U.S. Reportable Account, but payments to the Account Holder must be reported as contemplated in subparagraph 1(b) of article 4 of the Agreement.
3 - In all other cases, a Reporting Portuguese Financial Institution must obtain a self-certification from the Account Holder to establish the Account Holder's status. Based on the self-certification, the following rules apply:
If the Account Holder is a Specified U.S. Person, the Reporting Portuguese Financial Institution must treat the account as a U.S. Reportable Account.
If the Account Holder is a Passive NFFE, the Reporting Portuguese Financial Institution must identify the Controlling Persons as determined under AML/KYC Procedures, and must determine whether any such person is a U.S. citizen or resident on the basis of a self-certification from the Account Holder or such person. If any such person is a U.S. citizen or resident, the Reporting Portuguese Financial Institution must treat the account as a U.S. Reportable Account.
If the Account Holder is: (i) a U.S. Person that is not a Specified U.S. Person; (ii) subject to subparagraph B(3)(d) of this section, a Portuguese Financial Institution or other Partner Jurisdiction Financial Institution; (iii) a participating FFI, a deemed-compliant FFI, or an exempt beneficial owner, as those terms are defined in relevant U.S. Treasury Regulations; (iv) an Active NFFE; or (v) a Passive NFFE none of the Controlling Persons of which is a U.S. citizen or resident, then the account is not a U.S. Reportable Account, and no reporting is required with respect to the account.
If the Account Holder is a Nonparticipating Financial Institution (including a Portuguese Financial Institution or other Partner Jurisdiction Financial Institution treated by the IRS as a Nonparticipating Financial Institution), then the account is not a U.S. Reportable Account, but payments to the Account Holder must be reported as contemplated in subparagraph 1(b) of article 4 of the Agreement.
VI. Special Rules and Definitions. The following additional rules and definitions apply in implementing the due diligence procedures described above:
A. Reliance on Self-Certifications and Documentary Evidence. A Reporting Portuguese Financial Institution may not rely on a self-certification or documentary evidence if the Reporting Portuguese Financial Institution knows or has reason to know that the self-certification or documentary evidence is incorrect or unreliable.
B. Definitions. The following definitions apply for purposes of this Annex I.
1 - AML/KYC Procedures. "AML/KYC Procedures" means the customer due diligence procedures of a Reporting Portuguese Financial Institution pursuant to the anti-money laundering or similar requirements of Portugal to which such Reporting Portuguese Financial Institution is subject.
2 - NFFE. An "NFFE" means any Non-U.S. Entity that is not an FFI as defined in relevant U.S. Treasury Regulations or is an Entity described in subparagraph B(4)(j) of this section, and also includes any Non-U.S. Entity that is established in Portugal or another Partner Jurisdiction and that is not a Financial Institution.
3 - Passive NFFE. A "Passive NFFE" means any NFFE that is not (i) an Active NFFE, or (ii) a withholding foreign partnership or withholding foreign trust pursuant to relevant U.S. Treasury Regulations.
4 - Active NFFE. An "Active NFFE" means any NFFE that meets any of the following criteria:
Less than 50 percent of the NFFE's gross income for the preceding calendar year or other appropriate reporting period is passive income and less than 50 percent of the assets held by the NFFE during the preceding calendar year or other appropriate reporting period are assets that produce or are held for the production of passive income;
The stock of the NFFE is regularly traded on an established securities market or the NFFE is a Related Entity of an Entity the stock of which is regularly traded on an established securities market;
The NFFE is organized in a U.S. Territory and all of the owners of the payee are bona fide residents of that U.S. Territory;
The NFFE is a government (other than the U.S. government), a political subdivision of such government (which, for the avoidance of doubt, includes a state, province, county, or municipality), or a public body performing a function of such government or a political subdivision thereof, a government of a U.S. Territory, an international organization, a non-U.S. central bank of issue, or an Entity wholly owned by one or more of the foregoing;
Substantially all of the activities of the NFFE consist of holding (in whole or in part) the outstanding stock of, or providing financing and services to, one or more subsidiaries that engage in trades or businesses other than the business of a Financial Institution, except that an entity shall not qualify for NFFE status if the entity functions (or holds itself out) as an investment fund, such as a private equity fund, venture capital fund, leveraged buyout fund, or any investment vehicle whose purpose is to acquire or fund companies and then hold interests in those companies as capital assets for investment purposes;
The NFFE is not yet operating a business and has no prior operating history, but is investing capital into assets with the intent to operate a business other than that of a Financial Institution, provided that the NFFE shall not qualify for this exception after the date that is 24 months after the date of the initial organization of the NFFE;
The NFFE was not a Financial Institution in the past five years, and is in the process of liquidating its assets or is reorganizing with the intent to continue or recommence operations in a business other than that of a Financial Institution;
The NFFE primarily engages in financing and hedging transactions with, or for, Related Entities that are not Financial Institutions, and does not provide financing or hedging services to any Entity that is not a Related Entity, provided that the group of any such Related Entities is primarily engaged in a business other than that of a Financial Institution;
The NFFE is an "excepted NFFE" as described in relevant U.S. Treasury Regulations; or
The NFFE meets all of the following requirements:
i. It is established and operated in its jurisdiction of residence exclusively for religious, charitable, scientific, artistic, cultural, athletic, or educational purposes; or it is established and operated in its jurisdiction of residence and it is a professional organization, business league, chamber of commerce, labor organization, agricultural or horticultural organization, civic league or an organization operated exclusively for the promotion of social welfare;
ii. It is exempt from income tax in its jurisdiction of residence;
iii. It has no shareholders or members who have a proprietary or beneficial interest in its income or assets;
iv. The applicable laws of the NFFE's jurisdiction of residence or the NFFE's formation documents do not permit any income or assets of the NFFE to be distributed to, or applied for the benefit of, a private person or non-charitable Entity other than pursuant to the conduct of the NFFE's charitable activities, or as payment of reasonable compensation for services rendered, or as payment representing the fair market value of property which the NFFE has purchased; and
v. The applicable laws of the NFFE's jurisdiction of residence or the NFFE's formation documents require that, upon the NFFE's liquidation or dissolution, all of its assets be distributed to a governmental entity or other non-profit organization, or escheat to the government of the NFFE's jurisdiction of residence or any political subdivision thereof.
5 - Preexisting Account. A "Preexisting Account" means a Financial Account maintained by a Reporting Financial Institution as of June 30, 2014.
C. Account Balance Aggregation and Currency Translation Rules.
1 - Aggregation of Individual Accounts. For purposes of determining the aggregate balance or value of Financial Accounts held by an individual, a Reporting Portuguese Financial Institution is required to aggregate all Financial Accounts maintained by the Reporting Portuguese Financial Institution, or by a Related Entity, but only to the extent that the Reporting Portuguese Financial Institution's computerized systems link the Financial Accounts by reference to a data element such as client number or taxpayer identification number, and allow account balances or values to be aggregated. Each holder of a jointly held Financial Account shall be attributed the entire balance or value of the jointly held Financial Account for purposes of applying the aggregation requirements described in this paragraph 1.
2 - Aggregation of Entity Accounts. For purposes of determining the aggregate balance or value of Financial Accounts held by an Entity, a Reporting Portuguese Financial Institution is required to take into account all Financial Accounts that are maintained by the Reporting Portuguese Financial Institution, or by a Related Entity, but only to the extent that the Reporting Portuguese Financial Institution's computerized systems link the Financial Accounts by reference to a data element such as client number or taxpayer identification number, and allow account balances or values to be aggregated.
3 - Special Aggregation Rule Applicable to Relationship Managers. For purposes of determining the aggregate balance or value of Financial Accounts held by a person to determine whether a Financial Account is a High Value Account, a Reporting Portuguese Financial Institution is also required, in the case of any Financial Accounts that a relationship manager knows, or has reason to know, are directly or indirectly owned, controlled, or established (other than in a fiduciary capacity) by the same person, to aggregate all such accounts.
4 - Currency Translation Rule. For purposes of determining the balance or value of Financial Accounts denominated in a currency other than the U.S. dollar, a Reporting Portuguese Financial Institution must convert the U.S. dollar threshold amounts described in this Annex I into such currency using a published spot rate determined as of the last day of the calendar year preceding the year in which the Reporting Portuguese Financial Institution is determining the balance or value.
D. Documentary Evidence. For purposes of this Annex I, acceptable documentary evidence includes any of the following:
1 - A certificate of residence issued by an authorized government body (for example, a government or agency thereof, or a municipality) of the jurisdiction in which the payee claims to be a resident.
2 - With respect to an individual, any valid identification issued by an authorized government body (for example, a government or agency thereof, or a municipality), that includes the individual's name and is typically used for identification purposes.
3 - With respect to an Entity, any official documentation issued by an authorized government body (for example, a government or agency thereof, or a municipality) that includes the name of the Entity and either the address of its principal office in the jurisdiction (or U.S. Territory) in which it claims to be a resident or the jurisdiction (or U.S. Territory) in which the Entity was incorporated or organized.
4 - With respect to a Financial Account maintained in a jurisdiction with anti-money laundering rules that have been approved by the IRS in connection with a QI agreement (as described in relevant U.S. Treasury Regulations), any of the documents, other than a Form W-8 or W-9, referenced in the jurisdiction's attachment to the QI agreement for identifying individuals or Entities.
5 - Any financial statement, third-party credit report, bankruptcy filing, or U.S. Securities and Exchange Commission report.
E. Alternative Procedures for Financial Accounts Held by Individual Beneficiaries of a Cash Value Insurance Contract. A Reporting Portuguese Financial Institution may presume that an individual beneficiary (other than the owner) of a Cash Value Insurance Contract receiving a death benefit is not a Specified U.S. Person and may treat such Financial Account as other than a U.S. Reportable Account unless the Reporting Portuguese Financial Institution has actual knowledge, or reason to know, that the beneficiary is a Specified U.S. Person. A Reporting Portuguese Financial Institution has reason to know that a beneficiary of a Cash Value Insurance Contract is a Specified U.S. Person if the information collected by the Reporting Portuguese Financial Institution and associated with the beneficiary contains U.S. indicia as described in subparagraph (B)(1) of section II of this Annex I. If a Reporting Portuguese Financial Institution has actual knowledge, or reason to know, that the beneficiary is a Specified U.S. Person, the Reporting Portuguese Financial Institution must follow the procedures in subparagraph B(3) of section II of this Annex I.
F. Reliance on Third Parties. Regardless of whether an election is made under paragraph C of section I of this Annex I, Portugal may permit Reporting Portuguese Financial Institutions to rely on due diligence procedures performed by third parties, to the extent provided in relevant U.S. Treasury Regulations.
ANNEX II
The following Entities shall be treated as exempt beneficial owners or deemed-compliant FFIs, as the case may be, and the following accounts are excluded from the definition of Financial Accounts.
This Annex II may be modified by a mutual written decision entered into between the Competent Authorities of Portugal and the United States: (1) to include additional Entities and accounts that present a low risk of being used by U.S. Persons to evade U.S. tax and that have similar characteristics to the Entities and accounts described in this Annex II as of the date of signature of the Agreement; or (2) to remove Entities and accounts that, due to changes in circumstances, no longer present a low risk of being used by U.S. Persons to evade U.S. tax. Any such addition or removal shall be effective on the date of signature of the mutual decision, unless otherwise provided therein. Procedures for reaching such a mutual decision may be included in the mutual agreement or arrangement described in paragraph 6 of article 3 of the Agreement.
I. Exempt Beneficial Owners other than Funds. The following Entities shall be treated as Non-Reporting Portuguese Financial Institutions and as exempt beneficial owners for purposes of sections 1471 and 1472 of the U.S. Internal Revenue Code, other than with respect to a payment that is derived from an obligation held in connection with a commercial financial activity of a type engaged in by a Specified Insurance Company, Custodial Institution, or Depository Institution.
A. Governmental Entity. The government of Portugal, any political subdivision of Portugal (which, for the avoidance of doubt, includes a state, province, county, or municipality), or any wholly owned agency or instrumentality of Portugal or any one or more of the foregoing (each, a "Portuguese Governmental Entity"). This category is comprised of the integral parts, controlled entities, and political subdivisions of Portugal.
1 - An integral part of Portugal means any person, organization, agency, bureau, fund, instrumentality, or other body, however designated, that constitutes a governing authority of Portugal. The net earnings of the governing authority must be credited to its own account or to other accounts of Portugal, with no portion inuring to the benefit of any private person. An integral part does not include any individual who is a sovereign, official, or administrator acting in a private or personal capacity.
2 - A controlled entity means an Entity that is separate in form from Portugal or that otherwise constitutes a separate juridical entity, provided that:
The Entity is wholly owned and controlled by one or more Portuguese Governmental Entities directly or through one or more controlled entities;
The Entity's net earnings are credited to its own account or to the accounts of one or more Portuguese Governmental Entities, with no portion of its income inuring to the benefit of any private person; and
The Entity's assets vest in one or more Portuguese Governmental Entities upon dissolution.
3 - Income does not inure to the benefit of private persons if such persons are the intended beneficiaries of a governmental program, and the program activities are performed for the general public with respect to the common welfare or relate to the administration of some phase of government. Notwithstanding the foregoing, however, income is considered to inure to the benefit of private persons if the income is derived from the use of a governmental entity to conduct a commercial business, such as a commercial banking business, that provides financial services to private persons.
B. International Organization. Any international organization or wholly owned agency or instrumentality thereof. This category includes any intergovernmental organization (including a supranational organization) (1) that is comprised primarily of non-U.S. governments; (2) that has in effect a headquarters agreement with Portugal; and (3) the income of which does not inure to the benefit of private persons.
C. Central Bank. An institution that is by law or government sanction the principal authority, other than the government of Portugal itself, issuing instruments intended to circulate as currency. Such an institution may include an instrumentality that is separate from the government of Portugal, whether or not owned in whole or in part by Portugal.
II. Funds that Qualify as Exempt Beneficial Owners. The following Entities shall be treated as Non-Reporting Portuguese Financial Institutions and as exempt beneficial owners for purposes of sections 1471 and 1472 of the U.S. Internal Revenue Code.
A. Treaty-Qualified Retirement Fund. A fund established in Portugal, provided that the fund is entitled to benefits under an income tax treaty between Portugal and the United States on income that it derives from sources within the United States (or would be entitled to such benefits if it derived any such income) as a resident of Portugal that satisfies any applicable limitation on benefits requirement, and is operated principally to administer or provide pension or retirement benefits.
B. Broad Participation Retirement Fund. A fund established in Portugal to provide retirement, disability, or death benefits, or any combination thereof, to beneficiaries that are current or former employees (or persons designated by such employees) of one or more employers in consideration for services rendered, provided that the fund:
1 - Does not have a single beneficiary with a right to more than five percent of the fund's assets;
2 - Is subject to government regulation and provides annual information reporting about its beneficiaries to the relevant tax authorities in Portugal; and
3 - Satisfies at least one of the following requirements:
The fund is generally exempt from tax in Portugal on investment income under the laws of Portugal due to its status as a retirement or pension plan;
The fund receives at least 50 percent of its total contributions (other than transfers of assets from other plans described in paragraphs A through D of this section or from retirement and pension accounts described in subparagraph A(1) of section V of this Annex II) from the sponsoring employers;
Distributions or withdrawals from the fund are allowed only upon the occurrence of specified events related to retirement, disability, or death (except rollover distributions to other retirement funds described in paragraphs A through D of this section or retirement and pension accounts described in subparagraph A(1) of section V of this Annex II), or penalties apply to distributions or withdrawals made before such specified events; or
Contributions (other than certain permitted make-up contributions) by employees to the fund are limited by reference to earned income of the employee or may not exceed $50,000 annually, applying the rules set forth in Annex I for account aggregation and currency translation.
C. Narrow Participation Retirement Fund. A fund established in Portugal to provide retirement, disability, or death benefits to beneficiaries that are current or former employees (or persons designated by such employees) of one or more employers in consideration for services rendered, provided that:
1 - The fund has fewer than 50 participants;
2 - The fund is sponsored by one or more employers that are not Investment Entities or Passive NFFEs;
3 - The employee and employer contributions to the fund (other than transfers of assets from treaty-qualified retirement funds described in paragraph A of this section or retirement and pension accounts described in subparagraph A(1) of section V of this Annex II) are limited by reference to earned income and compensation of the employee, respectively;
4 - Participants that are not residents of Portugal are not entitled to more than 20 percent of the fund's assets; and
5 - The fund is subject to government regulation and provides annual information reporting about its beneficiaries to the relevant tax authorities in Portugal.
D. Pension Fund of an Exempt Beneficial Owner. A fund established in Portugal by an exempt beneficial owner to provide retirement, disability, or death benefits to beneficiaries or participants that are current or former employees of the exempt beneficial owner (or persons designated by such employees), or that are not current or former employees, if the benefits provided to such beneficiaries or participants are in consideration of personal services performed for the exempt beneficial owner.
E. Investment Entity Wholly Owned by Exempt Beneficial Owners. An Entity that is a Portuguese Financial Institution solely because it is an Investment Entity, provided that each direct holder of an Equity Interest in the Entity is an exempt beneficial owner, and each direct holder of a debt interest in such Entity is either a Depository Institution (with respect to a loan made to such Entity) or an exempt beneficial owner.
III. Small or Limited Scope Financial Institutions that Qualify as Deemed-Compliant FFIs. The following Financial Institutions are Non-Reporting Portuguese Financial Institutions that shall be treated as deemed-compliant FFIs for purposes of section 1471 of the U.S. Internal Revenue Code.
A. Financial Institution with a Local Client Base. A Financial Institution satisfying the following requirements:
1 - The Financial Institution must be licensed and regulated as a financial institution under the laws of Portugal;
2 - The Financial Institution must have no fixed place of business outside of Portugal. For this purpose, a fixed place of business does not include a location that is not advertised to the public and from which the Financial Institution performs solely administrative support functions;
3 - The Financial Institution must not solicit customers or Account Holders outside Portugal. For this purpose, a Financial Institution shall not be considered to have solicited customers or Account Holders outside Portugal merely because the Financial Institution (a) operates a website, provided that the website does not specifically indicate that the Financial Institution provides Financial Accounts or services to nonresidents, and does not otherwise target or solicit U.S. customers or Account Holders, or (b) advertises in print media or on a radio or television station that is distributed or aired primarily within Portugal but is also incidentally distributed or aired in other countries, provided that the advertisement does not specifically indicate that the Financial Institution provides Financial Accounts or services to nonresidents, and does not otherwise target or solicit U.S. customers or Account Holders;
4 - The Financial Institution must be required under the laws of Portugal to identify resident Account Holders for purposes of either information reporting or withholding of tax with respect to Financial Accounts held by residents or for purposes of satisfying Portugal's AML due diligence requirements;
5 - At least 98 percent of the Financial Accounts by value maintained by the Financial Institution must be held by residents (including residents that are Entities) of Portugal or a Member State of the European Union;
6 - Beginning on or before July 1, 2014, the Financial Institution must have policies and procedures, consistent with those set forth in Annex I, to prevent the Financial Institution from providing a Financial Account to any Nonparticipating Financial Institution and to monitor whether the Financial Institution opens or maintains a Financial Account for any Specified U.S. Person who is not a resident of Portugal (including a U.S. Person that was a resident of Portugal when the Financial Account was opened but subsequently ceases to be a resident of Portugal) or any Passive NFFE with Controlling Persons who are U.S. residents or U.S. citizens who are not residents of Portugal;
7 - Such policies and procedures must provide that if any Financial Account held by a Specified U.S. Person who is not a resident of Portugal or by a Passive NFFE with Controlling Persons who are U.S. residents or U.S. citizens who are not residents of Portugal is identified, the Financial Institution must report such Financial Account as would be required if the Financial Institution were a Reporting Portuguese Financial Institution (including by following the applicable registration requirements on the IRS FATCA registration website) or close such Financial Account;
8 - With respect to a Preexisting Account held by an individual who is not a resident of Portugal or by an Entity, the Financial Institution must review those Preexisting Accounts in accordance with the procedures set forth in Annex I applicable to Preexisting Accounts to identify any U.S. Reportable Account or Financial Account held by a Nonparticipating Financial Institution, and must report such Financial Account as would be required if the Financial Institution were a Reporting Portuguese Financial Institution (including by following the applicable registration requirements on the IRS FATCA registration website) or close such Financial Account;
9 - Each Related Entity of the Financial Institution that is a Financial Institution must be incorporated or organized in Portugal and, with the exception of any Related Entity that is a retirement fund described in paragraphs A through D of section II of this Annex II, satisfy the requirements set forth in this paragraph A; and
10 - The Financial Institution must not have policies or practices that discriminate against opening or maintaining Financial Accounts for individuals who are Specified U.S. Persons and residents of Portugal.
B. Local Bank. A Financial Institution satisfying the following requirements:
1 - The Financial Institution operates solely as (and is licensed and regulated under the laws of Portugal as) (a) a bank or (b) a credit union or similar cooperative credit organization that is operated without profit;
2 - The Financial Institution's business consists primarily of receiving deposits from and making loans to, with respect to a bank, unrelated retail customers and, with respect to a credit union or similar cooperative credit organization, members, provided that no member has a greater than five percent interest in such credit union or cooperative credit organization;
3 - The Financial Institution satisfies the requirements set forth in subparagraphs A(2) and A(3) of this section, provided that, in addition to the limitations on the website described in subparagraph A(3) of this section, the website does not permit the opening of a Financial Account;
4 - The Financial Institution does not have more than $175 million in assets on its balance sheet, and the Financial Institution and any Related Entities, taken together, do not have more than $500 million in total assets on their consolidated or combined balance sheets; and
5 - Any Related Entity must be incorporated or organized in Portugal, and any Related Entity that is a Financial Institution, with the exception of any Related Entity that is a retirement fund described in paragraphs A through D of section II of this Annex II or a Financial Institution with only low-value accounts described in paragraph C of this section, must satisfy the requirements set forth in this paragraph B.
C. Financial Institution with Only Low-Value Accounts. A Portuguese Financial Institution satisfying the following requirements:
1 - The Financial Institution is not an Investment Entity;
2 - No Financial Account maintained by the Financial Institution or any Related Entity has a balance or value in excess of $50,000, applying the rules set forth in Annex I for account aggregation and currency translation; and
3 - The Financial Institution does not have more than $50 million in assets on its balance sheet, and the Financial Institution and any Related Entities, taken together, do not have more than $50 million in total assets on their consolidated or combined balance sheets.
D. Qualified Credit Card Issuer. A Portuguese Financial Institution satisfying the following requirements:
1 - The Financial Institution is a Financial Institution solely because it is an issuer of credit cards that accepts deposits only when a customer makes a payment in excess of a balance due with respect to the card and the overpayment is not immediately returned to the customer; and
2 - Beginning on or before July 1, 2014, the Financial Institution implements policies and procedures to either prevent a customer deposit in excess of $50,000, or to ensure that any customer deposit in excess of $50,000, in each case applying the rules set forth in Annex I for account aggregation and currency translation, is refunded to the customer within 60 days. For this purpose, a customer deposit does not refer to credit balances to the extent of disputed charges but does include credit balances resulting from merchandise returns.
IV. Investment Entities that Qualify as Deemed-Compliant FFIs and Other Special Rules. The Financial Institutions described in paragraphs A through E of this section are Non-Reporting Portuguese Financial Institutions that shall be treated as deemed-compliant FFIs for purposes of section 1471 of the U.S. Internal Revenue Code. In addition, paragraph F of this section provides special rules applicable to an Investment Entity.
A. Trustee-Documented Trust. A trust established under the laws of Portugal to the extent that the trustee of the trust is a Reporting U.S. Financial Institution, Reporting Model 1 FFI, or Participating FFI and reports all information required to be reported pursuant to the Agreement with respect to all U.S. Reportable Accounts of the trust.
B. Sponsored Investment Entity and Controlled Foreign Corporation. A Financial Institution described in subparagraph B(1) or B(2) of this section having a sponsoring entity that complies with the requirements of subparagraph B(3) of this section.
1 - A Financial Institution is a sponsored investment entity if (a) it is an Investment Entity established in Portugal that is not a qualified intermediary, withholding foreign partnership, or withholding foreign trust pursuant to relevant U.S. Treasury Regulations; and (b) an Entity has agreed with the Financial Institution to act as a sponsoring entity for the Financial Institution.
2 - A Financial Institution is a sponsored controlled foreign corporation if (a) the Financial Institution is a controlled foreign corporation(1) organized under the laws of Portugal that is not a qualified intermediary, withholding foreign partnership, or withholding foreign trust pursuant to relevant U.S. Treasury Regulations; (b) the Financial Institution is wholly owned, directly or indirectly, by a Reporting U.S. Financial Institution that agrees to act, or requires an affiliate of the Financial Institution to act, as a sponsoring entity for the Financial Institution; and (c) the Financial Institution shares a common electronic account system with the sponsoring entity that enables the sponsoring entity to identify all Account Holders and payees of the Financial Institution and to access all account and customer information maintained by the Financial Institution including, but not limited to, customer identification information, customer documentation, account balance, and all payments made to the Account Holder or payee.
3 - The sponsoring entity complies with the following requirements:
The sponsoring entity is authorized to act on behalf of the Financial Institution (such as a fund manager, trustee, corporate director, or managing partner) to fulfill applicable registration requirements on the IRS FATCA registration website;
The sponsoring entity has registered as a sponsoring entity with the IRS on the IRS FATCA registration website;
If the sponsoring entity identifies any U.S. Reportable Accounts with respect to the Financial Institution, the sponsoring entity registers the Financial Institution pursuant to applicable registration requirements on the IRS FATCA registration website on or before the later of December 31, 2015 and the date that is 90 days after such a U.S. Reportable Account is first identified;
The sponsoring entity agrees to perform, on behalf of the Financial Institution, all due diligence, withholding, reporting, and other requirements that the Financial Institution would have been required to perform if it were a Reporting Portuguese Financial Institution;
The sponsoring entity identifies the Financial Institution and includes the identifying number of the Financial Institution (obtained by following applicable registration requirements on the IRS FATCA registration website) in all reporting completed on the Financial Institution's behalf; and
The sponsoring entity has not had its status as a sponsor revoked.
C. Sponsored, Closely Held Investment Vehicle. A Portu-guese Financial Institution satisfying the following requirements:
1 - The Financial Institution is a Financial Institution solely because it is an Investment Entity and is not a qualified intermediary, withholding foreign partnership, or withholding foreign trust pursuant to relevant U.S. Treasury Regulations;
2 - The sponsoring entity is a Reporting U.S. Financial Institution, Reporting Model 1 FFI, or Participating FFI, is authorized to act on behalf of the Financial Institution (such as a professional manager, trustee, or managing partner), and agrees to perform, on behalf of the Financial Institution, all due diligence, withholding, reporting, and other requirements that the Financial Institution would have been required to perform if it were a Reporting Portuguese Financial Institution;
3 - The Financial Institution does not hold itself out as an investment vehicle for unrelated parties;
4 - Twenty or fewer individuals own all of the debt interests and Equity Interests in the Financial Institution (disregarding debt interests owned by Participating FFIs and deemed-compliant FFIs and Equity Interests owned by an Entity if that Entity owns 100 percent of the Equity Interests in the Financial Institution and is itself a sponsored Financial Institution described in this paragraph C); and
5 - The sponsoring entity complies with the following requirements:
The sponsoring entity has registered as a sponsoring entity pursuant to applicable registration requirements;
The sponsoring entity agrees to perform, on behalf of the Financial Institution, all due diligence, withholding, reporting, and other requirements that the Financial Institution would have been required to perform if it were a Reporting Portuguese Financial Institution and retains documentation collected with respect to the Financial Institution for a period of six years;
The sponsoring entity identifies the Financial Institution in all reporting completed on the Financial Institution's behalf; and
The sponsoring entity has not had its status as a sponsor revoked.
D. Investment Advisors and Investment Managers.
An Investment Entity established in Portugal that is a Financial Institution solely because it (1) renders investment advice to, and acts on behalf of, or (2) manages portfolios for, and acts on behalf of, a customer for the purposes of investing, managing, or administering funds deposited in the name of the customer with a Financial Institution other than a Nonparticipating Financial Institution.
E. Collective Investment Vehicle. An Investment Entity established in Portugal that is regulated as a collective investment vehicle, provided that all of the interests in the collective investment vehicle (including debt interests in excess of $50,000) are held by or through one or more exempt beneficial owners, Active NFFEs described in subparagraph B(4) of section VI of Annex I, U.S. Persons that are not Specified U.S. Persons, or Financial Institutions that are not Nonparticipating Financial Institutions.
F. Special Rules. The following rules apply to an Investment Entity:
1 - With respect to interests in an Investment Entity that is a collective investment vehicle described in paragraph E of this section, the reporting obligations of any Investment Entity (other than a Financial Institution through which interests in the collective investment vehicle are held) shall be deemed fulfilled.
2 - With respect to interests in:
An Investment Entity established in a Partner Jurisdiction that is regulated as a collective investment vehicle, all of the interests in which (including debt interests in excess of $50,000) are held by or through one or more exempt beneficial owners, Active NFFEs described in subparagraph B(4) of section VI of Annex I, U.S. Persons that are not Specified U.S. Persons, or Financial Institutions that are not Nonparticipating Financial Institutions; or
An Investment Entity that is a qualified collective investment vehicle under relevant U.S. Treasury Regulations;
the reporting obligations of any Investment Entity that is a Portuguese Financial Institution (other than a Financial Institution through which interests in the collective investment vehicle are held) shall be deemed fulfilled.
3 - With respect to interests in an Investment Entity established in Portugal that is not described in paragraph E or subparagraph F(2) of this section, consistent with paragraph 3 of article 5 of the Agreement, the reporting obligations of all other Investment Entities with respect to such interests shall be deemed fulfilled if the information required to be reported by the first-mentioned Investment Entity pursuant to the Agreement with respect to such interests is reported by such Investment Entity or another person.
4 - An Investment Entity established in Portugal that is regulated as a collective investment vehicle shall not fail to qualify under paragraph E or subparagraph F(2) of this section, or otherwise as a deemed-compliant FFI, solely because the collective investment vehicle has issued physical shares in bearer form, provided that:
The collective investment vehicle has not issued, and does not issue, any physical shares in bearer form after December 31, 2012;
The collective investment vehicle retires all such shares upon surrender;
The collective investment vehicle (or a Reporting Portuguese Financial Institution) performs the due diligence procedures set forth in Annex I and reports any information required to be reported with respect to any such shares when such shares are presented for redemption or other payment; and
The collective investment vehicle has in place policies and procedures to ensure that such shares are redeemed or immobilized as soon as possible and in any event prior to January 1, 2017.
V. Accounts Excluded from Financial Accounts. The following accounts are excluded from the definition of Financial Accounts and therefore shall not be treated as U.S. Reportable Accounts.
A. Certain Savings Accounts.
1 - Retirement and Pension Account. A retirement or pension account maintained in Portugal that satisfies the following requirements under the laws of Portugal.
The account is subject to regulation as a personal retirement account or is part of a registered or regulated retirement or pension plan for the provision of retirement or pension benefits (including disability or death benefits);
The account is tax-favored (i.e., contributions to the account that would otherwise be subject to tax under the laws of Portugal are deductible or excluded from the gross income of the account holder or taxed at a reduced rate, or taxation of investment income from the account is deferred or taxed at a reduced rate);
Annual information reporting is required to the tax authorities in Portugal with respect to the account;
Withdrawals are conditioned on reaching a specified retirement age of the account holder, disability, death, or the conditions specified in Decree-Law 158/2002 or Decree-Law 12/2006, or penalties apply to withdrawals made before such specified events; and
Either (i) annual contributions are either limited to $50,000 or less or do not exceed $50,000, or (ii) there is a maximum lifetime contribution limit to the account of $1,000,000 or less, in each case applying the rules set forth in Annex I for account aggregation and currency translation.
2 - Non-Retirement Savings Accounts. An account maintained in Portugal (other than an insurance contract or Annuity Contract) that satisfies the following requirements under the laws of Portugal.
The account is subject to regulation as a savings vehicle for purposes other than for retirement;
The account is tax-favored (i.e., contributions to the account that would otherwise be subject to tax under the laws of Portugal are deductible or excluded from the gross income of the account holder or taxed at a reduced rate, or taxation of investment income from the account is deferred or taxed at a reduced rate);
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