Definitions

Chapter 4 withholding rate pool. A “chapter 4 withholding rate pool” means a pool of payees that are nonparticipating FFIs provided on a chapter 4 withholding statement (as described in Regulations section 1.1471-3(c)(3)(iii)(B)(3)) to which a withholdable payment is allocated. The term also means a pool of payees provided on an FFI withholding statement (as described in Regulations section 1.1471-3(c)(iii)(B)(2)) to which a withholdable payment is allocated to (a) a pool of payees consisting of each class of recalcitrant account holders described in Regulations section 1.1471-4(d)(6) (or with respect to an FFI that is a QI, a single pool of recalcitrant account holders), including a separate pool of account holders to which the escrow procedures for dormant accounts apply; or (b) a pool of payees that are U.S. persons as described in Regulations section 1.1471-3(c)(3)(iii)(B) (2) (including such a pool allocated to a reportable amount on a withholding statement provided solely for chapter 3 purposes).

Deemed-compliant FFI. A “deemed-compliant FFI” means an FFI that is treated, pursuant to section 1471(b) (2) and Regulations section 1.1471-5(f), as meeting the requirements of section 1471(b). The term “deemed-compliant FFI” includes a nonreporting IGA FFI (as defined in Regulations section 1.1471-1(b)(83)).

Dividend equivalents. To the extent specified in section 871(m) and the regulations thereunder, a “dividend equivalent” is a payment (within the meaning of Regulations section 1.871-15(i)) that, directly or indirectly, is contingent on, or determined by reference to, the payment of a dividend from U.S. sources, including pursuant to a securities lending or sale-repurchase transaction, a specified notional principal contract, or a specified equity-linked instrument.

Note: There may be a dividend equivalent payment even if there is not an actual distribution or transfer of cash or property.

Certain other payments made by the withholding agent to satisfy a tax liability with respect to a dividend equivalent by the party receiving the dividend equivalent are dividend equivalents.

See Regulations section 1.871-15 for additional information, including the definitions of a specified notional principal contract and specified equity-linked instrument.

Any section 871(m) amount of a QDD is treated as a dividend equivalent. See Rev. Proc. 2022-43 for additional information, including the definition of a section 871(m) amount and Notice 2024-44 , which provides that a QDD is

required to begin computing its section 871(m) amount in 2027.

Exempt beneficial owner. An “exempt beneficial owner” is any person described in Regulations sections 1.1471-6(b) through (g) and includes any person treated as an exempt beneficial owner under an applicable Model 1 IGA or Model 2 IGA.

Financial institution (FI). A “financial institution” (FI) is any institution that is a depository institution, custodial institution, investment entity, insurance company (or holding company of an insurance company) that issues cash value insurance or annuity contracts, or a holding company or treasury center that is part of an expanded affiliated group of certain FFIs, and includes a financial institution, as defined under an applicable Model 1 IGA or Model 2 IGA. See Regulations section 1.1471-5(e)(1).

Foreign financial institution (FFI). Except as otherwise provided for certain foreign branches of a U.S. financial institution or territory financial institutions, a “foreign financial institution” (FFI) means a financial institution that is a foreign entity. The term “FFI” also includes a foreign branch of a U.S. financial institution with a QI agreement in effect.

Model 1 IGA. A “Model 1 IGA” means an agreement between the United States or the Treasury Department and a foreign government or one or more foreign agencies to implement FATCA through reporting by FIs to such foreign government or agency thereof, followed by automatic exchange of the reported information with the IRS. For a list of jurisdictions treated as having an IGA in effect, go to Treasury.gov/Resource-Center/Tax-Policy/Treaties/Pages/ FATCA.aspx .

Model 2 IGA. A “Model 2 IGA” means an agreement or arrangement between the United States or the Treasury Department and a foreign government or one or more foreign agencies to implement FATCA through reporting by FIs directly to the IRS in accordance with the requirements of the FFI agreement, as modified by an applicable Model 2 IGA, supplemented by the exchange of information between such foreign government or agency thereof and the IRS. For a list of jurisdictions treated as having an IGA in effect, go to Treasury.gov/Resource-Center/Tax-Policy/ Treaties/Pages/FATCA.aspx .

Non-financial foreign entity (NFFE). A “non-financial foreign entity” (NFFE) is a foreign entity that is not a financial institution. An NFFE includes a territory NFFE, as defined in Regulations section 1.1471-1(b)(132), and a foreign entity treated as an NFFE pursuant to a Model 1 IGA or Model 2 IGA.

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

Participating FFI. A “participating FFI” is an FFI that has agreed to comply with the requirements of an FFI agreement with respect to all branches of the FFI, other than a

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branch that is a reporting Model 1 FFI or a U.S. branch. The term “participating FFI” also includes a reporting Model 2 FFI and a QI branch of a U.S. financial institution, unless such branch is a reporting Model 1 FFI.

Passive NFFE. A “passive NFFE” is an NFFE that is not an excepted NFFE. With respect to a reporting Model 2 FFI filing a Form 8966 to report its accounts and payees, a passive NFFE is an NFFE that is not an active NFFE (as described in the applicable IGA).

Qualified derivatives dealer (QDD). A “qualified derivatives dealer” (QDD) is a QI that is an eligible entity (as defined in Regulations section 1.1441-1(e)(6)(ii)) that agrees to meet the requirements of Regulations section 1.1441-1(e)(6)(i) and the QI agreement. To act as a QDD, the home office or branch, as applicable, must qualify and be approved for QDD status and must represent itself as a QDD on its Form W-8IMY and separately identify the home office or branch as the recipient on a withholding statement. Each home office or branch that obtains QDD status is treated as a separate QDD. See Regulations section 1.1441-1(e)(6) and Rev. Proc. 2022-43 for more information.

Recalcitrant account holder. A “recalcitrant account holder” is an account holder (other than an account holder that is an FFI or is presumed to be an FFI) of a participating FFI or registered deemed-compliant FFI that has failed to provide the FFI maintaining its account with the information required under Regulations section 1.1471-5(g).

Registered deemed-compliant FFI. A “registered deemed-compliant FFI” is an FFI described in Regulations section 1.1471-5(f)(1) and includes a reporting Model 1 FFI and a QI branch of a U.S. financial institution that is a reporting Model 1 FFI.

Reporting Model 1 FFI. A “reporting Model 1 FFI” is an FI, including a foreign branch of a U.S. financial institution, treated as a reporting financial institution under a Model 1 IGA.

Reporting Model 2 FFI. A “reporting Model 2 FFI” is an FFI described in a Model 2 IGA that has agreed to comply with the requirements of an FFI agreement with respect to a branch.

Territory financial institution. A “territory financial institution” is a financial institution that is incorporated or organized under the laws of any U.S. territory, excluding a territory entity that is a financial institution only because it is an investment entity, as defined in Regulations section 1.1471-5(e)(4).

Withholdable payment. A “withholdable payment” is a payment described in Regulations section 1.1473-1(a). See Income Subject to Withholding , earlier, for a discus- sion of which payments qualify as withholdable payments.