FATCA in Spain

1. Treatment of Reporting Spanish Financial Institutions.
   Each Reporting Spanish Financial Institution is going to be treated as complying with, and not subject to withholding under section 1471 of the US Internal Revenue Code. This would be the case if Spain complies with its obligations under Articles 2 and 3 with respect to such Reporting Spanish Financial Institution.
   These Reporting Spanish Financial Institution:
2. a) gets identified as US Reportable Accounts and reports annually to the Spanish Competent Authority the information required to be reported in subparagraph 2(a) of Article 2 in the time and manner described in Article 3;
3. b) For the reports of both years, 2015 and 2016, they would report annually to the Spanish Competent Authority the name of each Nonparticipating Financial Institution to which it has made payments to and the aggregate amount of such payments made;
4. c) Complies with the registration requirements that are applicable to Financial Institutions of the Partner Jurisdictions;
5. d) To the extent that the Reporting Spanish Financial Institutions are-

(i) Acting like a qualified intermediary for the purposes of section 1441 of the US Internal Revenue Code, that has been elected to assume the primary withholding responsibility under chapter 3 of subtitle A of the US Internal Revenue Code,

(ii) A foreign partnership getting elected to act as a withholding foreign partnership which is for purposes of both sections 1441 and 1471 of the US Internal Revenue Code, or

(iii) A foreign trust getting elected to act as a withholding foreign trust being for purposes of both sections 1441 and 1471 of the US Internal Revenue Code, withholds 30% of any withholdable payment with US source made to any Non-participating Financial Institution; and

1. e) When a Reporting Spanish Financial Institution that is not described in subparagraph (d) of this paragraph and makes a payment of, or acts as an intermediary with respect to, a US Source Withholdable Payment to any Nonparticipating Financial Institution, the Reporting Spanish Financial Institution provides to any immediate payer of such a withholdable payment with US source, the information required for the purpose of withholding and reporting to occur with respect to such payment.

Notwithstanding the foregoing, a Reporting Spanish Financial Institution with respect to which the conditions of this paragraph are not satisfied shall not be subject to withholding under section 1471 of the US Internal Revenue Code unless such Reporting Spanish Financial Institution it has been identified by the IRS as a Nonparticipating Financial Institution pursuant to subparagraph 2(b) of Article 5.

2. Suspension of Rules Relating to Recalcitrant Accounts.
   The United States would not require a Reporting Spanish Financial Institution for withholding tax under section 1471 or 1472 of the US Internal Revenue Code. This shall be with respect to an account held by a recalcitrant account holder, as defined in section 1471(d)(6) of the US Internal Revenue Code, or to close such account, when the US Competent Authority receives the information that is set forth in subparagraph 2(a) of Article 2. This is subject to the provisions of Article 3, with respect to such account.
3. Specific Treatment of Retirement Plans. The United States shall treat as a deemed-compliant FFI or exempt beneficial owner, as appropriate, for purposes of section 1471 of the US Internal Revenue Code Spanish retirement plans that are being described and identified in Annex II. For this purpose, a Spanish retirement plan would include an entity established or located in as well as regulated in Spain, or a predetermined contractual or legal arrangement, operated to provide pension or retirement benefits or earn some income for providing these benefits under the laws of Spain. They are regulated with respect to contributions, distributions, reporting, sponsorship, and taxation.
4. Identification and Treatment of Other Deemed-Compliant FFIs and Exempt Beneficial Owners are where we would see the United States treat each Non-Reporting Spanish Financial Institution as a deemed-compliant FFI or as an exempt beneficial owner, as appropriate, for purposes of section 1471 of the US Internal Revenue Code.
5. Special Rules Regarding Related Entities That Are Nonparticipating Financial Institutions. If a Spanish Financial Institution, that otherwise meets the requirements of 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 a participating FFI or deemed-compliant FFI’s requirements for purposes of section 1471 of the U.S. Internal Revenue Code, such Spanish 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 for purposes of US Internal Revenue Codes’ section 1471, provided that:
6. a) The Spanish Financial Institution treats each such Related Entity or branch as a separate Nonparticipating Financial Institution for purposes of all the withholding and reporting requirements of the Agreement. Also, each of such Related Entity or branch identifies itself to withholding agents as a Nonparticipating Financial Institution;
7. b) Each of such Related Entity or branch identifies its US reports and accounts and then reports this information with respect to those accounts as per section 1471 of the US Internal Revenue Code. This would be to the extent that is permitted under the relevant laws pertaining to the Related Entity or branch; and
8. c) Such Related Entity or branch would not specifically solicit the US accounts that are held by persons who are not the resident or the jurisdiction where such Related Entity or branch are located or accounts held by Nonparticipating Financial Institutions. They would be the ones not established in the jurisdiction where such branch or Related Entity is located, and such branch or Related Entity would not be used by the Spanish Financial Institution or any other Related Entity for circumventing the obligations under this Agreement or under section 1471 of the US Internal Revenue Code, as appropriate.