SECTION 2. DEFINITIONS

For purposes of this Agreement, the terms listed below are defined as follows:

Sec. 2.01. Account Holder. An “account holder” means any person that has an account with a qualified or nonqualified intermediary. Unless the context otherwise requires, an account holder includes another intermediary (e.g., custodian, nominee or other agent) that has an account with the qualified or nonqualified intermediary (whether the other intermediary is acting as a qualified intermediary, nonqualified intermediary, or private arrangement intermediary) and any person who has an account with the other intermediary. The term includes both beneficial owners as defined in Treas. Reg. §1.1441–1(c)(6) and payees as determined under chapters 3 and 61 of the Code. Thus, for example, an account holder may include the owners of an entity classified as a partnership under U.S. tax principles that holds an account with a qualified or nonqualified intermediary.

Sec. 2.02. Agreement. “Agreement” means this agreement, all appendices and attachments to this agreement, and QI’s application to be a qualified intermediary. All such appendices, attachments, and QI’s application are incorporated into this Agreement by reference.

Sec. 2.03. Assumption of Withholding Responsibility. A QI that assumes primary withholding responsibility under chapter 3, or assumes reporting and withholding responsibility under chapter 61 and section 3406 of the Code, assumes the primary responsibility for deducting, withholding, and depositing the appropriate amount from a payment. Generally, a qualified intermediary’s assumption of primary withholding responsibility under chapter 3 of the Code, or the assumption of backup withholding responsibility under section 3406 of the Code, relieves the person who makes a payment to the qualified intermediary from the responsibility to withhold.

Sec. 2.04. Bank Deposit Interest. “Bank deposit interest” means interest described in section 871(i)(2)(A) of the Code.

Sec. 2.05. Beneficial Owner. A “beneficial owner” has the meaning given to that term in Treas. Reg. §1.1441-1(c)(6) and, if treaty benefits are claimed, Treas. Reg. §1.894–1T(d)(2)(ii).

Sec. 2.06. Chapter 3 of the Code. Any reference to “chapter 3 of the Code” means sections 1441, 1442, 1443, 1461, 1463, and 1464 of the Code.

Sec. 2.07. Chapter 61 of the Code. Any reference to “chapter 61 of the Code” means sections 6041, 6041A, 6042, 6044, 6045, 6050N, and 6050P of the Code.

Sec. 2.08. Class of Assets. “Class of assets” has the meanings given to the terms in sections 7 and 10 of this Agreement.

Sec. 2.09. Documentary Evidence. “Documentary evidence” means any documentation obtained pursuant to section 5 of this Agreement other than a Form W-8 or Form W-9.

Sec. 2.10. Documentation. “Documentation” means any valid Form W-8, Form W-9, or documentary evidence obtained pursuant to section 5 of this Agreement.

Sec. 2.11. Documented Account Holder/Payee. A “documented account holder” or “documented payee” is an account holder or payee for whom QI has obtained documentation pursuant to section 5 of this Agreement.

1999–5 I.R.B 35 February 1, 1999

Sec. 2.12. Exempt Recipient. An “exempt recipient” means, for interest, dividends, and royalties, a person described in Treas. Reg. §1.6049–4(c)(1)(ii). For broker proceeds, an exempt recipient is a person described in Treas. Reg. §§5f.6045-1(c)(3)(i)(B) or 1.6045–2(b)(2)(i).

Sec. 2.13. External Auditor. An “external auditor” is the auditor designated as QI’s (or any private arrangement intermediary’s) external auditor in Appendix B of this Agreement.

Sec. 2.14. Foreign Person. A “foreign person” is any person that is not a “United States person” and includes a “nonresident alien individual,” a “foreign corporation,” a “foreign partnership,” a “foreign trust,” and a “foreign estate,” as those terms are defined in section 7701 of the Code. Notwithstanding the preceding sentence, the term foreign person also includes a foreign branch of a U.S. person that provides QI with a qualified intermediary Form W-8IMY.

Sec. 2.15. Form W-8. “Form W-8” means IRS Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding; IRS Form W-8ECI, Certificate of Foreign Person’s Claim for Exemption From Withholding on Income Effectively Connected With the Conduct of a Trade or Business in the United States; IRS Form W-8EXP, Certificate of Foreign Governments and Other Foreign Organizations for United States Tax Withholding; and Form W-8IMY, Certificate of Foreign Intermediary, Foreign Partnership, and Certain U.S. Branches for United States Tax Withholding, as appropriate, or any acceptable substitute form.

Sec. 2.16. Form W-9. “Form W-9” means IRS Form W-9, Request for Taxpayer Identification Number and Certification, or any acceptable substitute.

Sec. 2.17. Form 945. “Form 945” means IRS Form 945, Annual Return of Withheld Federal Income Tax.

Sec. 2.18. Form 1042. “Form 1042” means an IRS Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons.

Sec. 2.19. Form 1042-S. “Form 1042-S” means an IRS Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding.

Sec. 2.20. Form 1042-S Reporting. “Form 1042-S reporting” means the reporting required on Form 1042-S.

Sec. 2.21. Form 1096. “Form 1096” means IRS Form 1096, Annual Summary and Transmittal of U.S. Information Returns.

Sec. 2.22. Form 1099. “Form 1099” means IRS Form 1099-B, Proceeds From Broker and Barter Exchange Transactions; IRS Form 1099-DIV, Dividends and Distributions; IRS Form 1099-INT, Interest Income; IRS Form 1099-MISC, Miscellaneous Income; IRS Form 1099-OID, Original Issue Discount, and any other form in the IRS Form 1099 series appropriate to the type of payment required to be reported.

Sec. 2.23. Form 1099 Reporting. “Form 1099 reporting” means the reporting required on Form 1099.

Sec. 2.24. Intermediary. An “intermediary” means any person that acts on behalf of another person such as a custodian, broker, nominee, or other agent.

Sec. 2.25. Non-Exempt Recipient. A “non-exempt recipient” or “non-exempt payee” means a person that is not an exempt recipient under the definition in paragraph 2.12 of this section.

Sec. 2.26. Nonqualified Intermediary. A “nonqualified intermediary” is any intermediary that is not a qualified intermediary.

Sec. 2.27. Payee. A “payee” is the person described in Treas. Reg. §§1.1441–1(b)(2) and b(3); 1.1441–5(c), (d) and (e); and 1.6049–5(d).

Sec. 2.28. Payment. A “payment” is considered made to a person if that person realizes income whether or not such income results from an actual transfer of cash or other property. See Treas. Reg. §1.1441–2(e). For example, a payment includes crediting an amount to an account.

Sec. 2.29. Payor. A “payor” means a person, including a middleman treated as a payor, required to make an information return under chapter 61 of the Code. See Treas. Reg. §§1.6049–4(a)(2) and 31.3406(a)–2.

Sec. 2.30. Presume. “Presume” means the presumptions that a person must make under Treas. Reg. §§1.1441–1(b)(3), 1.1441–4(a), 1.1441–5(d), 1.1441–5(e), 1.1441–9(b)(3) and 1.6049–5(d).

Sec. 2.31. Private Arrangement Intermediary. A “private arrangement intermediary” or “PAI” is an intermediary described in section 4 of this Agreement.

Sec. 2.32. Qualified Intermediary. A “qualified intermediary” is a person, described in Treas. Reg. §1.1441-1(e)(5)(ii), that enters into a withholding agreement with the IRS to be treated as a qualified intermediary.

February 1, 1999 36 1999–5 I.R.B.

Sec. 2.33. Qualified Intermediary (QI) EIN. A “qualified intermediary EIN” or “QI-EIN” means the employer identification number assigned by the IRS to a qualified intermediary to be used solely in its capacity as a qualified intermediary.

Sec. 2.34. Reduced Rate of Withholding. A “reduced rate of withholding” means a rate of withholding under chapter 3 of the Code that is less than 30% and includes an exemption from withholding.

Sec. 2.35. Reportable Amount. A “reportable amount” means an amount subject to withholding under chapter 3 of the Code (within the meaning of Treas. Reg. §1.1441–2(a)), U.S. source deposit interest (including original issue discount) described in section 871(i)(2)(A) of the Code, and U.S. source interest or original issue discount on short-term obligations described in section 871(g)(1)(B) of the Code. The term does not include payments on deposits with banks and other financial institutions that remain on deposit for two weeks or less. It also does not include amounts of original issue discount arising from a sale and repurchase transaction completed within a period of two weeks or less, or amounts described in Treas. Reg. §1.6049–5(b)(7), (10), or (11) (relating to certain obligations issued in bearer form). See Treas. Reg. §1.1441–1(e)(3)(vi).

Sec. 2.36. Reportable Payment. A “reportable payment” means any payment described in section 3406(b) of the Code. For example, reportable payments include reportable amounts, as defined in section 2.35 of this Agreement, and, in addition, broker proceeds, foreign source interest, foreign source dividends, and foreign source royalties unless an exception to reporting applies under chapter 61 of the Code.

Sec. 2.37. Short-Term Obligation. A “short-term obligation” is any obligation described in section 871(g)(1)(B)(i) of the Code.

Sec. 2.38. U.S. Person. A “United States (or U.S.) person” is a person described in section 7701(a)(30) of the Code, the U.S. government (including an agency or instrumentality thereof), a State of the United States (including an agency or instrumentality thereof), or the District of Columbia (including an agency or instrumentality thereof).

Sec. 2.39. Undocumented Account Holder/Payee. An “undocumented account holder” or “undocumented payee” is an account holder or payee for whom QI has not obtained documentation in accordance with section 5 of this Agreement.

Sec. 2.40. Withholding Agent. A “withholding agent” has the same meaning as set forth in Treas. Reg. §1.1441-7(a) and includes a payor, as defined in section 2.29 of this Agreement. As used in this Agreement, the term generally refers to the person making a payment to a qualified intermediary.

Sec. 2.41. Other Terms. Any term not defined in this section has the same meaning that it has under the Code, the Income Tax Regulations, or any applicable income tax treaty.