SECTION 2. DEFINITIONS

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

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

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

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

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

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

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

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

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

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

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

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

Sec. 2.10. Chapter 3. Any reference to “chapter 3” means sections 1441, 1442, 1443, 1461, 1463, and 1464. Sec. 2.11. Chapter 3 Reporting Pool. A “chapter 3 reporting pool” means a reporting pool described in section 8.03(B) of this Agreement.

Sec. 2.12. Chapter 4. Any reference to “chapter 4” means sections 1471, 1472, 1473, and 1474. Sec. 2.13. Chapter 4 Reporting Pool. A “chapter 4 reporting pool” means a reporting pool described in section 8.03(A) of this Agreement.

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

financial institution, an excepted NFFE, or a passive NFFE.

Sec. 2.15. Chapter 61. Any reference to “chapter 61” means sections 6041, 6042, 6045, 6049, and 6050N. Sec. 2.16. Dealer. A “dealer” has the meaning given to the term dealer in § 1.871–15(a)(2) ( i.e ., a dealer in securities within the meaning of section 475(c)(1)). Sec. 2.17. Deemed-Compliant FFI. “Deemed-compliant FFI” means an FFI that is treated, pursuant to section 1471(b)(2) and § 1.1471–5(f), as meeting the requirements of section 1471(b).

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

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

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

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

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

Sec. 2.20. Documentary Evidence. “Documentary evidence” means any documentation obtained under the appropriate know-your-customer rules (as described in the Attachments to this Agreement), any documentary evidence described in

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§ 1.1441–6 sufficient to establish entitlement to a reduced rate of withholding under an income tax treaty, or any documentary evidence described in § 1.6049– 5(c) sufficient to establish an account holder’s status as a foreign person for purposes of chapter 61. Documentary evidence does not include a Form W–8 or Form W–9 (or an acceptable substitute Form W–8 or Form W–9).

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

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

Sec. 2.23. Effective Date of the QI Agreement. For a prospective QI that applies to be a QI prior to March 31 of a given calendar year, the effective date of the QI Agreement will be January 1 of that year. For a prospective QI that applies after March 31 of a given calendar year and that has not received any reportable payments prior to the date the application is submitted, the effective date of the QI Agreement will be January 1 of that year. For a prospective QI that applies after March 31 of a given calendar year and that has received a reportable payment in the calendar year prior to the date the application is submitted, the effective date of the QI Agreement will be the first of the month in which the QI application is complete and the QI has received its QI-EIN. For a QI that is renewing its QI Agreement provided in Rev. Proc. 2014–39, 2014–29 I.R.B. 150, the effective date of the QI Agreement when renewed by March 31, 2017, will be January 1, 2017.

Sec. 2.24. Eligible Entity. “Eligible entity” for QDD status means a qualified intermediary that is— (A) A dealer in securities subject to regulatory supervision as a dealer by a governmental authority in the jurisdiction in which it was organized or operates; (B) A bank subject to regulatory supervision as a bank by a governmental authority in the jurisdiction in which it was

organized or operates and that (1) issues potential section 871(m) transactions to customers, and (2) receives dividends with respect to stock or dividend equivalent payments pursuant to potential section 871(m) transactions that hedge potential section 871(m) transactions that it issued; (C) An entity that is wholly-owned (directly or indirectly) by a bank subject to regulatory supervision as a bank by a governmental authority in the jurisdiction in which the bank was organized or operates and that (1) issues potential section 871(m) transactions to customers, and (2) receives dividends with respect to stock or dividend equivalent payments pursuant to potential section 871(m) transactions that hedge potential section 871(m) transactions that it issued; or (D) A foreign branch of a U.S. financial institution, if the foreign branch would meet the requirements of paragraph (A), (B), or (C), if it were a separate entity.

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

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

Sec. 2.27. Exempt Recipient. For purposes of Form 1099 reporting and backup withholding, an “exempt recipient” means a person described in § 1.6049–4(c)(1)(ii) (for interest, dividends, and royalties), a person described in § 1.6045–2(b)(2)(i) (for broker proceeds), and a person described in § 1.6041–3(q) (for rents, amounts paid on notional principal contracts, and other fixed or determinable income), for which no Form 1099 reporting is required. Exempt recipients are not exempt from reporting or withholding under chapter 3 or 4.

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

(A) For a participating FFI or an FFI that agrees to be treated as a participating

FFI, the requirements set forth in the FFI agreement;

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

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

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

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

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

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

Sec. 2.33. Flow-Through Entity. A flow-through entity is a foreign partnership described in § 301.7701–2 or 3 (other than a withholding foreign partnership), a foreign trust (other than a withholding foreign trust) that is described in section 651(a), or a foreign trust if all or a portion of such trust is treated as owned by the grantor or other person under sections 671 through 679. For an item of income for which a treaty benefit is claimed, an entity is also a flow-through entity to the extent it is treated as fiscally transparent under section 894 and the regulations thereunder. Sec. 2.34. Foreign Person. A “foreign person” is any person that is not a “United States person” and includes a “nonresident alien individual,” a “foreign corporation,” a “foreign partnership,” a “foreign trust,” and a “foreign estate,” as those

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

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

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

Sec. 2.37. Form W–9. “Form W–9” means IRS Form W–9, Request for Tax- payer Identification Number and Certifi- cation, or any acceptable substitute Form W–9.

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

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

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

Sec. 2.41. Form 1096. “Form 1096” means IRS Form 1096 , Annual Summary

and Transmittal of U.S. Information Re- turns .

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

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

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

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

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

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

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

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

Sec. 2.50. Non-Exempt Recipient. A “non-exempt recipient” means a person that is not an exempt recipient under the

definition in section 2.27 of this Agreement.

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

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

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

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

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

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

Sec. 2.57. Overwithholding. The term “overwithholding” means any amount actually withheld (determined before application of the adjustment procedures described in section 9 of this Agreement) from an item of income or other payment that is in excess of: (A) The amount required to be withheld under chapter 4 with respect to such item of income or other payment, if applicable, and,

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

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

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

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

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

Sec. 2.61. Payor. A “payor” is defined in § 31.3406(a)–2 and § 1.6049–4(a)(2) and generally means any person required to make an information return under chapter 61. The term includes any person that makes a payment, directly or indirectly, to QI and to whom QI provides information, pursuant to this Agreement, so that such person can report a payment on Form

1099 and, if appropriate, backup withhold. See sections 3.05 and 3.06 of this Agreement. Also see sections 2.90 and 2.54 of this Agreement for the definition of U.S. payor and non-U.S. payor.

Sec. 2.62. Permanent Residence Ad- dress. A “permanent residence address” means an address described in § 1.1441– 1(c)(38). Sec. 2.63. Potential Section 871(m) Transaction. A “potential section 871(m) transaction” is any securities lending or sale-repurchase transaction, notional principal contract (NPC), or equity linked instrument (ELI) that references one or more underlying securities. For purposes of this definition, securities lending or sale-repurchase transaction, NPC, ELI, reference, and underlying security have the meaning given to the terms in §§ 1.871–15(a)(13), (7), (4), (11), and (15), respectively.

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

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

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

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

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

Sec. 2.69. Qualified Intermediary (QI) EIN. A “qualified intermediary EIN” or “QI-EIN” means the employer identification number assigned by the IRS to a qualified intermediary. QI’s QI-EIN is

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

Sec. 2.70. Qualifying Dividend Equivalent Offsetting Payment.

(A) In General. For purposes of a QI that is acting as a QDD, a “qualifying dividend equivalent offsetting payment” means:

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

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

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

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

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

Sec. 2.73. Reliably Associating a Pay- ment With Documentation. See section 5.13(B) of this Agreement to determine

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whether QI can reliably associate a payment with documentation.

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

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

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

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

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

(B) Non-U.S. Payor. If QI is a nonU.S. payor, a “reportable payment” means, unless an exception to reporting applies under chapter 61, (1) Any reportable amount; (2) Any broker proceeds from a sale effected at an office inside the United States, as defined in § 1.6045–1(g)(3)(iii); and (3) Any foreign source interest, dividends, rents, royalties, or other fixed and determinable income if such income is not paid outside the United States as described under section 5.13(C)(1) of this Agreement.

Sec. 2.76. Reporting Model 1 FFI. A “reporting Model 1 FFI” means an FFI with respect to which a foreign govern

ment or agency thereof agrees to obtain and exchange information pursuant to a Model 1 IGA, other than an FFI that is treated as a nonreporting Model 1 FFI (including a registered deemed-compliant Model 1 IGA FFI) or a nonparticipating FFI under an applicable Model 1 IGA.

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

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

Sec. 2.79. Section 871(m) Amount. A “section 871(m) amount” means the sum of the amounts by which, for each dividend on each underlying security, (A) the dividends on underlying securities associated with potential section 871(m) transactions and dividend equivalent payments that QI acting as a QDD receives in its dealer capacity exceed (B) the dividend equivalent payments and the qualifying dividend equivalent offsetting payments that QI acting as a QDD makes or is contractually obligated to make with respect to the same dividend in its dealer capacity.

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

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

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

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

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

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

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

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

Sec. 2.87. Undocumented Account Holder. An “undocumented account holder” is an account holder for whom QI does not hold valid documentation.

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

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

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

Sec. 2.91. U.S. Person. A “U.S. person” (or “United States person”) is a person described in section 7701(a)(30), the U.S. government (including an agency or

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

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

Sec. 2.93. U.S. Source FDAP. “U.S. source FDAP” means amounts from sources within the United States that constitute fixed or determinable annual or periodical income, as defined in § 1.1441– 2(b)(1). Sec. 2.94. U.S. TIN. A “U.S. TIN” means a U.S. taxpayer identification number assigned under section 6109.

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

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

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

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

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

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

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