(A) Coordination of Documentation Requirements with Chapter 4. If WP is an FFI (other than a retirement fund), WP is required to perform the due diligence procedures under its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI for each direct partner to determine if the partner is a holder of a U.S. account (or U.S. reportable account), and each direct partner that is a nonparticipating FFI and, if applicable, that is a recalcitrant account holder (or non-consenting U.S. account). See, however, the automatic termination provision of section 10.03(A) of this Agreement if WP is not in possession of valid documentation for any direct partner at any time that withholding or reporting is required. If WP is an NFFE, WP is required to determine the chapter 4 status of each partner to determine if reporting or withholding applies under section 1471 or 1472 on withholdable payments distributed to, or included in the distributive share of, the partner under the requirements of § 1.1471–3(d). See Notice 2014–33, 2014–21 I.R.B. 1033, which modifies the time in which WP is required to implement the applicable due diligence procedures with respect to an obligation held by an entity that is opened, issued, or executed on or after July 1, 2014, and before January 1, 2015.

If WP has determined that withholding is not required under chapter 4, WP must obtain, unless already collected, documentation that meets the requirements of this section 4 to determine whether withholding applies under chapter 3. See also WP’s FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI for when WP will have reason to know that a claim of chapter 4 status is unreliable or incorrect and for WP’s requirements following a change in circumstances. If WP is an NFFE, see § 1.1471–3(e)(4) for when WP will have reason to know that an entity’s claim of chapter 4 status is unreliable or incorrect and § 1.1471–3(c)(6)(ii)(E) for WP’s requirements following a change in circumstances.

(B) General Documentation Requirements. Except as otherwise provided in this section 4, WP must obtain a Form W–8 or Form W–9 from every direct partner that receives a distribution or distributive share of a reportable amount. Notwithstanding the previous sentence, if WP is an FFI and is subject to the know-your-customer rules for documenting its partners (or subset of partners), WP may obtain documentary evidence as set forth in the Attachment (or the documentation described in section 4.03(A)(3) of this Agreement) for the applicable jurisdiction from its direct partners rather than a Form W–8 or Form W–9. If WP is an FFI obtaining documentary evidence, WP must also adhere to the know-your-customer rules that apply to WP with respect to the direct partner from whom the documentary evidence is obtained.

WP must review and maintain documentation in accordance with this section 4 and, in the case of documentary evidence obtained from direct partners, in accordance with the know-your-customer rules set forth in the Attachments to this Agreement. See sections 2.03 and 2.40 of this Agreement. WP must make documentation (together with any associated withholding statements and other documents or information) available upon request for inspection by WP’s external auditor, if the performance of external audit procedures is requested by the IRS as described in section 8.07(D) of this Agreement. WP represents that none of the laws to which it is subject prohibits disclosure of the identity of any partner or corresponding partner information to WP’s external auditor, if required under section 8.07(D) of this Agreement.

Sec. 4.02. Documentation for Foreign Partners. WP may treat a partner as a foreign beneficial owner of an amount if the partner provides a valid Form W–8 (other than Form W–8IMY), or valid documentary evidence, to the extent permitted under section 4.01(B) of this Agreement, that supports the partner’s status as a foreign person. WP may treat a partner that has provided documentation as entitled to a reduced rate of withholding under chapter 3 if all the requirements for a reduced rate are met and the documentation provided by the partner supports entitlement to a reduced rate of withholding. Sections 4.03 through 4.06 of this Agreement describe the specific documentation requirements necessary for obtaining a reduced rate of withholding in certain circumstances.

Sec. 4.03. Treaty Claims. WP may not reduce the rate of withholding under chapter 3 based on a partner’s claim of treaty benefits unless WP has determined that no chapter 4 withholding is required and it obtains from the partner the documentation required by section 4.03(A) of this Agreement. In addition, WP agrees to establish procedures to inform partners of the terms of the limitation on benefits provisions of a treaty (if applicable, and regardless of whether those provisions are contained in a separate article entitled Limitation on Benefits) under which the partner is claiming benefits.

(A) Treaty Documentation. The documentation required by this section 4.03(A) is as follows:

(1) A Form W–8BEN or Form W–8BEN–E on which a claim of treaty benefits is made, including the appropriate limitation on benefits and section 894 certifications, if applicable, and a U.S. TIN or foreign TIN. A U.S. TIN or foreign TIN shall not be required, however, if the partner is a direct partner. If WP is acting as a withholding foreign partnership for an indirect partner, the indirect partner is required to have either a U.S. TIN or a foreign TIN in order to claim treaty benefits unless it is claiming treaty benefits on income from marketable securities as described in § 1.1441–6(c);

(2) Documentary evidence, as permitted under section 4.01(B) of this Agreement, that has been obtained pursuant to the know-your-customer rules that apply to the direct partner, and the direct partner has made the treaty statement required by section 4.03(B) of this Agreement, if applicable; or

(3) The type of documentary evidence, as permitted under section 4.01(B) of this Agreement, required under § 1.1441–6 to establish entitlement to a reduced rate of withholding under a treaty and the direct partner has made the treaty statement required by section 4.03(B) of this Agreement, if applicable.

(B) Treaty Statement. The treaty statement required by this section 4.03(B) is as follows: [Name of Direct Partner] meets all provisions of the treaty that are necessary to claim a reduced rate of withholding, including any applicable limitation on benefits provisions, and derives the income within the meaning of section 894, and the regulations thereunder, as the beneficial owner.

WP is required to obtain the treaty statement described in this section 4.03(B) from a partner that is an entity. WP shall not be required to obtain a treaty statement described in this section 4.03(B) from an individual who is a resident of an applicable treaty country or from the government, or its political subdivisions, of a treaty country.

Sec. 4.04. Documentation for International Organizations. WP may not treat a partner as an international organization entitled to an exemption from withholding under section 892 unless WP has determined that no chapter 4 withholding is required and it obtains a Form W–8EXP (or documentary evidence as permitted under section 4.01(B) of this Agreement) from the international organization. The name provided on the documentation must be the name of an entity designated as an international organization by executive order pursuant to 22 United States Code 288 through 288(f). If an international organization is not claiming benefits under section 892 but under another Code exception, the provisions of section 4.02 of this Agreement apply rather than the provisions of this section 4.04.

(A) Documentation for a Foreign Government or Foreign Central Bank of Issue Claiming an Exemption from Withholding Under Section 892 or Section 895. WP may not treat a partner as a foreign government or foreign central bank of issue exempt from withholding under section 892 or 895 unless WP has determined that no chapter 4 withholding is required and—

(1) WP receives from the partner a Form W–8EXP (or documentary evidence as permitted under section 4.01(B) of this Agreement) establishing that the partner is a foreign government or foreign central bank of issue;

(2) The income distributed to, or included in the distributive share of, the partner is the type of income that qualifies for an exemption from withholding under section 892 or 895; and

(3) WP does not know, or have reason to know, that the partner is a controlled commercial entity as described in section 892, that the income owned by the foreign government or foreign central bank of issue is being received from a controlled commercial entity, or that the income is from the disposition of an interest in a controlled commercial entity.

(B) Treaty Exemption. WP may not treat a partner as a foreign government or foreign central bank of issue entitled to a reduced rate of withholding under an income tax treaty for purposes of chapter 3 unless WP has determined that no chapter 4 withholding is required and it has valid documentation that is sufficient to obtain a reduced rate of withholding under a treaty, as described in section 4.03 of this Agreement.

(C) Other Code Exception. If a foreign government or foreign central bank of issue is not claiming benefits under section 892 or a reduced rate under an income tax treaty but under another Code exception (e.g., the portfolio interest exception under section 871(h) or 881(c)), the provisions of section 4.02 of this Agreement apply rather than the provisions of this section 4.05.

Sec. 4.06. Documentation for Foreign Tax-Exempt Organizations. To the extent that WP determines that an amount distributed to, or included in the distributive share of, a partner is not subject to withholding under chapter 4, WP may not treat the partner as a foreign tax-exempt organization and reduce the rate of withholding or exempt the partner from withholding for purposes of chapter 3 unless WP satisfies the requirements provided in section 4.06(A), (B), or (C) of this Agreement.

(A) Reduced Rate of Withholding Under Section 501. WP may not treat a partner as a foreign organization described under section 501(c), and therefore exempt from withholding under chapter 3 (or, if the partner is a foreign private foundation, subject to withholding at a 4-percent rate under section 1443(b)) unless WP obtains a valid Form W–8EXP with Part IV of the form completed.

(B) Treaty Exemption. WP may not treat a partner as a foreign organization that is tax-exempt on an item of income pursuant to a treaty unless WP obtains valid documentation as described under section 4.03 of this Agreement that is sufficient for obtaining a reduced rate of withholding under the treaty and the documentation establishes that the partner is an organization exempt from tax under the treaty on that item of income.

(C) Other Exceptions. If a tax-exempt entity is not claiming a reduced rate of withholding because it is a foreign organization described under section 501(c) or under a treaty article that applies to exempt certain foreign organizations from tax, but is claiming a reduced rate of withholding under another Code or treaty exception, the provisions of section 4.02 or 4.03 of this Agreement (as applicable) shall apply rather than the provisions of this section 4.06.

Sec. 4.07. Documentation from Passthrough Partners. Except as otherwise provided in section 9 of this Agreement, WP shall not act as a withholding foreign partnership with respect to an amount distributed to, or included in the distributive share of, a passthrough partner. WP must forward the passthrough partner’s documentation (and associated withholding statement and documentation of indirect partners) to the withholding agent from whom WP receives a reportable amount.

Sec. 4.08. Documentation for U.S. Exempt Recipients. WP shall not treat a partner as a U.S. exempt recipient unless WP obtains from the partner—

(A) A valid Form W–9 on which the partner includes an exempt payee code to certify that the partner is a U.S. exempt recipient;

(B) Documentary evidence, as permitted under section 4.01(B) of this Agreement, that is sufficient to establish that the partner is a U.S. exempt recipient; or

(C) Documentary evidence, as permitted under section 4.01(B) of this Agreement, that is sufficient to establish the partner’s status as a U.S. person and WP can treat the partner as an exempt recipient under the rules of § 1.6045–2(b)(2)(i) or § 1.6049–4(c)(1)(ii), as appropriate, without obtaining documentation.

Sec. 4.09. Documentation for U.S. Non-Exempt Recipients. WP shall not treat a partner as a U.S. non-exempt recipient unless WP obtains a valid Form W–9 from the partner.

(A) In General. WP may not rely on documentation if WP has actual knowledge or reason to know that documentation provided by a partner is unreliable or incorrect, including when there is a change in circumstances with respect to the information or statements contained in the documentation or in WP’s files pertaining to the obligation (account information) that affects the reliability of the partner’s claim. See § 1.1441–1(e)(4)(ii)(D) for the definition of change in circumstances. Once WP knows, or has reason to know, that documentation provided by a partner is unreliable or incorrect, it can no longer reliably associate a payment with valid documentation unless it obtains additional documentation to establish the partner’s chapter 3 status. If WP can no longer reliably associate a payment with valid documentation, it must obtain new documentation prior to the time withholding is required under section 3 of this Agreement.

(A) Documentation Other Than a Form W–9. WP, as permitted under section 4.01(B) of this Agreement, may rely on valid documentary evidence obtained from direct partners in accordance with applicable know-your-customer rules as long as the documentary evidence remains valid under those rules or until WP knows, or has reason to know, that the information contained in the documentary evidence is unreliable or incorrect. WP may rely on the representations described in section 4.03 of this Agreement obtained in connection with such documentation for the same period of time as the documentation. For establishing a partner’s chapter 3 status (as defined in § 1.1441–1(c)(45)) or foreign status for chapter 61 purposes, WP may rely on a valid Form W–8 until its validity expires under § 1.1441–1(e)(4)(ii) and may rely on documentary evidence (other than documentary evidence obtained pursuant to applicable know-your-customer rules) until its validity expires under § 1.6049–5(c).

(B) Form W–9. WP may rely on a Form W–9 unless one of the conditions of § 31.3406(h)–3(e)(2)(i) through (v) applies or if it has been informed by the IRS or another withholding agent that the form is unreliable or incorrect.

(A) Maintaining Documentation. WP shall maintain documentation by retaining the original documentation, a certified copy, a photocopy, a scanned copy, a microfiche, or other means that allow reproduction (provided that WP has recorded receipt of the documentation and is able to produce a hard copy). If WP is not required to retain copies of documentary evidence under its know-your-customer rules, WP may instead retain a notation of the type of documentation reviewed, the date the documentation was reviewed, the document’s identification number, if any (e.g., a passport number), and whether such documentation contained any U.S. indicia. For obligations held by a direct partner opened prior to January 1, 2001, if WP was not required under its know-your-customer rules to maintain originals or copies of documentation, WP may nevertheless rely on the information if it has complied with all other aspects of its know-your-customer rules regarding establishment of a partner’s identity, it has a record that the documentation required under the know-your-customer rules was actually examined by an employee of WP or partner of WP in accordance with the know-your-customer rules, and it has no information in its possession that would require WP to treat the documentation as invalid under the rules of section 4.10(B) of this Agreement.

(B) Retention Period. WP shall retain a partner’s documentation obtained under this section 4 for as long as the document is relevant for the determination of WP’s tax liability or reporting responsibilities under chapters 3, 4, and 61, and section 3406.

(A) In General. WP shall file a return on Form 1042, whether or not WP withheld any amounts under chapter 3 or 4 of the Code, on or before March 15 of the year following any calendar year in which WP acts as a withholding foreign partnership. In addition to the information required on Form 1042 and its accompanying instructions, WP shall attach a statement setting forth the amounts of any overwithholding or underwithholding adjustments made under sections 7.01 and 7.03 of this Agreement, and an explanation of the circumstances that resulted in the over–or underwithholding. If WP is requesting a collective refund or credit, WP shall attach the statements required by section 7.02 of this Agreement and shall comply with the procedures specified in section 7.02 of this Agreement.

(B) Extensions for Filing Returns. WP may request an extension of the time for filing Form 1042, or any of the information required to be attached to the form, by submitting Form 7004, Application for Automatic Extension of Time to File Certain Business Income, Tax, Information, and Other Returns, on or before the due date of the return.

(A) In General. WP must file Form 1042–S for each partner for whom it acts as a withholding foreign partnership and for whom WP distributes, or in whose distributive share is included, a reportable amount unless WP is permitted under sections 6.02(C) and (D) of this Agreement to report in pools (reporting pools). With respect to its direct partners, WP must file Forms 1042–S in the manner required by the regulations under chapters 3 and 4 for amounts distributed to, or included in the distributive share of, its partners (or in the case of a participating FFI, pursuant to its FATCA requirements as a participating FFI) and the instructions to the form, including any requirement to file the forms magnetically or electronically. Any Form 1042–S required to be filed by this section 6 shall be filed on or before March 15 following the calendar year in which withholding, if any, was required under section 3.02 of this Agreement. WP may request an extension of time to file Forms 1042–S by submitting Form 8809, Application for Extension of Time to File Information Returns, (or other superseding form) by the due date of Forms 1042–S in the manner required by Form 8809.

(B) Recipient Specific Reporting. WP is required to file a separate Form 1042–S for amounts distributed to, or included in the distributive share of, each separate partner as described in this section 6.02(B). WP must file separate Forms 1042–S by income code, chapter 3 or 4 exemption code, recipient code, chapter 4 withholding rate pool (if applicable), and withholding rate.

(1) Unless WP has made the pooled reporting election pursuant to section 6.02(D) of this Agreement, WP must file a separate Form 1042–S for each direct partner (other than a passthrough partner) to whom WP distributes, or whose distributive share includes, an amount subject to chapter 3 withholding that is either not a withholdable payment or is a withholdable payment for which no chapter 4 withholding is required.

(2) WP must file a separate Form 1042–S for each partner that is a qualified intermediary, a withholding foreign partnership, or a withholding foreign trust to whom WP distributes, or whose distributive share includes, an amount subject to withholding under chapters 3 or 4, regardless of whether such partner is a direct or indirect partner of WP.

(3) WP must file a separate Form 1042–S for each passthrough partner that is a nonqualified intermediary or flow-through entity that is a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI and to whom WP distributes, or whose distributive share includes, an amount subject to chapter 4 withholding allocable to such FFI’s chapter 4 withholding rate pools of recalcitrant account holders, nonparticipating FFIs, and reportable amounts allocable to U.S. payees, if applicable, regardless of whether such FFI is a direct or indirect partner of WP when WP applies section 9.03 of this Agreement.

(4) WP must file a separate Form 1042–S for each passthrough partner that is a nonqualified intermediary or flow-through entity that is not described in section 6.02(B)(3) of this Agreement (other than a nonparticipating FFI), and to whom WP distributes, or whose distributive share includes, an amount subject to chapter 4 withholding allocable to such passthrough partner’s chapter 4 withholding rate pool of payees that are nonparticipating FFIs, regardless of whether such passthrough partner is a direct or indirect partner of WP when WP applies section 9.03 of this Agreement.

(5) WP must file a separate Form 1042–S for each partner of WP that is a partnership or trust to which WP applies the agency option under section 9.02 of this Agreement and to whom WP distributes, or whose distributive share includes, an amount subject to chapter 4 withholding that is allocable to the partnership or trust’s chapter 4 withholding rate pool of payees that are nonparticipating FFIs or to whom WP distributes, or whose distributive share includes, an amount subject to chapter 3 withholding that is either not a withholdable payment or is a withholdable payment for which no chapter 4 withholding is required and that is allocable to such partnership’s or trust’s chapter 3 withholding rate pools.

(6) WP must file a separate Form 1042–S for each partner of WP that is a partnership or trust to which WP applies the joint account option under section 9.02 of this Agreement and to whom WP distributes, or whose distributive share includes, an amount subject to chapter 3 withholding that is allocable to such partnership or trust’s chapter 3 withholding rate pool.

(7) WP must file a separate Form 1042–S for each foreign account holder (or interest holder) of a passthrough partner that is a nonparticipating FFI that receives a payment on behalf of an exempt beneficial owner (regardless of whether the passthrough partner is a direct or indirect partner of WP) to the extent WP can reliably associate such amounts with valid documentation from such passthrough partner as to the portion of the payment allocable to one or more exempt beneficial owners. In addition, WP must file separate Forms 1042–S in the same manner for each foreign account holder (or interest holder) of a passthrough partner that is described in the preceding sentence and that is a direct or indirect partner, beneficiary, or owner of a partnership or trust to which WP applies the agency option.

(8) WP must file a separate Form 1042–S for each foreign account holder (or interest holder) of a nonqualified intermediary or flow-through entity to whom WP distributes, or whose distributive share includes, an amount subject to chapter 3 withholding that is either not a withholdable payment or is a withholdable payment for which no chapter 4 withholding is required to the extent WP can reliably associate such amounts with valid documentation from an account holder (or interest holder) that is not itself a nonqualified intermediary or flow-through entity when WP applies section 9.03 of this Agreement. In addition, WP must file a separate Form 1042–S in the same manner for each foreign account holder (or interest holder) of a nonqualified intermediary or flow-through entity (to which WP does not apply the agency option) that is described in the preceding sentence and that is a direct or indirect account holder (or interest holder) of a partnership or trust to which WP applies the agency option.

(9) If WP is an NFFE, WP must file a separate Form 1042–S for each direct partner that establishes its status as a passive NFFE but fails to provide the information regarding its owners as required under § 1.1471–3(d)(12)(iii).

(A) General Rule. If WP is required to file Form 1065 and Schedules K–1 under § 1.6031(a)–1, then WP shall file Form 1065 and Schedules K–1 in accordance with the regulations and the instructions for the form as modified by section 6.03(B) of this Agreement.

(B) Modified Filing Obligations. If WP has U.S. source income, WP may avail itself of the modified obligations described in section 6.03(B)(1) or (2) of this Agreement, if, in addition to satisfying the requirements of section 6.03(B)(1) or (2) of this Agreement, none of this income is attributable to a permanent establishment inside the United States, none of this income is effectively connected with a trade or business within the United States, and WP would not otherwise be required to report to any partner a specially allocated item on Schedule K–1.

(1) WP is not required to file a Form 1065 provided that WP has no direct or indirect partners that are U.S. persons at any time during WP’s taxable year.

(2) WP is required to file a Form 1065, but is not required to file Schedules K–1 for any partners other than its direct U.S. partners and its passthrough partners (whether U.S. or foreign) through which indirect U.S. partners hold an interest in WP. Schedules K–1 that are not excepted from the filing requirement under this section 6.03(B)(2) must contain the same information required of a domestic partnership under § 1.6031(a)–1(a).

Sec. 6.04. Retention of Returns. WP shall retain Forms 1042 and 1065 for the period of the applicable statute of limitations on assessments and collection under the Code.

(A) WP that is an FFI. If WP is an FFI, WP is required to report each U.S. account (or, in the case of an FFI that is a reporting Model 1 FFI or registered deemed-compliant Model 1 IGA FFI, each U.S. reportable account) that it maintains consistent with its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI. See WP’s requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI to report each account that is a U.S. account (or U.S. reportable account) that it maintains. If WP is a participating FFI or registered deemed-compliant FFI (other than a reporting Model 1 FFI or registered deemed-compliant Model 1 IGA FFI), WP must report its U.S. accounts on Form 8966, FATCA Report, in the time and manner specified under its FATCA requirements as a participating FFI or registered deemed-compliant FFI except to the extent WP is reporting under § 1.1471–4(d)(5) on Form 1099 with respect to its U.S. accounts. If WP is a reporting Model 1 FFI or registered deemed-compliant Model 1 IGA FFI, WP must report each U.S. reportable account on Form 8966 as required under the applicable Model 1 IGA.

(B) WP that is an NFFE. If WP is an NFFE, WP shall file Forms 8966 to report withholdable payments distributed to, or included in the distributive share of, any partner that is an NFFE (other than an excepted NFFE) with one or more substantial U.S. owners if the NFFE is the beneficial owner of the withholdable payment received by WP. See § 1.1471–1(b)(8) for the definition of beneficial owner. WP must report on Form 8966 in accordance with the form and its accompanying instructions.

The Form 8966 must include the name of the NFFE that is owned by a substantial U.S. owner; the name, address, and U.S. TIN of each substantial U.S. owner; the total of all withholdable payments distributed to, or included in the distributive share of, the NFFE during the calendar year; and any other information as required by the form and its accompanying instructions.

(C) Form 8966 Reporting for Payees that are NFFEs. WP shall file Form 8966 to report withholdable payments that WP distributes to, or includes in the distributive share of, a passthrough partner that provides information regarding an account holder (or interest holder that is an NFFE (other than an excepted NFFE) with one or more substantial U.S. owners (or one or more controlling persons that is a specified U.S. person under an applicable IGA) and that is the beneficial owner of the withholdable payment received by WP. WP must report on Form 8966 in the time and manner provided in § 1.1474–1(i)(2). Such report must include the name of the NFFE that is owned by a substantial U.S. owner (or controlling person that is a specified U.S. person); the name, address, and U.S. TIN of each substantial U.S. owner (or controlling person that is a specified U.S. person); the total of all withholdable payments made to the NFFE during the calendar year (or reportable period under the applicable IGA); and any other information as required by the form and its accompanying instructions. WP is only required to report as described in this section 6.05(C) if WP acts as a withholding foreign partnership with respect to such indirect partner as described in section 9.03 of this Agreement and the passthrough partner does not certify on its withholding statement that it is reporting the account holder (or interest holder) as a U.S. account pursuant to its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI.

(1) WP may use the collective refund procedures under this section 7.02 only if WP has not issued Forms 1042–S to the partners that were subject to overwithholding and for which a collective refund claim is being made.

(2) WP must submit together with its amended Form 1042 on which it provides a reconciliation of amounts withheld and a claim for credit or refund, a statement that includes the following information and representations—

(i) The reason(s) for the overwithholding;

(ii) WP deposited the tax for which a refund is being sought under section 6302 and WP has not applied the reimbursement or set-off procedures of §§ 1.1461–2 and 1.1474–2 to adjust the tax withheld to which the claim relates;

(iii) WP has repaid or will repay the amount for which a refund is sought to the appropriate partners;

(iv) WP retains a record showing the total amount of tax withheld, adjustments for underwithholding, and reimbursements for overwithholding as it relates to each partner and also showing the repayment (if applicable) to such partners for the amount of tax for which a refund is being sought;

(v) WP retains valid documentation that meets the requirements of chapter 3 or 4 (as applicable) to substantiate the amount of overwithholding with respect to each partner for which a refund is being sought; and

(vi) WP has not (and will not) issue a Form 1042–S (or such other form as the IRS may prescribe) to any partner with respect to the payments for which a refund is being sought.

Sec. 7.03. Adjustments for Chapter 3 or 4 Underwithholding. If WP knows that an amount should have been withheld under chapter 3 or 4 from a previous payment made to a partner and the amount was not withheld, WP may either withhold from future payments made pursuant to chapter 3 or chapter 4 to the same partner or satisfy the tax from the partner’s proportionate share of assets over which WP has control. The additional withholding or satisfaction of the tax owed described in the previous sentence must be made before the due date of the Form 1042 (not including extensions) for the calendar year in which the underwithholding occurred.

Sec. 7.04. Chapter 3 or 4 Underwithholding after Form 1042 Filed. If, after a Form 1042 has been filed for a calendar year, WP, WP’s auditor, or the IRS determines that WP has underwithheld tax under chapter 3 or 4 for such year, WP shall file an amended Form 1042 to report and pay the underwithheld tax. WP shall pay the underwithheld tax, the interest due on the underwithheld tax, and any applicable penalties, at the time of filing the amended Form 1042. If WP fails to file an amended return, the IRS shall make such return under section 6020 and assess such tax under the procedures set forth in the Code.

(A) In General. WP must adopt a compliance program under the authority of a responsible officer. WP’s compliance program must include policies, procedures, and processes sufficient for WP to satisfy the documentation, reporting, and withholding requirements of this Agreement and sufficient for the responsible officer of WP to make the certifications required under section 8.03 of this Agreement. See section 2.63 of this Agreement for the definition of responsible officer. WP must also perform or arrange for the performance of the periodic review described in section 8.04 of this Agreement. As part of the responsible officer’s certification, WP must provide to the IRS the factual information described in section 8.03(C) of this Agreement. WP must also satisfy the requirements of section 8.06 of this Agreement with respect to the report of the periodic review and must comply with the IRS review referenced in section 8.07 of this Agreement.

(B) Coordination with FATCA Requirements as a Participating FFI, Registered Deemed-Compliant FFI, or Registered Deemed-Compliant Model 1 IGA FFI. As a condition for maintaining this Agreement, WP must comply with the FATCA requirements applicable to its chapter 4 status (including any applicable compliance procedures). Therefore, WP must, as part of the compliance procedures described in this section 8 (including the periodic review described in section 8.04 of this Agreement and in making the periodic certification described in section 8.03 of this Agreement) determine whether it is compliant with its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI when it acts as a withholding foreign partnership. See the compliance procedures, if any, required under WP’s FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI when WP acts as a nonwithholding foreign partnership. If WP is a participating FFI, WP will be able to make the certification described in section 8.03 of this Agreement, and the certification described in the FFI agreement, to the extent provided in future published guidance or other instructions.

(A) Responsible Officer. WP must appoint an individual as the responsible officer (as defined in section 2.63 of this Agreement). The responsible officer must be identified on the IRS FATCA registration website as the WP’s responsible party and as the responsible officer for purposes of compliance with its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI. The responsible officer (or the responsible officer’s designee) must establish a compliance program that meets the requirements of this section 8.02 and must make the periodic certifications to the IRS described in section 8.03 of this Agreement. The responsible officer of WP must be a partner of WP or an officer or agent of the general partner or tax matters partner (as defined in section 6231(a)(7)) of WP with sufficient authority to fulfill the duties of a responsible officer described in this section 8.02. The responsible officer (or a delegate appointed by the responsible officer) must also serve as the point of contact for the IRS for all issues related to this Agreement and for complying with IRS requests for information or additional audit procedures under section 8.07 of this Agreement.

(B) Compliance Program. The responsible officer (or the responsible officer’s designee) must establish a program for WP to comply with the requirements of this Agreement that includes the following:

(1) Written Policies and Procedures. The responsible officer (or the responsible officer’s designee) must ensure the drafting and updating, as necessary, of written policies and procedures sufficient for WP to satisfy the documentation, withholding, reporting, and other obligations of this Agreement with its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI. Such written policies and procedures must include a process for an employee or partner of WP to raise issues to the responsible officer (or the responsible officer’s designee) that concern WP’s compliance with this Agreement.

(2) Training. The responsible officer (or the responsible officer’s designee) must communicate such policies and procedures to persons responsible for obtaining, reviewing, and retaining a record of documentation under the requirements of section 4 of this Agreement, making distributions and allocations to partners on behalf of WP that are subject to withholding under section 3 of this Agreement, or reporting distributions or allocations to partners under section 6 of this Agreement. This includes any person that is responsible for the performance of WP’s due diligence procedures under its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI.

(3) Systems. The responsible officer (or the responsible officer’s designee) must ensure that systems and processes are in place that will allow WP to fulfill its obligations under this Agreement and its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI. For example, in order to fulfill WP’s obligations to report on Forms 1042–S, Schedules K–1, and 8966 under section 6 of this Agreement, WP must establish systems for documenting partners and for recording the information with respect to each such partner that WP is required to report under that section.

(4) Monitoring of Business Changes. The responsible officer (or the responsible officer’s designee) must monitor business practices and arrangements that affect WP’s compliance with this Agreement, including, for example, changes in WP’s partners that give rise to documentation, withholding, or reporting obligations under this Agreement, and its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI.

(5) Periodic Review. The responsible officer (or the responsible officer’s designee) must designate an auditor that meets the qualifications described in section 8.04(A) of this Agreement to perform the periodic review described in section 8.05 of this Agreement.

(6) Periodic Certification. The responsible officer (or the responsible officer’s designee) must make the periodic certification as described in section 8.03 of this Agreement, including ensuring that corrective actions are taken in response to any material failures (as defined in section 8.03(D) of this Agreement) of WP’s compliance with this Agreement (as defined in section 8.03(D) of this Agreement) and its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI.

Sec. 8.03. Periodic Certification by Responsible Officer. In accordance with the compliance period described in section 8.03(E) of this Agreement, the responsible officer of WP must make the applicable certification of compliance described in section 8.03(A) or (B) of this Agreement. The responsible officer of WP must make the certifications of compliance in such manner as the IRS may prescribe in future guidance or other instructions. The responsible officer must consider the results of WP’s periodic review described in section 8.05 of this Agreement in making the periodic certification.

(A) Certification of Effective Internal Controls. The responsible officer must certify to the following and disclose any material failures that occurred during the certification period or during any prior period if the material failure was not disclosed as part of a prior certification or written disclosure made by WP to the IRS—

(1) WP has established a compliance program that meets the requirements described in section 8.02(B) of the WP Agreement that is in effect as of the date of the certification and during the certification period;

(2) A periodic review was conducted for the certification period in accordance with sections 8.04 through 8.06 of the WP Agreement, and based on the review and other steps taken by WP, WP maintains effective internal controls over its documentation, withholding, and reporting obligations under the WP Agreement and under its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI;

(3) Based on the periodic review and other information known to the responsible officer, there are no material failures as defined in section 8.03(D) of the WP Agreement or, if there are any material failures, such failures are identified as part of this certification as well as the actions taken to remediate such failures and to prevent their reoccurrence by the date of this certification;

(4) With respect to any failure to withhold, deposit, or report to the extent required under the WP Agreement, WP has corrected such failure by paying any taxes due (including interest and penalties) and filing the appropriate return (or amended return); and

(5) All partnerships and trusts to which WP applies the agency option either have provided documentation or other information to WP to include in WP’s periodic review, or have provided the responsible officer of WP with a certification of effective controls meeting the requirements of section 8.03(A) of the WP Agreement and have represented to WP that there are no material failures as defined in section 8.03(D) of the WP Agreement, or have disclosed any such failures to WP and the actions taken by the partnership or trust to remediate such failures.

(B) Qualified Certification. If the responsible officer has identified an event of default or a material failure that WP has not corrected as of the date of the certification, the responsible officer must certify to the following statements—

(1) The responsible officer (or the responsible officer’s designee) has identified an event of default as defined in section 8.05 of the WP Agreement or has determined that as of the date of the certification, there are one or more material failures as defined in section 8.03(D) of this Agreement with respect to WP’s compliance, or the compliance of a partnership or trust to which WP applies the agency option, and that appropriate actions will be taken to prevent such failures from recurring;

(2) With respect to any failure to withhold, deposit, or report to the extent required under the WP Agreement, WP will correct such failure by paying any taxes due (including interest and penalties) and filing the appropriate return (or amended return); and

(3) The responsible officer (or an officer of the partnership or trust to which WP applies the agency option) will respond to any notice of default (if applicable) or will provide to the IRS, to the extent requested, a description of each material failure and a written plan to correct each such failure.

(C) Factual Information. At the same time WP provides the periodic certification, WP shall also report certain factual information regarding its partners, withholdable payments, and amounts subject to chapter 3 withholding and must certify to the accuracy of the information. The information requested will be limited to certain information reviewed as part of WP’s periodic review procedure described in section 8.05 of this Agreement. The IRS will consider reportable amounts received by WP, the number of WP’s partners, and whether WP was required to file Schedules K–1 for its U.S. partners and Forms 8966 with respect to its partners that hold U.S. accounts (or U.S. reportable accounts) during the certification period to determine the extent of the factual information to request. The IRS will prescribe in future published guidance or other instructions the factual information that the WP is required to report with the periodic certification and the manner in which such information must be reported.

(A) Independent Auditor. The periodic review may be performed by an internal auditor that is an employee of WP or the general partner or tax matters partner of WP (internal auditor) or a certified public accountant, attorney, or third-party consultant (external auditor), or any combination thereof.

(1) Internal Auditor. WP may designate an internal auditor to perform the periodic review (or a portion of the periodic review) only when the internal auditor is competent with respect to the requirements of this Agreement and WP’s FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI. The internal auditor must also be able to report findings that reflect the independent judgment of the auditor. The internal auditor must not report directly to the responsible officer or any other employee of WP, or officer, agent, or employee of the general partner or tax matters partner of WP with direct authority over the persons performing functions in connection with WP’s obligations under this Agreement and WP’s FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI. The IRS has the right to request the performance of the periodic review by an external auditor if the IRS, in its sole discretion, reasonably believes that the auditor selected by WP was not independent or did not perform an effective periodic review under this Agreement.

(2) External Auditor. WP may engage an external auditor that is a certified public accountant, attorney, or third-party consultant that is regularly engaged in the practice of performing reviews of clients’ policies, procedures, and processes for complying with accounting, tax, or regulatory requirements (including for assisting clients in determining such compliance). The external auditor must be independent of WP under the standards applicable to a certified public accountant with respect to the engagement or, in the case of an auditor other than a certified public accountant, any standard of independence otherwise applicable to the auditor for such an engagement. The external auditor is not required to make an attestation or render an opinion regarding WP’s compliance with this Agreement or WP’s compliance with its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI, but the auditor must be able to perform the periodic review as specified in section 8.05 of this Agreement and provide the report described in section 8.06 of this Agreement. WP must permit the external auditor access to all relevant records of WP for purposes of performing the audit, including information regarding specific partners. Additionally, the engagement between the external auditor and WP must impose no restrictions on WP’s ability to provide the report described in section 8.06 of this Agreement to the IRS. However, the external auditor is not required to divulge the identity of WP’s foreign partners to the IRS. WP must permit the IRS to communicate directly with the external auditor and any legal prohibitions that prevent the IRS from communicating directly with the auditor must be waived.

Sec. 8.05. Scope and Timing of Review. The responsible officer of WP must require the auditor to perform a review of WP’s internal controls, test a sample of distributions and allocations related to WP’s documentation, withholding, reporting, and other obligations under this Agreement and its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI, and identify deficiencies in meeting these obligations. To the extent WP applies the joint account option with respect to another partnership or trust as described in section 9.01 of this Agreement or acts as a withholding foreign partnership for any indirect partners as described in section 9.03 of this Agreement, the review must include such indirect partners, beneficiaries, or owners in addition to WP’s direct partners. In addition, if WP applies the agency option to a partnership or trust as described in section 9.02 of this Agreement, the review must include the partners, beneficiaries, or owners of such partnership or trust unless the partnership or trust conducts its own review in accordance with this section 8 of this Agreement and provides the required certification to the responsible officer of WP. Unless otherwise approved by the IRS, the review must include the steps described in sections 8.05(A) through (E) of this Agreement. The review may include recommendations for either corrective actions or enhancements to WP’s compliance program. WP is required to arrange for the performance of one review for the certification period to evaluate WP’s documentation, withholding, and reporting practices for the most recent calendar year. The review is not required to include statistical sampling procedures for testing transactions, but must require that the auditor document its methodology for sampling determinations.

(A) Documentation. The auditor must—

(1) Verify that WP has training materials, manuals, and directives that instruct the appropriate persons how to request, collect, review, and maintain documentation in accordance with this Agreement, including procedures for identifying and communicating changes in circumstances;

(2) Review WP’s procedures and interview the appropriate persons to determine if appropriate documentation is requested from partners, and, if obtained, that it is reviewed and maintained in accordance with this Agreement;

(3) Verify that WP follows procedures designed to inform partners that claim a reduced rate of withholding under an income tax treaty about any applicable limitation on benefits provisions;

(4) Review WP’s documentation obtained for WP’s partners to ensure that WP obtained the treaty statements required by section 4.03(B) of this Agreement;

(5) Review information contained in documentation obtained for WP’s partners or memoranda and any correspondence associated with the partners (the partners’ files) to ensure that WP obtained documentation that meets the general requirements described in section 4 of this Agreement;

(6) Review information contained in the partners’ files to determine if the documentation validity standards of section 4.10 of this Agreement have been met. For example, the auditor must verify that WP is withholding at the correct rate after any change in circumstances (e.g., a change of address to a U.S. address or change of account holder status from foreign to U.S.);

(7) Review WP’s partners’ files to ensure that WP is obtaining, reviewing, and maintaining documentation in accordance with its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI; and

(8) Review WP’s agreements with partnerships or trusts described in section 9 of this Agreement to ensure that the obligations imposed meet the requirements provided in section 9 of this Agreement, including, for example, the receipt of allocation information.

(B) Withholding Responsibilities. The auditor must—

(1) Perform test checks, using a valid sample of WP’s direct partners that are recalcitrant account holders (if applicable) and nonparticipating FFIs, to verify that WP is withholding as required under chapter 4;

(2) Perform test checks, using a valid sample of foreign partners for which no withholding is required under chapter 4 based on the partner’s chapter 4 status, to verify that WP withheld the proper amounts; and

(3) Verify that amounts withheld by WP were timely deposited in accordance with section 3.05 of this Agreement.

(C) Return Filing and Information Reporting. The auditor must—

(1) Obtain copies of original and amended Forms 1042, and any schedules, statements, or attachments required to be filed with those forms, and verify that the forms have been filed and determine whether the amounts of income, taxes, and other information reported on those forms are accurate by—

(i) Reviewing work papers used to prepare these forms;

(ii) Interviewing personnel responsible for preparing these forms;

(iii) Reviewing copies of Forms 1042–S received from withholding agents for reconciling amounts received by WP with the amounts distributed to, or included in the distributive share of, WP’s partners;

(iv) Reviewing account statements and correspondence from withholding agents;

(v) Determining that adjustments to the amount of tax shown on Form 1042 (and any claim by WP for refund or credit) properly reflect the adjustments to withholding made by WP using the reimbursement or set-off procedures under section 7 of this Agreement and that the adjustments are supported by sufficient documentation;

(vi) Reconciling amounts shown on Forms 1042 with amounts shown on Form 1042–S (including the amount of taxes reported as withheld); and

(vii) In the case of collective credits or refunds, reviewing the statements attached to the amended Forms 1042 filed to claim a collective credit or refund, ascertaining their accuracy, and—

(a) Determining the causes of any overwithholding reported and ensure WP did not issue Forms 1042–S to partners that were included as part of its collective credit or refund claim;

(b) Determining that WP repaid the appropriate partners and that the amount of the claim is accurate and supported by adequate documentation for reducing the rate of withholding; and

(c) Determining that WP did not include payments made to a partner described in section 7.02 of this Agreement or a partnership or trust described in section 9.01 of this Agreement.

(2) Obtain copies of original and amended Forms 1042–S, 1065, and Schedules K–1 filed by WP together with the work papers used to prepare those forms and determine whether the amounts reported on those forms are accurate by—

(i) Reviewing the Forms 1042–S received from withholding agents;

(ii) Reviewing the Form 1065, if required, and if no Form 1065 was required to be filed, determining whether the exemption from filing was properly applied;

(iii) Reviewing a valid sample of Schedules K–1 or income statements issued by WP to partners, if any;

(iv) Reconciling any payments and tax reported on Forms 1042–S received from withholding agents with amounts (including characterization of income) and taxes reported by WP as withheld on Forms 1042–S and determining the reason(s) for any variance;

(v) Interviewing personnel responsible for preparing the Forms 1042–S, Schedules K–1, and income statements issued to partners and the work papers used to prepare those forms; and

(vi) Determining, in any case in which WP utilized the reimbursement or set-off procedure, that WP satisfied the requirements of section 7 of this Agreement and that the adjusted amounts of tax withheld are properly reflected on Forms 1042–S.

(3) Obtain copies of original and amended Forms 8966, and determine whether the amounts of income and other information reported on Forms 8966 are accurate by—

(i) Reviewing a sample of U.S. accounts (or U.S. reportable accounts), accounts held by nonparticipating FFIs, and recalcitrant account holders to determine that such accounts were reported in accordance with WP’s FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI;

(ii) If WP is an NFFE, confirming that any direct partners that are passive NFFEs with one or more substantial U.S. owners were reported in accordance with § 1.1472–1(c)(3);

(iii) Confirming with respect to any passthrough partner that provides information regarding an account holder (or interest holder) that is an NFFE (other than an excepted NFFE) with one or more substantial U.S. owners (or controlling persons that are specified U.S. persons under an applicable Model 1 or Model 2 IGA) that such substantial U.S. owners (or controlling persons that are specified U.S. persons) were reported to the extent required under section 6.05(C) of this Agreement;

(iv) Reviewing a sample of the documentation provided by a partnership or trust to which WP applied the agency option, confirming that WP reported on Form 8966 to the extent required under section 9 of this Agreement;

(v) Reviewing work papers used to prepare these forms; and

(vi) Interviewing personnel responsible for preparing these forms.

(D) Significant Change in Circumstances. The auditor must verify that in the course of the audit it has not discovered any significant change in circumstances, as described in section 10.05(A), (D), or (E) of this Agreement.

(A) In General. The performance of the periodic review must be documented in a written report addressed to the responsible officer of WP and must be available to the IRS upon request (with a certified translation into English if the report is not in English). The report must describe the scope of the review, the steps performed to evaluate internal controls, and the test transactions, including the methodology for sampling determinations. The report must identify any deficiencies noted by the auditor, especially those deficiencies that the auditor concludes are material failures, and, may include explanatory footnotes to clarify the results of the report. Recommendations may be included but are not required to be provided in the report.

(B) Partnership or Trust to which WP Applies the Agency Option. Any partnership or trust to which WP applies the agency option and that does not provide documentation and information to WP for WP’s periodic review, must provide a written certification to WP as described in section 8.03 of this Agreement regarding its compliance with the requirements of its agreement with WP. Such certification must be available to the IRS upon a request made as part of the review described in section 8.07 of this Agreement (with a certified translation into English if the certification is not in English).

(C) Retention of Report. The report and certifications described in this section 8.06 must be retained by WP for as long as this Agreement is in effect (including renewals of this Agreement).

(A) In General. Based upon the certifications made by the responsible officer and disclosure of material failures, the information reported on Forms 1042, 1042–S, 1065, and 8966 and Schedules K–1 filed with the IRS during the certification period, or otherwise at the IRS’s discretion for compliance purposes, the IRS may initiate requests of WP under this section 8.07.

(B) Periodic Review Report. The IRS may request through written correspondence to the responsible officer of WP a copy of WP’s periodic review report that was issued for any prior certification period or the periodic review report of any partnership or trust to which WP applied the agency option that WP has an agency agreement during the current certification period (with a certified translation into English if the report is not in English). WP is required to provide the report within 30 calendar days of such request.

(C) Correspondence Review. The IRS may, in its discretion, conduct additional fact finding through a correspondence review. In such a review, the IRS will contact the responsible officer of WP in writing and request information about WP’s compliance with this Agreement or the compliance of a partnership or trust to which WP applied the agency option, including, for example, information about documentation, withholding, or reporting processes, its periodic review, and information about any material failures that were disclosed to the IRS (including remediation plans). The IRS may request phone or video interviews with relevant personnel or a partnership or trust to which WP applied the agency option as part of such review. WP is required to respond within a reasonable period of time to any such requests.

(D) Additional Review Procedures. In limited circumstances, the IRS may direct WP or any partnership or trust described in sections 9.01 and 9.02 of this Agreement with which WP has an agreement to perform additional, specified review procedures. The IRS reserves the right to require WP or a partnership or trust to which WP applied the agency option to engage an external auditor to perform the additional review procedures regardless of whether such auditor performed the periodic review. The IRS will provide the responsible officer of WP with a written plan describing the additional review procedures and will provide a period of not more than 120 days within which the WP must provide to the IRS a report covering the review’s findings.

(A) In General. WP may enter an agreement with a nonwithholding foreign partnership or nonwithholding foreign trust that is either a simple or grantor trust described in this section 9.01(A) to apply the simplified joint account documentation, reporting, and withholding procedures provided in section 9.01(B) of this Agreement. WP and the partnership or trust that apply this section 9.01 to any calendar year must apply these rules to the calendar year in its entirety. WP and the partnership or trust may not apply this section 9.01 to any calendar year in which the partnership or trust has failed to make available to WP or WP’s auditor the records described in this section 9.01(A)(5) within 90 days after these records are requested and the partnership or trust must waive any legal prohibitions against providing such records to WP. If the partnership or trust has failed to make these records available within the 90-day period, or if WP and the partnership or trust fail to comply with any other requirements of this section 9.01, WP must apply the provisions of §§ 1.1441–1 and 1.1441–5 to the partnership or trust as a nonwithholding foreign partnership or nonwithholding foreign trust, must correct its withholding for the period during which the failure occurred in accordance with section 7.03 of this Agreement, and cannot apply this section 9.01 to subsequent calendar years. WP and the partnership or trust that apply this section 9.01 to any calendar year are not required to apply this section 9.01 to subsequent calendar years.

WP may not apply the rules of section 9.01(B) unless it has made a PR election under section 6.02(D) of this Agreement.

A partnership or trust is described in this section 9.01(A) of this Agreement if the following conditions are met.

(1) The partnership or trust is a certified deemed-compliant FFI (other than a registered deemed-compliant Model 1 IGA FFI), an owner-documented FFI, an exempt beneficial owner, or an NFFE (other than a WP or WT);

(2) The partnership or trust is a direct partner of WP;

(3) None of the partnership’s or trust’s partners, beneficiaries, or owners is a flow-through entity or intermediary;

(4) None of the partnership’s or trust’s partners, beneficiaries, or owners is a U.S. person and none of its foreign partners, beneficiaries, or owners is subject to withholding or reporting under chapter 4 (which would include a nonparticipating FFI or certain passive NFFEs); and

(5) The partnership or trust agrees to make available upon request to WP and WP’s auditor for purposes of WP’s compliance review under section 8 of this Agreement (including to respond to IRS inquiries regarding its compliance review) records that establish that the partnership or trust has provided WP with documentation for purposes of chapters 3 and 4 for all of its partners, beneficiaries, or owners.

WP may enter an agreement with a nonwithholding foreign partnership or nonwithholding foreign trust that is either a simple or grantor trust described in section 9.02(A) of this Agreement under which the partnership or trust agrees to act as an agent of WP with respect to its partners, beneficiaries, or owners, and, as WP’s agent, to apply the provisions of the WP Agreement to the partners, beneficiaries, or owners. By entering into an agreement with a partnership or trust as described in this section 9.02, WP is not assigning its liability for the performance of any of its obligations under the WP Agreement. WP and the partnership or trust to which WP applies the rules of this section 9.02 (agency option) are jointly and severally liable for any tax, penalties, and interest that may result from the failure of the partnership or trust to meet any of the obligations imposed by its agreement with WP. WP and the partnership or trust that apply the agency option to any calendar year must apply these rules to the calendar year in its entirety. Generally, WP and the partnership or trust that apply the agency option to any calendar year are not required to apply the agency option to subsequent calendar years. If, however, WP withholds and reports any adjustments required by corrected information in a subsequent calendar year under section 9.02(B)(2) of this Agreement, WP must apply the agency option to that calendar year in its entirety.

If the partnership or trust is included in WP’s periodic review of compliance as described in section 9.02(A)(5) of this Agreement, WP and the partnership or trust may not apply the agency option to any calendar year in which the partnership or trust has failed to make available to WP or WP’s auditor the records described in this section 9.02 within 90 days after these records are requested and the partnership or trust must waive any legal prohibitions against providing such records to the WP. If, for any calendar year, the partnership or trust has failed to make these records available within the 90-day period, or if WP and the partnership or trust fail to comply with any other requirement of this section 9.02, WP must apply §§ 1.1441–1 and 1.1441–5 to the partnership or trust as a nonwithholding foreign partnership or nonwithholding foreign trust, correct its withholding for the period in which the failure occurred in accordance with section 7.03 of this Agreement, and cannot apply this section 9.02 to subsequent calendar years.

WP may not apply the rules of this section 9.02 unless it has made a PR election under section 6.02(C) of this Agreement.

(A) Eligible partnership or trust. A partnership or trust is described in this section 9.02(A) of this Agreement if the following conditions are met:

(1) The partnership or trust is either a direct partner of WP or an indirect partner of WP that is a direct partner, beneficiary, or owner of a partnership or trust to which WP also applies this section 9.02.

(2) The partnership or trust is an FFI that is a certified deemed-compliant FFI (other than a registered deemed-compliant Model 1 IGA FFI), owner-documented FFI, an NFFE, or an exempt beneficial owner.

(3) None of the partnership’s or trust’s partners, beneficiaries, or owners is a withholding foreign trust, withholding foreign partnership, participating FFI, registered deemed-compliant FFI, registered deemed-compliant Model 1 IGA FFI, or qualified intermediary acting as an intermediary for a payment made by WP to the partnership or trust.

(4) WP may not act as a withholding foreign partnership with respect to any direct or indirect partner of the partnership or trust that is a U.S. non-exempt recipient, unless the U.S. non-exempt recipient is a partner of an owner-documented FFI or passive NFFE to which WP applies the agency option and is included in WP’s U.S. payee pool (described in section 6.02(C) of this Agreement).

(5) The partnership or trust agrees to comply with the documentation requirements described in section 4 of this Agreement.

(6) The partnership or trust agrees to comply with the compliance procedures described in section 8.05 of this Agreement in order to allow the responsible officer of WP to make a certification to the IRS regarding the partnership’s or trust’s compliance with this section 9.02 by (i) providing WP with the certification required under section 8.03 of this Agreement for each certification period, or (ii) providing WP with documentation or other information for review. The partnership or trust must also agree to respond (either directly or through WP) to IRS inquiries regarding its compliance review described in section 8.07 of this Agreement, including, if applicable, providing the WP and the IRS with the auditor’s report described in section 8.06 of this Agreement.

(A) General Requirements. WP may act as a withholding foreign partnership for reportable amounts distributed to, or included in the distributive share of, passthrough partners and indirect partners if such indirect partner is not a U.S. non-exempt recipient. Notwithstanding the preceding sentence, WP may act as a withholding foreign partnership with respect to an indirect partner that is a U.S. non-exempt recipient if the indirect partner is included in a passthrough partner’s chapter 4 withholding rate pool of recalcitrant account holders or U.S. payees. WP does not need to use the agency option described in section 9.02 of this Agreement or make the pooled reporting election described in section 6.02(D) of this Agreement to apply the procedures described in this section 9.03.

(A) Automatic Termination. Notwithstanding section 10.02 of this Agreement, this Agreement will terminate automatically in the event that the auditor or the IRS (including during its compliance review described in section 8.07 of this Agreement) discovers that WP was not in possession of Forms W–8 or W–9, as applicable, or documentary evidence, as permitted under section 4.01(B), for any direct partner at any time that withholding or reporting was required under section 3.02 of this Agreement. The automatic termination will be effective as of December 31 of the year in which the auditor or the IRS makes that discovery.

(B) Cure and Reinstatement after Automatic Termination. This Agreement will be reinstated, effective the same date it automatically terminated under section 10.03(A) of this Agreement, if—

(1) WP obtains appropriate Forms W–8 or W–9 or documentary evidence, as permitted under section 4.01(B), (that relate to the time withholding or reporting was required) for each such undocumented partner before March 15 of the year following the year in which the Agreement automatically terminated, or

(2) All such undocumented partners have ceased to be partners in WP before March 15 of the year following the year in which the Agreement automatically terminated.

(C) Payment of Underwithholding and Reporting upon Termination. In the event of automatic termination of this Agreement under this section 10.03, WP must pay any underwithholding of tax, interest, and penalties that the IRS determines is attributable to each undocumented partner for the period during which the partner was undocumented based on the presumption rules, and, if WP has made a pooled reporting election for chapter 3 purposes, WP must file partner specific Forms 1042–S for amounts subject to chapter 3 withholding for which no chapter 4 withholding is required and Schedules K–1 reporting the names and addresses and other required information, as appropriate, for every undocumented partner from the earliest time the documentation was required for that undocumented partner through the date of termination. WP may, however, continue to report on a pooled basis for documented foreign direct partners through this period.

(D) Reinstatement after Termination (other than Automatic Termination). After the date of termination of this Agreement, WP may not act as a withholding foreign partnership, and must so notify any persons to which WP has furnished a withholding foreign partnership certificate. After the date of termination of this Agreement, the IRS may reinstate this Agreement (or the IRS may require WP to enter into a new withholding foreign partnership agreement) on such terms and conditions and with such modifications as the IRS may determine.

Sec. 10.04. Significant Change in Circumstances. For purposes of this Agreement, a significant change in circumstances includes, but is not limited to—

(A) Any change in circumstances that would result in a termination of WP under section 708;

(B) A change in U.S. federal law or policy, or applicable foreign law or policy, that affects the validity of any provision of this Agreement, materially affects the procedures contained in this Agreement, or affects WP’s ability to perform its obligations under this Agreement;

(C) A ruling of any court that affects the validity of any material provision of this Agreement;

(D) A significant change in WP’s business practices that affects WP’s ability to meet its obligations under this Agreement;

(E) If applicable, a material change in the know-your-customer rules and procedures set forth in the Attachments to this Agreement when WP relied on documentary evidence as permitted in section 4.01(B) of this Agreement;

(F) If WP is an FFI (other than a retirement fund), termination of its status as a participating FFI, registered deemed-compliant FFI, or a registered deemed-compliant Model 1 IGA FFI; or

(G) If WP is acting as a sponsoring entity on behalf of a sponsored FFI or sponsored direct reporting NFFE, it fails to comply with the due diligence, withholding, reporting, and compliance requirements of a sponsoring entity.

Sec. 10.05. Events of Default. For purposes of this Agreement, an event of default occurs if WP fails to perform any material duty or obligation required under this Agreement and the responsible officer had actual knowledge of or should have known the facts relevant to the failure to perform any material duty. An event of default includes, but is not limited to, the occurrence of any of the following:

(A) WP fails to implement adequate procedures, accounting systems, and internal controls to ensure compliance with this Agreement;

(B) WP underwithholds an amount that WP is required to withhold under chapter 3 or 4 and fails to correct the underwithholding or to file an amended Form 1042 reporting, and paying, the appropriate tax;

(C) WP makes excessive refund claims;

(D) WP fails to file required Forms, 1042, 1042–S, 8966, 1065, or Schedules K–1 by the due date specified on such forms or files forms that are materially incorrect or fraudulent;

(E) If WP is an FFI, WP fails to materially comply with its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI;

(F) If WP is a sponsoring entity, WP fails to comply with the due diligence, withholding, reporting, and compliance requirements of a sponsoring entity;

(G) WP fails to perform a periodic review when required or to document the findings of such review in a written report;

(H) WP fails to inform the IRS within 90 days of any significant change in its business practices to the extent that change affects WP’s obligations under this Agreement;

(I) WP fails to cure a material failure identified in the qualified certification described in section 8.03(B) of this Agreement or identified by the IRS;

(J) WP makes any fraudulent statement or a misrepresentation of a material fact with regard to this Agreement to the IRS, a withholding agent, or WP’s auditor;

(K) The IRS determines that WP’s auditor is not sufficiently independent to adequately perform its audit function and WP fails to arrange for a periodic review conducted by an auditor approved by the IRS;

(L) WP fails to make deposits in the time and manner required by section 3.04 of this Agreement or fails to make adequate deposits, taking into account the procedures of section 7.05 of this Agreement;

(M) If applicable, WP fails to inform the IRS of any change in the know-your-customer rules described in the Attachment to this Agreement within 90 days of the change becoming effective when WP relied on documentary evidence as permitted in section 4.01(B) of this Agreement;

(N) WP fails to cooperate with the IRS on its compliance review described in section 8.07 of this Agreement;

(O) A partnership or trust to which WP applies the agency option is in default with the agency agreement and WP fails to terminate that agreement within the time period specified in section 10.02 of this Agreement; or

(P) WP fails to materially comply with the requirements of a nonwithholding foreign partnership under chapter 3 with respect to any partner for which it does not act as a withholding foreign partnership.

Sec. 10.06. Notice and Cure. Upon the occurrence of an event of default, the IRS will deliver to WP a notice of default specifying each event of default. WP must respond to the notice of default within 60 days (60-day response) from the date of the notice of default. The 60-day response shall contain an offer to cure the event of default and the time period in which to cure or shall state why WP believes that no event of default has occurred. If WP does not provide a 60-day response, the IRS will deliver a notice of termination as provided in section 10.02 of this Agreement. If WP provides a 60-day response, the IRS shall either accept or reject WP’s statement that no default has occurred or WP’s proposal to cure the event of default.

If the IRS rejects WP’s statement that no default has occurred or rejects WP’s proposal to cure the event of default, the IRS may offer a counter-proposal to cure the event of default with which WP will be required to comply within 30 days. If WP fails to provide a 30-day response, the IRS will send a notice of termination in accordance with section 10.02 of this Agreement, which WP may appeal within 30 days of the date of the notice by sending a written appeal to the address specified in section 11.06 of this Agreement. If WP appeals the notice of termination, this Agreement shall not terminate until the appeal has been decided. If an event of default is discovered in the course of an audit, WP may cure the default, without following the procedures of this section 10.06, if the external auditor’s report describes the default and the actions that WP took to cure the default and the IRS determines that the cure procedures followed by WP were sufficient. If the IRS determines that WP’s actions to cure the default were not sufficient, the IRS shall issue a notice of default and the procedures described in this section 10.06 shall be followed.

Sec. 10.07. Renewal. If WP is an FFI or an NFFE that is a sponsoring entity and intends to renew this Agreement for an additional term, it shall submit an application for renewal to the IRS on the IRS FATCA registration website, as provided in this revenue procedure, no earlier than one year prior to the expiration of this Agreement and no later than six months prior to the expiration of this Agreement, in accordance with the instructions to Form 8957, Foreign Account Tax Compliance Act (FATCA) Registration, or as otherwise provided in published guidance. Any such application for renewal must contain an update of the information provided by WP to the IRS in connection with the application to enter into this Agreement and any other information the IRS may request in connection with the renewal process. Either the IRS or WP may seek to negotiate a new withholding foreign partnership agreement rather than renew this Agreement.

A WP not described in the preceding paragraph must renew its WP agreement by submitting a request for renewal to the IRS at the address provided in section 11.06 of this Agreement.

(A) Calendar Year 2014. If WP applies to renew its WP Agreement and the renewal is approved on or before August 31, 2014, this Agreement is effective on June 30, 2014. If WP is not a retirement fund or an NFFE that is not a sponsoring entity and applies to renew its WP Agreement on the IRS FATCA registration website after August 31, 2014, and the renewal is approved, this Agreement is effective on the date of approval. If WP is a retirement fund or an NFFE that is not a sponsoring entity and renews its WP Agreement after August 31, 2014, this Agreement is effective on the date of renewal as provided in an approval notice sent by the IRS. The renewal is approved on the later of the date WP is issued a GIIN or the date WP submits a request for renewal.

If WP is a new WP applicant (other than a retirement fund or an NFFE that is not a sponsoring entity) that applies to enter into a WP Agreement on or before August 31, 2014, and its application is approved, the effective date of this Agreement is June 30, 2014, provided that it obtains a GIIN, if it has not already done so, within 90 days of such approval. If WP is a new WP applicant (other than a retirement fund or an NFFE that is not a sponsoring entity) that applies to enter into a WP Agreement after August 31, 2014, and the application is approved, the effective date of this Agreement is the date it is issued a WP–EIN, provided that it obtains a GIIN, if it has not already done so, within 90 days of such approval. If WP is a new WP applicant that is a retirement fund or an NFFE that is not a sponsoring entity that applies to enter into a WP Agreement and its application is approved, the effective date of this Agreement is the date it is issued a WP–EIN.

(B) Calendar Years after 2014. For calendar years after 2014, the effective date of this Agreement is January 1 of the current calendar year if WP’s application for WP status is submitted on or before March 31. If WP’s application for WP status is submitted on or after April 1, the effective date of this Agreement is January 1 of the calendar year following the year in which the application was submitted. WP must be in compliance with this Agreement beginning January 1 of the calendar year in which this Agreement is effective.

(A) In General. If this Agreement is effective beginning in calendar year 2014, WP may act as a WP for the entire calendar year if WP acts in accordance with Revenue Procedure 2003–64 (as amended) for amounts subject to chapter 3 withholding (as defined in section 2.04 of the WP agreement) received before June 30, 2014, as if WP’s WP agreement were effective on January 1, 2014, and expired on June 30, 2014, and for amounts subject to chapter 3 withholding and withholdable payments received between June 30, 2014, and September 1, 2014, WP applies the principles described in section 12.02(B) of this Agreement. For the period beginning on September 1, 2014, through the term of this Agreement, WP must comply with this Agreement provided that this Agreement has not been terminated.

(B) Special Procedures for Payments Received Prior to September 1, 2014. If WP receives a withholdable payment or an amount subject to chapter 3 withholding prior to September 1, 2014, WP may represent itself to its withholding agent as a withholding foreign partnership, provided that WP complies with its obligations under the WP agreement in effect prior to June 30, 2014, and, if WP is renewing this Agreement, it submits a request for renewal on or before August 31, 2014. However, because this Agreement requires WP to assume primary chapter 4 withholding responsibilities with respect to its partners under sections 1471 and 1472, if WP makes a distribution for which withholding is required under chapter 4 beginning July 1, 2014, with respect to a partner and does not withhold under chapter 4 to the extent required under the revised WP agreement, WP must apply the procedures referenced in § 1.1474–2(b) to satisfy any underwithholding.

SECTION 5. WITHHOLDING FOREIGN TRUST AGREEMENT

Section 1. PURPOSE AND SCOPE

Section 2. DEFINITIONS

Section 3. WITHHOLDING RESPONSIBILITY

Section 4. DOCUMENTATION REQUIREMENTS

Section 5. WITHHOLDING FOREIGN TRUST WITHHOLDING CERTIFICATE

Section 6. TAX RETURN AND INFORMATION REPORTING OBLIGATIONS

Section 7. ADJUSTMENTS FOR OVER– AND UNDERWITHHOLDING; REFUNDS

Section 8. COMPLIANCE PROCEDURES

Section 9. CERTAIN PARTNERSHIPS AND TRUSTS AND INDIRECT BENEFICIARIES AND OWNERS

Section 10. EXPIRATION, TERMINATION AND DEFAULT

Section 11. MISCELLANEOUS PROVISIONS

Section 12. EFFECTIVE DATE OF AGREEMENT

The text of the WT agreement is set forth below. The IRS will no longer provide signed copies of the WT agreement. A reporting Model 2 FFI should interpret this Agreement by substituting the term “reporting Model 2 FFI” for “participating FFI” throughout this Agreement, except in cases where this Agreement explicitly refers to a reporting Model 2 FFI. A reporting Model 1 FFI and a nonreporting Model 2 FFI treated as a registered deemed-compliant FFI should apply this Agreement by substituting the term “reporting Model 1 FFI” or “nonreporting Model 2 FFI,” as applicable, for “registered deemed-compliant FFI” throughout this Agreement, except in cases where this Agreement explicitly refers to a reporting Model 1 FFI or nonreporting Model 2 FFI treated as a registered deemed-compliant FFI.

WHEREAS, WT has submitted an application in accordance with this revenue procedure to be a withholding foreign trust for purposes of § 1.1441–5(e)(5)(v);

WHEREAS, WT and the IRS desire to enter into an agreement to establish WT’s rights and obligations regarding documentation, withholding, information reporting, tax return filing, deposits, and refund procedures under sections 1441, 1442, 1443, 1461, 1471, 1472, 1474, 6048, 6302, 6402, and 6414 with respect to certain types of payments;

WHEREAS, WT represents that there are no legal restrictions that prohibit it from complying with the requirements of this Agreement;

WHEREAS, if WT is a foreign financial institution (other than a retirement fund), WT represents that it has agreed to comply with the requirements of the FFI agreement, in the case of a participating FFI; § 1.1471–5(f)(1) or the applicable Model 2 IGA, in the case of a registered deemed-compliant FFI (other than a reporting Model 1 FFI); or an applicable IGA, in the case of a reporting Model 1 FFI or a registered deemed-compliant Model 1 IGA FFI (as defined in section 2.15(C) of this Agreement) beginning on the effective date of this Agreement;

NOW, THEREFORE, in consideration of the following terms, representations, and conditions, the parties agree as follows:

(A) Coordination of Documentation Requirements with Chapter 4. If WT is an FFI (other than a retirement fund), WT is required to perform the due diligence procedures under its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI for each direct beneficiary or owner to determine if the beneficiary or owner is a holder of a U.S. account (or U.S. reportable account), and each direct beneficiary or owner that is a nonparticipating FFI and, if applicable, that is a recalcitrant account holder (or non-consenting U.S. account). See, however, the automatic termination provision of section 10.03(A) of this Agreement if WT is not in possession of valid documentation for any direct beneficiary or owner at any time that withholding or reporting is required. If WT is an NFFE, WT is required to determine the chapter 4 status of each beneficiary or owner to determine if reporting or withholding applies under section 1471 or 1472 on withholdable payments distributed to, or included in the distributive share of, the beneficiary or owner under the requirements of § 1.1471–3(d). See Notice 2014–33, 2014–21 I.R.B. 1033, which modifies the time in which WT is required to implement the applicable due diligence procedures with respect to an obligation held by an entity that is opened, issued, or executed on or after July 1, 2014, and before January 1, 2015.

If WT has determined that withholding is not required under chapter 4, WT must obtain, unless already collected, documentation that meets the requirements of this section 4 to determine whether withholding applies under chapter 3. See also WT’s FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI for when WT will have reason to know that a claim of chapter 4 status is unreliable or incorrect and for WT’s requirements following a change in circumstances. If WT is an NFFE, see § 1.1471–3(e)(4) for when WT will have reason to know that an entity’s claim of chapter 4 status is unreliable or incorrect and § 1.1471–3(c)(6)(ii)(E) for WT’s requirements following a change in circumstances.

(B) General Documentation Requirements. Except as otherwise provided in this section 4, WT must obtain a Form W–8 or Form W–9 from every direct beneficiary or owner that receives a distribution or distributive share of a reportable amount. Notwithstanding the previous sentence, if WT is an FFI and is subject to the know-your-customer rules for documenting its beneficiaries or owners (or subset of beneficiaries or owners), WT may obtain documentary evidence as set forth in the Attachment (or the documentation described in section 4.03(A)(3) of this Agreement) for the applicable jurisdiction from its direct beneficiaries or owners rather than a Form W–8 or Form W–9. If WT is an FFI obtaining documentary evidence, WT must also adhere to the know-your-customer rules that apply to WT with respect to the direct beneficiary or owner from whom the documentary evidence is obtained.

WT must review and maintain documentation in accordance with this section 4 and, in the case of documentary evidence obtained from direct beneficiaries or owners, in accordance with the know-your-customer rules set forth in the Attachments to this Agreement. See sections 2.03 and 2.41 of this Agreement. WT must make documentation (together with any associated withholding statements and other documents or information) available upon request for inspection by WT’s external auditor, if the performance of external audit procedures is requested by the IRS as described in section 8.07(D) of this Agreement. WT represents that none of the laws to which it is subject prohibits disclosure of the identity of any beneficiary or owner or corresponding beneficiary or owner information to WT’s external auditor, if required under section 8.07(D) of this Agreement.

Sec. 4.02. Documentation for Foreign Beneficiaries or Owners. WT may treat a beneficiary or owner as a foreign beneficial owner of an amount if the beneficiary or owner provides a valid Form W–8 (other than Form W–8IMY), or valid documentary evidence, to the extent permitted under section 4.01(B) of this Agreement, that supports the beneficiary’s or owner’s status as a foreign person. WT may treat a beneficiary or owner that has provided documentation as entitled to a reduced rate of withholding under chapter 3 if all the requirements for a reduced rate are met and the documentation provided by the beneficiary or owner supports entitlement to a reduced rate of withholding. Sections 4.03 through 4.06 of this Agreement describe the specific documentation requirements necessary for obtaining a reduced rate of withholding in certain circumstances.

Sec. 4.03. Treaty Claims. WT may not reduce the rate of withholding under chapter 3 based on a beneficiary’s or owner’s claim of treaty benefits unless WT has determined that no chapter 4 withholding is required and it obtains from the beneficiary or owner the documentation required by section 4.03(A) of this Agreement. In addition, WT agrees to establish procedures to inform beneficiaries or owners of the terms of the limitation on benefits provisions of a treaty (if applicable and regardless of whether those provisions are contained in a separate article entitled Limitation on Benefits) under which the beneficiary or owner is claiming benefits.

(A) Treaty Documentation. The documentation required by this section 4.03(A) is as follows:

(1) A Form W–8BEN or Form W–8BEN–E on which a claim of treaty benefits is made, including the appropriate limitation on benefits and section 894 certifications, if applicable, and a U.S. TIN or foreign TIN. A U.S. TIN or foreign TIN shall not be required, however, if the beneficiary or owner is a direct beneficiary or owner. If WT is acting as a withholding foreign trust for an indirect beneficiary or owner, the indirect beneficiary or owner is required to have either a U.S. TIN or a foreign TIN in order to claim treaty benefits unless it is claiming treaty benefits on income from marketable securities as described in § 1.1441–6(c);

(2) Documentary evidence, as permitted under section 4.01(B) of this Agreement, that has been obtained pursuant to the know-your-customer rules that apply to the direct beneficiary or owner, and the direct beneficiary or owner has made the treaty statement required by section 4.03(B) of this Agreement, if applicable; or

(3) The type of documentary evidence, as permitted under section 4.01(B) of this Agreement, required under § 1.1441–6 to establish entitlement to a reduced rate of withholding under a treaty and the direct beneficiary or owner has made the treaty statement required by section 4.03(B) of this Agreement, if applicable.

(B) Treaty Statement. The treaty statement required by this section 4.03(B) is as follows: [Name of Direct Beneficiary or Owner] meets all provisions of the treaty that are necessary to claim a reduced rate of withholding, including any applicable limitation on benefits provisions, and derives the income within the meaning of section 894, and the regulations thereunder, as the beneficial owner.

WT is required to obtain the treaty statement described in this section 4.03(B) from a beneficiary or owner that is an entity. WT shall not be required to obtain a treaty statement described in this section 4.03(B) from an individual who is a resident of an applicable treaty country or from the government, or its political subdivisions, of a treaty country.

Sec. 4.04. Documentation for International Organizations. WT may not treat a beneficiary or owner as an international organization entitled to an exemption from withholding under section 892 unless WT has determined that no chapter 4 withholding is required and it obtains a Form W–8EXP (or documentary evidence as permitted under section 4.01(B) of this Agreement) from the international organization. The name provided on the documentation must be the name of an entity designated as an international organization by executive order pursuant to 22 United States Code 288 through 288(f). If an international organization is not claiming benefits under section 892 but under another Code exception, the provisions of section 4.02 of this Agreement apply rather than the provisions of this section 4.04.

Sec. 4.05. Documentation for Foreign Governments and Foreign Central Banks of Issue.

(A) Documentation for a Foreign Government or Foreign Central Bank of Issue Claiming an Exemption from Withholding Under Section 892 or Section 895. WT may not treat a beneficiary or owner as a foreign government or foreign central bank of issue exempt from withholding under section 892 or 895 unless WT has determined that no chapter 4 withholding is required and—

(1) WT receives from the beneficiary or owner a Form W–8EXP (or documentary evidence as permitted under section 4.01(B) of this Agreement) establishing that the beneficiary or owner is a foreign government or foreign central bank of issue;

(2) The income distributed to, or included in the distributive share of, the beneficiary or owner is the type of income that qualifies for an exemption from withholding under section 892 or 895; and

(3) WT does not know, or have reason to know, that the beneficiary or owner is a controlled commercial entity as described in section 892, that the income owned by the foreign government or foreign central bank of issue is being received from a controlled commercial entity, or that the income is from the disposition of an interest in a controlled commercial entity.

(B) Treaty Exemption. WT may not treat a beneficiary or owner as a foreign government or foreign central bank of issue entitled to a reduced rate of withholding under an income tax treaty for purposes of chapter 3 unless WT has determined that no chapter 4 withholding is required and it has valid documentation that is sufficient to obtain a reduced rate of withholding under a treaty, as described in section 4.03 of this Agreement.

(C) Other Code Exception. If a foreign government or foreign central bank of issue is not claiming benefits under section 892 or a reduced rate under an income tax treaty but under another Code exception (e.g., the portfolio interest exception under section 871(h) or 881(c)), the provisions of section 4.02 of this Agreement apply rather than the provisions of this section 4.05.

Sec. 4.06. Documentation for Foreign Tax-Exempt Organizations. To the extent that WT determines that an amount distributed to, or included in the distributive share of, a beneficiary or owner is not subject to withholding under chapter 4, WT may not treat the beneficiary or owner as a foreign tax-exempt organization and reduce the rate of withholding or exempt the beneficiary or owner from withholding for purposes of chapter 3 unless WT satisfies the requirements provided in section 4.06(A), (B), or (C) of this Agreement.

(A) Reduced Rate of Withholding Under Section 501. WT may not treat a beneficiary or owner as a foreign organization described under section 501(c), and therefore exempt from withholding under chapter 3 (or, if the beneficiary or owner is a foreign private foundation, subject to withholding at a 4-percent rate under section 1443(b)) unless WT obtains a valid Form W–8EXP with Part IV of the form completed.

(B) Treaty Exemption. WT may not treat a beneficiary or owner as a foreign organization that is tax-exempt on an item of income pursuant to a treaty unless WT obtains valid documentation as described under section 4.03 of this Agreement that is sufficient for obtaining a reduced rate of withholding under the treaty and the documentation establishes that the beneficiary or owner is an organization exempt from tax under the treaty on that item of income.

(C) Other Exceptions. If a tax-exempt entity is not claiming a reduced rate of withholding because it is a foreign organization described under section 501(c) or under a treaty article that applies to exempt certain foreign organizations from tax, but is claiming a reduced rate of withholding under another Code or treaty exception, the provisions of section 4.02 or 4.03 of this Agreement (as applicable) shall apply rather than the provisions of this section 4.06.

Sec. 4.07. Documentation from Passthrough Beneficiaries or Owners. Except as otherwise provided in section 9 of this Agreement, WT shall not act as a withholding foreign trust with respect to an amount distributed to, or included in the distributive share of, a passthrough beneficiary or owner. WT must forward the passthrough beneficiary’s or owner’s documentation (and associated withholding statement and documentation of indirect beneficiaries or owners) to the withholding agent from whom WT receives a reportable amount.

Sec. 4.08. Documentation for U.S. Exempt Recipients. WT shall not treat a beneficiary or owner as a U.S. exempt recipient unless WT obtains from the beneficiary or owner—

(A) A valid Form W–9 on which the beneficiary or owner includes an exempt payee code to certify that the beneficiary or owner is a U.S. exempt recipient;

(B) Documentary evidence, as permitted under section 4.01(B) of this Agreement, that is sufficient to establish that the beneficiary or owner is a U.S. exempt recipient; or

(C) Documentary evidence, as permitted under section 4.01(B) of this Agreement, that is sufficient to establish the beneficiary’s or owner’s status as a U.S. person and WT can treat the beneficiary or owner as an exempt recipient under the rules of § 1.6045–2(b)(2)(i) or § 1.6049–4(c)(1)(ii), as appropriate, without obtaining documentation.

Sec. 4.09. Documentation for U.S. Non-Exempt Recipients. WT shall not treat a beneficiary or owner as a U.S. non-exempt recipient unless WT obtains a valid Form W–9 from the beneficiary or owner.

(A) In General. WT may not rely on documentation if WT has actual knowledge or reason to know that documentation provided by a beneficiary or owner is unreliable or incorrect, including when there is a change in circumstances with respect to the information or statements contained in the documentation or in WT’s files pertaining to the obligation (account information) that affects the reliability of the beneficiary or owner’s claim. See § 1.1441–1(e)(4)(ii)(D) for the definition of change in circumstances. Once WT knows, or has reason to know, that documentation provided by a beneficiary or owner is unreliable or incorrect, it can no longer reliably associate a payment with valid documentation unless it obtains additional documentation to establish the beneficiary’s or owner’s chapter 3 status. If WT can no longer reliably associate a payment with valid documentation, it must obtain new documentation prior to the time withholding is required under section 3 of this Agreement.

(A) Documentation Other Than a Form W–9. WT, as permitted under section 4.01(B) of this Agreement, may rely on valid documentary evidence obtained from direct beneficiaries or owners in accordance with applicable know-your-customer rules as long as the documentary evidence remains valid under those rules or until WT knows, or has reason to know, that the information contained in the documentary evidence is unreliable or incorrect. WT may rely on the representations described in section 4.03 of this Agreement obtained in connection with such documentation for the same period of time as the documentation. For establishing a beneficiary’s or owner’s chapter 3 status (as defined in § 1.1441–1(c)(45)) or foreign status for chapter 61 purposes, WT may rely on a valid Form W–8 until its validity expires under § 1.1441–1(e)(4)(ii) and may rely on documentary evidence (other than documentary evidence obtained pursuant to applicable know-your-customer rules) until its validity expires under § 1.6049–5(c).

(B) Form W–9. WT may rely on a Form W–9 unless one of the conditions of § 31.3406(h)–3(e)(2)(i) through (v) applies or if it has been informed by the IRS or another withholding agent that the form is unreliable or incorrect.

(A) Maintaining Documentation. WT shall maintain documentation by retaining the original documentation, a certified copy, a photocopy, a scanned copy, a microfiche, or other means that allow reproduction (provided that WT has recorded receipt of the documentation and is able to produce a hard copy). If WT is not required to retain copies of documentary evidence under its know-your-customer rules, WT may instead retain a notation of the type of documentation reviewed, the date the documentation was reviewed, the document’s identification number, if any (e.g., a passport number), and whether such documentation contained any U.S. indicia. For obligations held by a direct beneficiary or owner opened prior to January 1, 2001, if WT was not required under its know-your-customer rules to maintain originals or copies of documentation, WT may nevertheless rely on the information if it has complied with all other aspects of its know-your-customer rules regarding establishment of a beneficiary’s or owner’s identity, it has a record that the documentation required under the know-your-customer rules was actually examined by an employee of WT or employees of the trustee of WT in accordance with the know-your-customer rules, and it has no information in its possession that would require WT to treat the documentation as invalid under the rules of section 4.10(B) of this Agreement.

(B) Retention Period. WT shall retain a beneficiary’s or owner’s documentation obtained under this section 4 for as long as the document is relevant for the determination of WT’s tax liability or reporting responsibilities under chapters 3, 4, and 61, and sections 3406 and 6048.

WT agrees to furnish a withholding foreign trust withholding certificate to each withholding agent from which it receives a reportable amount as a withholding foreign trust. The withholding foreign trust withholding certificate is a Form W–8IMY (or acceptable substitute form) that certifies that WT is acting as a withholding foreign trust, contains WT’s WT–EIN, and provides all other information and certifications required by the form, including its WT–EIN. If WT is receiving a reportable amount that is a withholdable payment, the withholding certificate must also contain WT’s chapter 4 status to the extent required, provide its GIIN (if applicable), and provide the other information and certifications required on the form. If WT is an FFI, WT must provide a GIIN on its withholding foreign trust withholding certificate irrespective of the time the FFI is permitted under its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI to obtain a GIIN. WT is not required to disclose, as part of that Form W–8IMY or its withholding statement, any information regarding the identity of its direct beneficiaries or owners and those indirect beneficiaries or owners for which it acts as a withholding foreign trust to the extent permitted under section 9 of this Agreement.

If WT does not act as a withholding foreign trust for an indirect beneficiary or owner, WT is required to furnish a nonwithholding foreign trust certificate to its withholding agent. See § 1.1441–5(e)(5)(iii) for the requirements of a nonwithholding foreign trust withholding certificate, the withholding statement associated with the withholding certificate, and the other documentation or other information for each passthrough beneficiary or owner and its direct and indirect beneficiaries or owners.

Sec. 5.02. Withholding Statement. When WT is acting as a withholding foreign trust, WT must assume primary chapters 3 and 4 withholding responsibility as required by section 3.02 of this Agreement for reportable amounts that are distributed to, or included in the distributive shares of, its direct beneficiaries or owners and any indirect beneficiaries or owners for which it is acting as a withholding foreign trust. Accordingly, WT is not required to provide a withholding statement in such circumstances. See section 9 of this Agreement providing that WT may not act as a withholding foreign trust for certain indirect beneficiaries or owners that are U.S. non-exempt recipients.

(A) In General. WT shall file a return on Form 1042, whether or not WT withheld any amounts under chapter 3 or 4 of the Code, on or before March 15 of the year following any calendar year in which WT acts as a withholding foreign trust. In addition to the information required on Form 1042 and its accompanying instructions, WT shall attach a statement setting forth the amounts of any overwithholding or underwithholding adjustments made under sections 7.01 and 7.03 of this Agreement, and an explanation of the circumstances that resulted in the over–or underwithholding. If WT is requesting a collective refund or credit, WT shall attach the statements required by section 7.02 of this Agreement and shall comply with the procedures specified in section 7.02 of this Agreement.

(B) Extensions for Filing Returns. WT may request an extension of the time for filing Form 1042, or any of the information required to be attached to the form, by submitting Form 7004, Application for Automatic Extension of Time to File Certain Business Income, Tax, Information, and Other Returns, on or before the due date of the return.

(A) In General. WT must file Form 1042–S for each beneficiary or owner for whom it acts as a withholding foreign trust and for whom WT distributes, or in whose distributive share is included, a reportable amount unless WT is permitted under sections 6.02(C) and (D) of this Agreement to report in pools (reporting pools). With respect to its direct beneficiaries or owners, WT must file Forms 1042–S in the manner required by the regulations under chapters 3 and 4 for amounts distributed to, or included in the distributive share of, its beneficiaries or owners (or in the case of a participating FFI, pursuant to its FATCA requirements as a participating FFI) and the instructions to the form, including any requirement to file the forms magnetically or electronically. Any Form 1042–S required to be filed by this section 6 shall be filed on or before March 15 following the calendar year in which withholding, if any, was required under section 3.02 of this Agreement. WT may request an extension of time to file Forms 1042–S by submitting Form 8809, Application for Extension of Time to File Information Returns (or other superseding form) by the due date of Forms 1042–S in the manner required by Form 8809.

(B) Recipient Specific Reporting. WT is required to file a separate Form 1042–S for amounts distributed to, or included in the distributive share of, each separate beneficiary or owner as described in this section 6.02(B). WT must file separate Forms 1042–S by income code, chapter 3 or 4 exemption code, recipient code, chapter 4 withholding rate pool (if applicable), and withholding rate.

(1) Unless WT has made the pooled reporting election pursuant to section 6.02(D) of this Agreement, WT must file a separate Form 1042–S for each direct beneficiary or owner (other than a passthrough beneficiary or owner) to whom WT distributes, or whose distributive share includes, an amount subject to chapter 3 withholding that is either not a withholdable payment or is a withholdable payment for which no chapter 4 withholding is required.

(2) WT must file a separate Form 1042–S for each beneficiary or owner that is a qualified intermediary, a withholding foreign partnership, or a withholding foreign trust to whom WT distributes, or whose distributive share includes, an amount subject to withholding under chapters 3 or 4, regardless of whether such beneficiary or owner is a direct or indirect beneficiary or owner of WT.

(3) WT must file a separate Form 1042–S for each passthrough beneficiary or owner that is a nonqualified intermediary or flow-through entity that is a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI and to whom WT distributes, or whose distributive share includes, an amount subject to chapter 4 withholding allocable to such FFI’s chapter 4 withholding rate pools of recalcitrant account holders, nonparticipating FFIs, and reportable amounts allocable to U.S. payees, if applicable, regardless of whether such FFI is a direct or indirect beneficiary or owner of WT when WT applies section 9.03 of this Agreement.

(4) WT must file a separate Form 1042–S for each passthrough beneficiary or owner that is a nonqualified intermediary or flow-through entity that is not described in section 6.02(B)(3) of this Agreement (other than a nonparticipating FFI), and to whom WT distributes, or whose distributive share includes, an amount subject to chapter 4 withholding allocable to such passthrough beneficiary’s or owner’s chapter 4 withholding rate pool of payees that are nonparticipating FFIs, regardless of whether such passthrough beneficiary or owner is a direct or indirect beneficiary or owner of WT when WT applies section 9.03 of this Agreement.

(5) WT must file a separate Form 1042–S for each beneficiary or owner of WT that is a partnership or trust to which WT applies the agency option under section 9.02 of this Agreement and to whom WT distributes, or whose distributive share includes, an amount subject to chapter 4 withholding that is allocable to the partnership or trust’s chapter 4 withholding rate pool of payees that are nonparticipating FFIs or to whom WT distributes, or whose distributive share includes, an amount subject to chapter 3 withholding that is either not a withholdable payment or is a withholdable payment for which no chapter 4 withholding is required and that is allocable to such partnership’s or trust’s chapter 3 withholding rate pools.

(6) WT must file a separate Form 1042–S for each beneficiary or owner of WT that is a partnership or trust to which WT applies the joint account option under section 9.02 of this Agreement and to whom WT distributes, or whose distributive share includes, an amount subject to chapter 3 withholding that is allocable to such partnership or trust’s chapter 3 withholding rate pool.

(7) WT must file a separate Form 1042–S for each foreign account holder (or interest holder) of a passthrough beneficiary or owner that is a nonparticipating FFI that receives a payment on behalf of an exempt beneficial owner (regardless of whether the passthrough beneficiary or owner is a direct or indirect beneficiary or owner of WT) to the extent WT can reliably associate such amounts with valid documentation from such passthrough beneficiary or owner as to the portion of the payment allocable to one or more exempt beneficial owners. In addition, WT must file separate Forms 1042–S in the same manner for each foreign account holder (or interest holder) of a passthrough beneficiary or owner that is described in the preceding sentence and that is a direct or indirect partner, beneficiary, or owner of a partnership or trust to which WT applies the agency option.

(8) WT must file a separate Form 1042–S for each foreign account holder (or interest holder) of a nonqualified intermediary or flow-through entity to whom WT distributes, or whose distributive share includes, an amount subject to chapter 3 withholding that is either not a withholdable payment or is a withholdable payment for which no chapter 4 withholding is required to the extent WT can reliably associate such amounts with valid documentation from an account holder (or interest holder) that is not itself a nonqualified intermediary or flow-through entity when WT applies section 9.03 of this Agreement. In addition, WT must file a separate Form 1042–S in the same manner for each foreign account holder (or interest holder) of a nonqualified intermediary or flow-through entity (to which WP does not apply the agency option) that is described in the preceding sentence and that is a direct or indirect account holder (or interest holder) of a partnership or trust to which WT applies the agency option.

(9) If WT is an NFFE, WT must file a separate Form 1042–S for each direct beneficiary or owner that establishes its status as a passive NFFE but fails to provide the information regarding its owners as required under § 1.1471–3(d)(12)(iii).

If WT is required to file Form 3520–A and an Owner Statement or Beneficiary Statement under section 6048 of the Code, then WT shall file Form 3520–A and file and furnish any required Owner Statements or Beneficiary Statements to U.S. beneficiaries or owners in accordance with the instructions for the form. See section 6.05(D) for a special reporting obligation of WT with respect to beneficiaries not required to be reported by WT on Form 3520–A.

Sec. 6.04. Retention of Returns. WT shall retain Forms 1042 for the period of the applicable statute of limitations on assessments and collection under the Code.

(A) WT that is an FFI. If WT is an FFI, WT is required to report each U.S. account (or, in the case of an FFI that is a reporting Model 1 FFI or registered deemed-compliant Model 1 IGA FFI, each U.S. reportable account) that it maintains consistent with its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI. See WT’s requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI to report each account that is a U.S. account (or U.S. reportable account) that it maintains. If WT is a participating FFI or registered deemed-compliant FFI (other than a reporting Model 1 FFI or registered deemed-compliant Model 1 IGA FFI), WT must report its U.S. accounts on Form 8966, FATCA Report, in the time and manner specified under its FATCA requirements as a participating FFI or registered deemed-compliant FFI except to the extent WT is reporting under § 1.1471–4(d)(5) on Form 1099 with respect to its U.S. accounts. If WT is a reporting Model 1 FFI or registered deemed-compliant Model 1 IGA FFI, WT must report each U.S. reportable account on Form 8966 as required under the applicable Model 1 IGA.

(B) WT that is an NFFE. If WT is an NFFE, WT shall file Forms 8966 to report withholdable payments distributed to, or included in the distributive share of, any beneficiary or owner that is an NFFE (other than an excepted NFFE) with one or more substantial U.S. owners if the NFFE is the beneficial owner of the withholdable payment received by WT. See § 1.1471–1(b)(8) for the definition of beneficial owner. WT must report on Form 8966 in accordance with the form and its accompanying instructions.

The Form 8966 must include the name of the NFFE that is owned by a substantial U.S. owner; the name, address, and U.S. TIN of each substantial U.S. owner; the total of all withholdable payments distributed to, or included in the distributive share of, the NFFE during the calendar year; and any other information as required by the form and its accompanying instructions.

(C) Form 8966 Reporting for Payees that are NFFEs. WT shall file Form 8966 to report withholdable payments that WT distributes to, or includes in the distributive share of, a passthrough beneficiary or owner that provides information regarding an account holder (or interest holder that is an NFFE (other than an excepted NFFE) with one or more substantial U.S. owners (or one or more controlling persons that is a specified U.S. person under an applicable IGA) and that is the beneficial owner of the withholdable payment received by WT. WT must report on Form 8966 in the time and manner provided in § 1.1474–1(i)(2). Such report must include the name of the NFFE that is owned by a substantial U.S. owner (or controlling person that is a specified U.S. person); the name, address, and U.S. TIN of each substantial U.S. owner (or controlling person that is a specified U.S. person); the total of all withholdable payments made to the NFFE during the calendar year (or reportable period under the applicable IGA); and any other information as required by the form and its accompanying instructions. WT is only required to report as described in this section 6.05(C) if WT acts as a withholding foreign trust with respect to such indirect beneficiary or owner as described in section 9.03 of this Agreement and the passthrough beneficiary or owner does not certify on its withholding statement that it is reporting the account holder (or interest holder) as a U.S. account pursuant to its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI.

(D) Special Reporting Obligation. If WT is not a participating FFI or a registered deemed-compliant FFI or a registered deemed-compliant Model 1 IGA FFI and is not required to report with respect to a U.S. beneficiary of WT on Form 3520–A, then WT must report with respect to such beneficiary on Form 8966 as required under this section 6.05(D). A beneficiary for this purpose means a beneficiary that receives a distribution from WT during the year or that is required to include an amount in gross income under sections 652(a) or 662(a) with respect to WT.

(1) WT may use the collective refund procedures under this section 7.02 only if WT has not issued Forms 1042–S to the beneficiaries or owners that were subject to overwithholding and for which a collective refund claim is being made.

(2) WT must submit together with its amended Form 1042 on which it provides a reconciliation of amounts withheld and a claim for credit or refund, a statement that includes the following information and representations—

(i) The reason(s) for the overwithholding;

(ii) WT deposited the tax for which a refund is being sought under section 6302 and WT has not applied the reimbursement or set-off procedures of §§ 1.1461–2 and 1.1474–2 to adjust the tax withheld to which the claim relates;

(iii) WT has repaid or will repay the amount for which a refund is sought to the appropriate beneficiaries or owners;

(iv) WT retains a record showing the total amount of tax withheld, adjustments for underwithholding, and reimbursements for overwithholding as it relates to each beneficiary or owner and also showing the repayment (if applicable) to such beneficiaries or owners for the amount of tax for which a refund is being sought;

(v) WT retains valid documentation that meets the requirements of chapter 3 or 4 (as applicable) to substantiate the amount of overwithholding with respect to each beneficiary or owner for which a refund is being sought; and

(vi) WT has not (and will not) issue a Form 1042–S (or such other form as the IRS may prescribe) to any beneficiary or owner with respect to the payments for which a refund is being sought.

Sec. 7.03. Adjustments for Chapter 3 or 4 Underwithholding. If WT knows that an amount should have been withheld under chapter 3 or 4 from a previous payment made to a beneficiary or owner and the amount was not withheld, WT may either withhold from future payments made pursuant to chapter 3 or chapter 4 to the same beneficiary or owner or satisfy the tax from the beneficiary’s or owner’s proportionate share of assets over which WT has control. The additional withholding or satisfaction of the tax owed described in the previous sentence must be made before the due date of the Form 1042 (not including extensions) for the calendar year in which the underwithholding occurred.

Sec. 7.04. Chapter 3 or 4 Underwithholding after Form 1042 Filed. If, after a Form 1042 has been filed for a calendar year, WT, WT’s auditor, or the IRS determines that WT has underwithheld tax under chapter 3 or 4 for such year, WT shall file an amended Form 1042 to report and pay the underwithheld tax. WT shall pay the underwithheld tax, the interest due on the underwithheld tax, and any applicable penalties, at the time of filing the amended Form 1042. If WT fails to file an amended return, the IRS shall make such return under section 6020 and assess such tax under the procedures set forth in the Code.

(A) In General. WT must adopt a compliance program under the authority of a responsible officer. WT’s compliance program must include policies, procedures, and processes sufficient for WT to satisfy the documentation, reporting, and withholding requirements of this Agreement and sufficient for the responsible officer of WT to make the certifications required under section 8.03 of this Agreement. See section 2.63 of this Agreement for the definition of responsible officer. WT must also perform or arrange for the performance of the periodic review described in section 8.04 of this Agreement. As part of the responsible officer’s certification, WT must provide to the IRS the factual information described in section 8.03(C) of this Agreement. WT must also satisfy the requirements of section 8.06 of this Agreement with respect to the report of the periodic review and must comply with the IRS review referenced in section 8.07 of this Agreement.

(B) Coordination with FATCA Requirements as a Participating FFI, Registered Deemed-Compliant FFI, or Registered Deemed-Compliant Model 1 IGA FFI. As a condition for maintaining this Agreement, WT must comply with the FATCA requirements applicable to its chapter 4 status (including any applicable compliance procedures). Therefore, WT must, as part of the compliance procedures described in this section 8 (including the periodic review described in section 8.04 of this Agreement and in making the periodic certification described in section 8.03 of this Agreement) determine whether it is compliant with its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI when it acts as a withholding foreign trust. See the compliance procedures, if any, required under WT’s FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI when WT acts as a nonwithholding foreign trust. If WT is a participating FFI, WT will be able to make the certification described in section 8.03 of this Agreement, and the certification described in the FFI agreement, to the extent provided in future published guidance or other instructions.

(A) Responsible Officer. WT must appoint an individual as the responsible officer (as defined in section 2.63 of this Agreement). The responsible officer must be identified on the IRS FATCA registration website as the WT’s responsible party and as the responsible officer for purposes of compliance with its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI. The responsible officer (or the responsible officer’s designee) must establish a compliance program that meets the requirements of this section 8.02 and must make the periodic certifications to the IRS described in section 8.03 of this Agreement. The responsible officer of WT must be the trustee of WT or an agent of the trustee of WT with sufficient authority to fulfill the duties of a responsible officer described in this section 8.02. The responsible officer (or a delegate appointed by the responsible officer) must also serve as the point of contact for the IRS for all issues related to this Agreement and for complying with IRS requests for information or additional audit procedures under section 8.07 of this Agreement.

(B) Compliance Program. The responsible officer (or the responsible officer’s designee) must establish a program for WT to comply with the requirements of this Agreement that includes the following:

(1) Written Policies and Procedures. The responsible officer (or the responsible officer’s designee) must ensure the drafting and updating, as necessary, of written policies and procedures sufficient for WT to satisfy the documentation, withholding, reporting, and other obligations of this Agreement with its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI. Such written policies and procedures must include a process for an employee of the trustee or an agent of the trustee of WT to raise issues to the responsible officer (or the responsible officer’s designee) that concern WT’s compliance with this Agreement.

(2) Training. The responsible officer (or the responsible officer’s designee) must communicate such policies and procedures to persons responsible for obtaining, reviewing, and retaining a record of documentation under the requirements of section 4 of this Agreement, making distributions and allocations to beneficiaries or owners on behalf of WT that are subject to withholding under section 3 of this Agreement, or reporting distributions or allocations to beneficiaries or owners under section 6 of this Agreement. This includes any person that is responsible for the performance of WT’s due diligence procedures under its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI.

(3) Systems. The responsible officer (or the responsible officer’s designee) must ensure that systems and processes are in place that will allow WT to fulfill its obligations under this Agreement and its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI. For example, in order to fulfill WT’s obligations to report on Forms 1042–S, 3520–A and 8966 under section 6 of this Agreement, WT must establish systems for documenting beneficiaries or owners and for recording the information with respect to each such beneficiary or owner that WT is required to report under that section.

(4) Monitoring of Business Changes. The responsible officer (or the responsible officer’s designee) must monitor business practices and arrangements that affect WT’s compliance with this Agreement, including, for example, changes in WT’s beneficiaries or owners that give rise to documentation, withholding, or reporting obligations under this Agreement, and its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI.

(5) Periodic Review. The responsible officer (or the responsible officer’s designee) must designate an auditor that meets the qualifications described in section 8.04(A) of this Agreement to perform the periodic review described in section 8.05 of this Agreement.

(6) Periodic Certification. The responsible officer (or the responsible officer’s designee) must make the periodic certification as described in section 8.03 of this Agreement, including ensuring that corrective actions are taken in response to any material failures (as defined in section 8.03(D) of this Agreement) of WT’s compliance with this Agreement (as defined in section 8.03(D) of this Agreement) and its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI.

Sec. 8.03. Periodic Certification by Responsible Officer. In accordance with the compliance period described in section 8.03(E) of this Agreement, the responsible officer of WT must make the applicable certification of compliance described in section 8.03(A) or (B) of this Agreement. The responsible officer of WT must make the certifications of compliance in such manner as the IRS may prescribe in future guidance or other instructions. The responsible officer must consider the results of WT’s periodic review described in section 8.05 of this Agreement in making the periodic certification.

(A) Certification of Effective Internal Controls. The responsible officer must certify to the following and disclose any material failures that occurred during the certification period or during any prior period if the material failure was not disclosed as part of a prior certification or written disclosure made by WT to the IRS—

(1) WT has established a compliance program that meets the requirements described in section 8.02(B) of the WT agreement that is in effect as of the date of the certification and during the certification period;

(2) A periodic review was conducted for the certification period in accordance with sections 8.04 through 8.06 of the WT agreement, and based on the review and other steps taken by WT, WT maintains effective internal controls over its documentation, withholding, and reporting obligations under the WT agreement and under its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI;

(3) Based on the periodic review and other information known to the responsible officer, there are no material failures as defined in section 8.03(D) of the WT agreement or, if there are any material failures, such failures are identified as part of this certification as well as the actions taken to remediate such failures and to prevent their reoccurrence by the date of this certification;

(4) With respect to any failure to withhold, deposit, or report to the extent required under the WT agreement, WT has corrected such failure by paying any taxes due (including interest and penalties) and filing the appropriate return (or amended return); and

(5) All partnerships and trusts to which WT applies the agency option either have provided documentation or other information to WT to include in WT’s periodic review, or have provided the responsible officer of WT with a certification of effective controls meeting the requirements of section 8.03(A) of the WT agreement and have represented to WT that there are no material failures as defined in section 8.03(D) of the WT agreement, or have disclosed any such failures to WT and the actions taken by the partnership or trust to remediate such failures.

(B) Qualified Certification. If the responsible officer has identified an event of default or a material failure that WT has not corrected as of the date of the certification, the responsible officer must certify to the following statements—

(1) The responsible officer (or the responsible officer’s designee) has identified an event of default as defined in section 8.05 of the WT agreement or has determined that as of the date of the certification, there are one or more material failures as defined in section 8.03(D) of this Agreement with respect to WT’s compliance, or the compliance of a partnership or trust to which WT applies the agency option, and that appropriate actions will be taken to prevent such failures from recurring;

(2) With respect to any failure to withhold, deposit, or report to the extent required under the WT agreement, WT will correct such failure by paying any taxes due (including interest and penalties) and filing the appropriate return (or amended return); and

(3) The responsible officer (or an officer of the partnership or trust to which WT applies the agency option) will respond to any notice of default (if applicable) or will provide to the IRS, to the extent requested, a description of each material failure and a written plan to correct each such failure.

(C) Factual Information. At the same time WT provides the periodic certification, WT shall also report certain factual information regarding its beneficiaries or owners, withholdable payments, and amounts subject to chapter 3 withholding and must certify to the accuracy of the information. The information requested will be limited to certain information reviewed as part of WT’s periodic review procedure described in section 8.05 of this Agreement. The IRS will consider reportable amounts received by WT, the number of WT’s beneficiaries or owners, and whether WT was required to file Forms 3520–A with respect to its beneficiaries and owners that are U.S. owners and Forms 8966 with respect to its beneficiaries and owners that hold U.S. accounts (or U.S. reportable accounts) during the certification period to determine the extent of the factual information to request. The IRS will prescribe in future published guidance or other instructions the factual information that the WT is required to report with the periodic certification and the manner in which such information must be reported.

(D) Material Failures.

(1) Material Failures Defined. A material failure is generally a failure of WT to fulfill the requirements of this Agreement or its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI. For purposes of the certifications described in sections 8.03(A) and (B) of this Agreement, a material failure is limited to the following:

(i) WT’s establishing of, for financial statement purposes, a tax reserve or provision for a potential future tax liability related to WT’s failure to comply with this Agreement or the FFI agreement or its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI;

(ii) WT’s failure to establish written policies, procedures, or systems sufficient for the relevant personnel of WT to take actions consistent with WT’s obligations under this Agreement or its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI;

(iii) A criminal or civil penalty or sanction imposed on WT by a regulator or other governmental authority or agency with oversight over WT’s compliance with the AML/KYC procedures, if applicable, to which WT is subject and that is imposed due to WT’s failure to properly identify beneficiaries or owners under the requirements of those procedures; or

(iv) A finding (including a finding noted in the auditor’s periodic review report described in section 8.06 of this Agreement) that, for one or more years covered by this Agreement, WT failed to—

(a) Withhold an amount that WT was required to withhold under chapter 3 or 4 as required under section 3 of this Agreement;

(b) Make deposits in the time and manner required by section 3 of this Agreement or make adequate deposits to satisfy its withholding obligations, taking into account the procedures under section 7 of this Agreement;

(c) Report or report accurately on Forms 1042, 1042–S, 8966, 3520–A and the Owner Statements and Beneficiary Statements that are part of Form 3520–A as required under section 6 of this Agreement; or

(d) Report or report accurately its U.S. accounts (or U.S. reportable accounts) under its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI.

(2) Limitations on Material Failures. A failure described in section 8.03(D)(1)(iv) of this Agreement is a material failure only if the failure was the result of a deliberate action on the part of WT’s trustee or one or more employees or agents of WT’s trustee to avoid the requirements of this Agreement or WT’s FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI with respect to one or more beneficiaries or owners of WT or was an error attributable to a failure of WT to establish or implement internal controls sufficient for WT to meet the requirements of this Agreement. Regardless of these limitations for the certifications described in sections 8.03(A) and (B) of this Agreement, WT is required to correct a failure to withhold or deposit tax under section 3 of this Agreement or to report under section 6 of this Agreement by depositing the amount of tax required to have been withheld and by filing the appropriate return (or amended return).

(A) Independent Auditor. The periodic review may be performed by an internal auditor that is an employee or agent of the trustee of WT (internal auditor) or a certified public accountant, attorney, or third-party consultant (external auditor), or any combination thereof.

(1) Internal Auditor. WT may designate an internal auditor to perform the periodic review (or a portion of the periodic review) only when the internal auditor is competent with respect to the requirements of this Agreement and WT’s FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI. The internal auditor must also be able to report findings that reflect the independent judgment of the auditor. The internal auditor must not report directly to the responsible officer or any other employee or agent of WT’s trustee with direct authority over the persons performing functions in connection with WT’s obligations under this Agreement and WT’s FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI. The IRS has the right to request the performance of the periodic review by an external auditor if the IRS, in its sole discretion, reasonably believes that the auditor selected by WT was not independent or did not perform an effective periodic review under this Agreement.

(2) External Auditor. WT may engage an external auditor that is a certified public accountant, attorney, or third-party consultant that is regularly engaged in the practice of performing reviews of clients’ policies, procedures, and processes for complying with accounting, tax, or regulatory requirements (including for assisting clients in determining such compliance). The external auditor must be independent of WT under the standards applicable to a certified public accountant with respect to the engagement or, in the case of an auditor other than a certified public accountant, any standard of independence otherwise applicable to the auditor for such an engagement. The external auditor is not required to make an attestation or render an opinion regarding WT’s compliance with this Agreement or WT’s compliance with its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI, but the auditor must be able to perform the periodic review as specified in section 8.05 of this Agreement and provide the report described in section 8.06 of this Agreement. WT must permit the external auditor access to all relevant records of WT for purposes of performing the audit, including information regarding specific beneficiaries or owners. Additionally, the engagement between the external auditor and WT must impose no restrictions on WT’s ability to provide the report described in section 8.06 of this Agreement to the IRS. However, the external auditor is not required to divulge the identity of WT’s foreign beneficiaries or owners to the IRS. WT must permit the IRS to communicate directly with the external auditor and any legal prohibitions that prevent the IRS from communicating directly with the auditor must be waived.

Sec. 8.05. Scope and Timing of Review. The responsible officer of WT must require the auditor to perform a review of WT’s internal controls, test a sample of distributions and allocations related to WT’s documentation, withholding, reporting, and other obligations under this Agreement and its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI, and identify deficiencies in meeting these obligations. To the extent WT applies the joint account option with respect to another partnership or trust as described in section 9.01 of this Agreement or acts as a withholding foreign trust for any indirect beneficiaries or owners as described in section 9.03 of this Agreement, the review must include such indirect partners, beneficiaries, or owners in addition to WT’s direct beneficiaries or owners. In addition, if WT applies the agency option to a partnership or trust as described in section 9.02 of this Agreement, the review must include the partners, beneficiaries, or owners of such partnership or trust unless the partnership or trust conducts its own review in accordance with this section 8 of this Agreement and provides the required certification to the responsible officer of WT. Unless otherwise approved by the IRS, the review must include the steps described in sections 8.05(A) through (E) of this Agreement. The review may include recommendations for either corrective actions or enhancements to WT’s compliance program. WT is required to arrange for the performance of one review for the certification period to evaluate WT’s documentation, withholding, and reporting practices for the most recent calendar year. The review is not required to include statistical sampling procedures for testing transactions, but must require that the auditor document its methodology for sampling determinations.

(A) Documentation. The auditor must—

(1) Verify that WT has training materials, manuals, and directives that instruct the appropriate persons how to request, collect, review, and maintain documentation in accordance with this Agreement, including procedures for identifying and communicating changes in circumstances;

(2) Review WT’s procedures and interview the appropriate persons to determine if appropriate documentation is requested from beneficiaries or owners, and, if obtained, that it is reviewed and maintained in accordance with this Agreement;

(3) Verify that WT follows procedures designed to inform beneficiaries or owners that claim a reduced rate of withholding under an income tax treaty about any applicable limitation on benefits provisions;

(4) Review WT’s documentation obtained for WT’s beneficiaries or owners to ensure that WT obtained the treaty statements required by section 4.03(B) of this Agreement;

(5) Review information contained in documentation obtained for WT’s beneficiaries or owners or memoranda and any correspondence associated with the beneficiaries or owners (the beneficiaries’ or owners’ files) to ensure that WT obtained documentation that meets the general requirements described in section 4 of this Agreement;

(6) Review information contained in the beneficiaries’ or owners’ files to determine if the documentation validity standards of section 4.10 of this Agreement have been met. For example, the auditor must verify that WT is withholding at the correct rate after any change in circumstances (e.g., a change of address to a U.S. address or change of account holder status from foreign to U.S.);

(7) Review WT’s beneficiaries’ or owners’ files to ensure that WT is obtaining, reviewing, and maintaining documentation in accordance with its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI; and

(8) Review WT’s agreements with partnerships or trusts described in section 9 of this Agreement to ensure that the obligations imposed meet the requirements provided in section 9 of this Agreement, including, for example, the receipt of allocation information.

(B) Withholding Responsibilities. The auditor must—

(1) Perform test checks, using a valid sample of WT’s direct beneficiaries or owners that are recalcitrant account holders (if applicable) and nonparticipating FFIs, to verify that WT is withholding as required under chapter 4;

(2) Perform test checks, using a valid sample of foreign beneficiaries or owners for which no withholding is required under chapter 4 based on the beneficiary’s or owner’s chapter 4 status, to verify that WT withheld the proper amounts; and

(3) Verify that amounts withheld by WT were timely deposited in accordance with section 3.05 of this Agreement.

(C) Return Filing and Information Reporting. The auditor must—

(1) Obtain copies of original and amended Forms 1042, and any schedules, statements, or attachments required to be filed with those forms, and verify that the forms have been filed and determine whether the amounts of income, taxes, and other information reported on those forms are accurate by—

(i) Reviewing work papers used to prepare these forms;

(ii) Interviewing personnel responsible for preparing these forms;

(iii) Reviewing copies of Forms 1042–S received from withholding agents for reconciling amounts received by WT with the amounts distributed to, or included in the distributive share of, WT’s beneficiaries or owners;

(iv) Reviewing account statements and correspondence from withholding agents;

(v) Determining that adjustments to the amount of tax shown on Form 1042 (and any claim by WT for refund or credit) properly reflect the adjustments to withholding made by WT using the reimbursement or set-off procedures under section 7 of this Agreement and that the adjustments are supported by sufficient documentation;

(vi) Reconciling amounts shown on Forms 1042 with amounts shown on Form 1042–S (including the amount of taxes reported as withheld); and

(vii) In the case of collective credits or refunds, reviewing the statements attached to the amended Forms 1042 filed to claim a collective credit or refund, ascertaining their accuracy, and—

(a) Determining the causes of any overwithholding reported and ensure WT did not issue Forms 1042–S to beneficiaries or owners that were included as part of its collective credit or refund claim;

(b) Determining that WT repaid the appropriate beneficiaries or owners and that the amount of the claim is accurate and supported by adequate documentation for reducing the rate of withholding; and

(c) Determining that WT did not include payments made to a beneficiary or owner described in section 7.02 of this Agreement or a partnership or trust described in section 9.01 of this Agreement.

(2) Obtain copies of original and amended Forms 1042–S, 3520–A, and the Owner Statements and Beneficiary Statements filed by WT together with the work papers used to prepare those forms and determine whether the amounts reported on those forms are accurate by—

(i) Reviewing the Forms 1042–S received from withholding agents;

(ii) Reviewing the Form 3520–A, if required, and if no Form 3520–A was required to be filed, determining whether the exemption from filing was properly applied;

(iii) Reviewing a valid sample of Owner Statements and Beneficiary Statements issued by WT to beneficiaries or owners, if any;

(iv) Reconciling any payments and tax reported on Forms 1042–S received from withholding agents with amounts (including characterization of income) and taxes reported by WT as withheld on Forms 1042–S and determining the reason(s) for any variance;

(v) Interviewing personnel responsible for preparing the Forms 1042–S, Owner Statements and Beneficiary Statements issued to beneficiaries or owners and the work papers used to prepare those forms; and

(vi) Determining, in any case in which WT utilized the reimbursement or set-off procedure, that WT satisfied the requirements of section 7 of this Agreement and that the adjusted amounts of tax withheld are properly reflected on Forms 1042–S.

(3) Obtain copies of original and amended Forms 3520–A and 8966, and determine whether the amounts of income and other information reported on Forms 3520–A and 8966 are accurate by—

(i) Reviewing the U.S. beneficiaries and owners of WT (or a valid sample of such) (including beneficiaries holding U.S. accounts (or U.S. reportable accounts)) to determine: (1) that such accounts were reported on Form 3520–A in accordance with WT’s obligations under section 6048; (2) that such accounts were reported on Form 8966 in accordance with WT’s FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI; and (3) that U.S. beneficiaries otherwise required to be reported on Form 8966 under section 6.05(D) of this Agreement are so reported;

(ii) If WT is an NFFE, confirming that any direct beneficiaries or owners that are passive NFFEs with one or more substantial U.S. owners were reported in accordance with § 1.1472–1(c)(3);

(iii) Confirming with respect to any passthrough beneficiary or owner that provides information regarding an account holder (or interest holder) that is an NFFE (other than an excepted NFFE) with one or more substantial U.S. owners (or controlling persons that are specified U.S. persons under an applicable Model 1 or Model 2 IGA) that such substantial U.S. owners (or controlling persons that are specified U.S. persons) were reported to the extent required under section 6.05(C) of this Agreement;

(iv) Reviewing a sample of the documentation provided by a partnership or trust to which WT applied the agency option, confirming that WT reported on Form 8966 to the extent required under section 9 of this Agreement;

(v) Reviewing work papers used to prepare these forms; and

(vi) Interviewing personnel responsible for preparing these forms.

(D) Significant Change in Circumstances. The auditor must verify that in the course of the audit it has not discovered any significant change in circumstances, as described in section 10.05(A), (D), or (E) of this Agreement.

(A) In General. The performance of the periodic review must be documented in a written report addressed to the responsible officer of WT and must be available to the IRS upon request (with a certified translation into English if the report is not in English). The report must describe the scope of the review, the steps performed to evaluate internal controls, and the test transactions, including the methodology for sampling determinations. The report must identify any deficiencies noted by the auditor, especially those deficiencies that the auditor concludes are material failures, and, may include explanatory footnotes to clarify the results of the report. Recommendations may be included but are not required to be provided in the report.

(B) Partnership or Trust to which WT Applies the Agency Option. Any partnership or trust to which WT applies the agency option and that does not provide documentation and information to WT for WT’s periodic review, must provide a written certification to WT as described in section 8.03 of this Agreement regarding its compliance with the requirements of its agreement with WT. Such certification must be available to the IRS upon a request made as part of the review described in section 8.07 of this Agreement (with a certified translation into English if the certification is not in English).

(C) Retention of Report. The report and certifications described in this section 8.06 must be retained by WT for as long as this Agreement is in effect (including renewals of this Agreement).

(A) In General. Based upon the certifications made by the responsible officer and disclosure of material failures, the information reported on Forms 1042, 1042–S, 8966, 3520–A and the Owner Statements and Beneficiary Statements filed with the IRS during the certification period, or otherwise at the IRS’s discretion for compliance purposes, the IRS may initiate requests of WT under this section 8.07.

(B) Periodic Review Report. The IRS may request through written correspondence to the responsible officer of WT a copy of WT’s periodic review report that was issued for any prior certification period or the periodic review report of any partnership or trust to which WT applied the agency option during the current certification period (with a certified translation into English if the report is not in English). WT is required to provide the report within 30 calendar days of such request.

(C) Correspondence Review. The IRS may, in its discretion, conduct additional fact finding through a correspondence review. In such a review, the IRS will contact the responsible officer of WT in writing and request information about WT’s compliance with this Agreement or the compliance of a partnership or trust to which WT applied the agency option, including, for example, information about documentation, withholding, or reporting processes, its periodic review, and information about any material failures that were disclosed to the IRS (including remediation plans). The IRS may request phone or video interviews with relevant personnel or a partnership or trust to which WT applied the agency option as part of such review. WT is required to respond within a reasonable period of time to any such requests.

(D) Additional Review Procedures. In limited circumstances, the IRS may direct WT or any partnership or trust described in sections 9.01 and 9.02 of this Agreement with which WT has an agreement to perform additional, specified review procedures. The IRS reserves the right to require WT or a partnership or trust to which WT applied the agency option to engage an external auditor to perform the additional review procedures regardless of whether such auditor performed the periodic review. The IRS will provide the responsible officer of WT with a written plan describing the additional review procedures and will provide a period of not more than 120 days within which the WT must provide to the IRS a report covering the review’s findings.

(A) In General. WT may enter an agreement with a nonwithholding foreign partnership or nonwithholding foreign trust that is either a simple or grantor trust described in this section 9.01(A) to apply the simplified joint account documentation, reporting, and withholding procedures provided in section 9.01(B) of this Agreement. WT and the partnership or trust that apply this section 9.01 to any calendar year must apply these rules to the calendar year in its entirety. WT and the partnership or trust may not apply this section 9.01 to any calendar year in which the partnership or trust has failed to make available to WT or WT’s auditor the records described in this section 9.01(A)(5) within 90 days after these records are requested and the partnership or trust must waive any legal prohibitions against providing such records to WT. If the partnership or trust has failed to make these records available within the 90-day period, or if WT and the partnership or trust fail to comply with any other requirements of this section 9.01, WT must apply the provisions of §§ 1.1441–1 and 1.1441–5 to the partnership or trust as a nonwithholding foreign partnership or nonwithholding foreign trust, must correct its withholding for the period during which the failure occurred in accordance with section 7.03 of this Agreement, and cannot apply this section 9.01 to subsequent calendar years. WT and the partnership or trust that apply this section 9.01 to any calendar year are not required to apply this section 9.01 to subsequent calendar years.

WT may not apply the rules of section 9.01(B) unless it has made a PR election under section 6.02(D) of this Agreement.

A partnership or trust is described in this section 9.01(A) of this Agreement if the following conditions are met.

(1) The partnership or trust is a certified deemed-compliant FFI (other than a registered deemed-compliant Model 1 IGA FFI), an owner-documented FFI, an exempt beneficial owner, or an NFFE (other than a WP or WT);

(2) The partnership or trust is a direct beneficiary or owner of WT;

(3) None of the partnership’s or trust’s partners, beneficiaries, or owners is a flow-through entity or intermediary;

(4) None of the partnership’s or trust’s partners, beneficiaries, or owners is a U.S. person and none of its foreign partners, beneficiaries, or owners is subject to withholding or reporting under chapter 4 (which would include a nonparticipating FFI or certain passive NFFEs); and

(5) The partnership or trust agrees to make available upon request to WT and WT’s auditor for purposes of WT’s compliance review under section 8 of this Agreement (including to respond to IRS inquiries regarding its compliance review) records that establish that the partnership or trust has provided WT with documentation for purposes of chapters 3 and 4 for all of its partners, beneficiaries, or owners.

(B) Modification of Obligations for WT.

(1) WT may rely on a valid Form W–8IMY provided by the partnership or trust and may rely on a withholding statement that meets the requirements of §§ 1.1441–5(c)(3)(iv) or (e)(5)(iv), and § 1.1471–3(c)(3)(iii)(B), if the payment is a withholdable payment, and that provides information for all partners, beneficiaries, or owners together with valid Forms W–8 and, for a withholdable payment made to a partner, beneficiary, or owner that is an entity, documentation required under § 1.1471–3(d) to establish such partner’s, beneficiary’s, or owner’s chapter 4 status. The withholding statement, however, need not provide any allocation information.

(2) WT must treat amounts distributed to, or included in the distributive share of, the partnership or trust as allocated solely to a partner, beneficiary, or owner that is subject to the highest rate of withholding under chapter 3 and must withhold at that rate.

(3) WT may pool report amounts distributed to, or included in the distributive share of, the partnership’s or trust’s direct partners, owners, or beneficiaries in chapter 3 reporting pools on Form 1042–S as described in section 6.02 of this Agreement.

(4) After WT has withheld in accordance with section 9.01(B)(2) of this Agreement, it may file a separate Form 1042–S for any partner, beneficiary, or owner who requests that it do so. If WT issues a separate Form 1042–S for any partner, beneficiary, or owner, it cannot include such partner, beneficiary, or owner in WT’s chapter 3 reporting pool. If WT has already filed a Form 1042–S and included the partner, beneficiary, or owner in a chapter 3 reporting pool, it must file an amended return to reduce the amount of the payment reported to reflect the amount allocated to the recipient on the recipient’s specific Form 1042–S. WT may file a separate Form 1042–S for a partner, beneficiary, or owner only if the partnership or trust provides a withholding statement that includes allocation information for the requesting partner, beneficiary, or owner and only if the partnership or trust has agreed in writing under section 9.01(A)(5) of this Agreement to make available to WT or WT’s auditor the records that substantiate the allocation information included in its withholding statement.

(5) WT may not include any amounts distributed to, or included in the distributive share of, a partnership or trust to which WT is applying the rules of this section 9.01 in any collective refund claim made under section 7.02 of this Agreement.

(C) Transitional Rule through December 31, 2014. For the period beginning on the effective date of this Agreement and ending December 31, 2014, a WT that had previously entered into an agreement with a partnership or trust to apply the provisions described in this section 9.01 (the “joint account option”) may continue to act consistent with such agreement provided that the agreement meets the requirements of section 10 of Revenue Procedure 2003–64 (as amended). However, WT is required to withhold with respect to such partnership or trust under chapter 4 to the extent required under this Agreement.

WT may enter an agreement with a nonwithholding foreign partnership or nonwithholding foreign trust that is either a simple or grantor trust described in section 9.02(A) of this Agreement under which the partnership or trust agrees to act as an agent of WT with respect to its partners, beneficiaries or owners, and, as WT’s agent, to apply the provisions of the WT agreement to the partners, beneficiaries, or owners. By entering into an agreement with a partnership or trust as described in this section 9.02, WT is not assigning its liability for the performance of any of its obligations under the WT agreement. WT and the partnership or trust to which WT applies the rules of this section 9.02 (agency option) are jointly and severally liable for any tax, penalties, and interest that may result from the failure of the partnership or trust to meet any of the obligations imposed by its agreement with WT. WT and the partnership or trust that apply the agency option to any calendar year must apply these rules to the calendar year in its entirety. Generally, WT and the partnership or trust that apply the agency option to any calendar year are not required to apply the agency option to subsequent calendar years. If, however, WT withholds and reports any adjustments required by corrected information in a subsequent calendar year under section 9.02(B)(2) of this Agreement, WT must apply the agency option to that calendar year in its entirety.

If the partnership or trust is included in WT’s periodic review of compliance as described in section 9.02(A)(5) of this Agreement, WT and the partnership or trust may not apply the agency option to any calendar year in which the partnership or trust has failed to make available to WT or WT’s auditor the records described in this section 9.02 within 90 days after these records are requested and the partnership or trust must waive any legal prohibitions against providing such records to the WT. If, for any calendar year, the partnership or trust has failed to make these records available within the 90-day period, or if WT and the partnership or trust fail to comply with any other requirement of this section 9.02, WT must apply §§ 1.1441–1 and 1.1441–5 to the partnership or trust as a nonwithholding foreign partnership or nonwithholding foreign trust, correct its withholding for the period in which the failure occurred in accordance with section 7.03 of this Agreement, and cannot apply this section 9.02 to subsequent calendar years.

WT may not apply the rules of this section 9.02 unless it has made a PR election under section 6.02(C) of this Agreement.

(A) Eligible Partnership or Trust.

A partnership or trust is described in this section 9.02(A) of this Agreement if the following conditions are met:

(1) The partnership or trust is either a direct beneficiary or owner of WT or an indirect beneficiary or owner of WT that is a direct partner, beneficiary, or owner of a partnership or trust to which WT also applies this section 9.02.

(2) The partnership or trust is an FFI that is a certified deemed-compliant FFI (other than a registered deemed-compliant Model 1 IGA FFI), owner-documented FFI, an NFFE, or an exempt beneficial owner.

(3) None of the partnership’s or trust’s partners, beneficiaries, or owners is a withholding foreign trust, withholding foreign partnership, participating FFI, registered deemed-compliant FFI, registered deemed-compliant Model 1 IGA FFI, or qualified intermediary acting as an intermediary for a payment made by WT to the partnership or trust.

(4) WT may not act as a withholding foreign trust with respect to any direct or indirect beneficiary or owner of the partnership or trust that is a U.S. non-exempt recipient, unless the U.S. non-exempt recipient is a beneficiary or owner of an owner-documented FFI or passive NFFE to which WT applies the agency option and is included in WT’s U.S. payee pool (described in section 6.02(C) of this Agreement).

(5) The partnership or trust agrees to comply with the documentation requirements described in section 4 of this Agreement.

(6) The partnership or trust agrees to comply with the compliance procedures described in section 8.05 of this Agreement in order to allow the responsible officer of WT to make a certification to the IRS regarding the partnership’s or trust’s compliance with this section 9.02 by (i) providing WT with the certification required under section 8.03 of this Agreement for each certification period, or (ii) providing WT with documentation or other information for review. The partnership or trust must also agree to respond (either directly or through WT) to IRS inquiries regarding its compliance review described in section 8.07 of this Agreement, including, if applicable, providing the WT and the IRS with the auditor’s report described in section 8.06 of this Agreement.

(B) Modification of Obligations for WT.

(1) WT may rely on a valid Form W–8IMY provided by the partnership or trust, together with a withholding statement described in §§ 1.1441–5(c)(3)(iv) or (e)(5)(iv), and § 1.1471–3(c)(3)(iii)(B) if the payment is a withholdable payment, that includes all information necessary for WT to fulfill its withholding, reporting, and filing obligations under this Agreement. For a withholdable payment, the withholding statement may include a chapter 4 withholding rate pool (as defined in § 1.1471–1(b)(20)) of nonparticipating FFIs for payments of amounts subject to chapter 4 withholding. The withholding statement may also include chapter 3 withholding rate pools (as defined in § 1.1441–1(c)(44)) for partners, beneficiaries, or owners that are not intermediaries, flow-through entities (or persons holding interests in the partnership or trust through such entities), U.S. non-exempt recipients, or passive NFFEs with one or more substantial U.S. owners (or one or more controlling persons that is a specified U.S. person under an applicable Model 1 or Model 2 IGA), and the partnership or trust need not provide to WT documentation for these partners, beneficiaries, or owners. The partnership or trust is required to disclose to WT any partner or interest holder that is a passive NFFE with substantial U.S. owners (or controlling persons that are specified U.S. persons under an applicable IGA) or that is a U.S. non-exempt recipient as well as the account holders of any nonqualified intermediary or interest holders in a flow-through entity which has an interest in the partnership or trust, and provide all of the documentation and other information relating to those account holders and interest holders that is required for WT, or another withholding agent, to report the payments made to those account holders and interest holders to the extent required by section 6 of this Agreement.

(2) Timing of Withholding. WT must withhold on the date an amount is distributed to, or included in the distributive share of, the partnership or trust based on a withholding statement provided by the partnership or trust on which WT is permitted to rely. The amount allocated to each partner, beneficiary, or owner in the withholding statement may be based on a reasonable estimate of the partner, beneficiary, or owner’s distributive share of income subject to withholding for the year. The partnership or trust must correct the estimated allocations to reflect the partner’s, beneficiary’s, or owner’s actual distributive share and must provide this corrected information to WT, on the earlier of the date that the Owner Statement or Beneficiary Statement is mailed or otherwise provided to the beneficiary or owner or the due date for furnishing the statement (whether or not the partnership or trust is required to prepare and furnish the statement). If that date is after the due date for WT’s Forms 1042 and 1042–S (without regard to extensions) for the calendar year, WT may withhold and report any adjustments required by the corrected information in the following calendar year.

(3) Payments Reportable under Chapters 3 and 4. WT shall report on Form 1042–S all amounts subject to chapters 3 and 4 withholding distributed to, or included in the distributive share of, the partnership or trust as follows:

(i) For a direct partner, beneficiary, or owner of the partnership or trust that is a nonparticipating FFI, WT shall report an amount subject to withholding using the chapter 4 reporting pool described in section 6.02(C) of this Agreement with the partnership or trust reported as the recipient.

(ii) For a direct partner, beneficiary, or owner of the partnership or trust that is a foreign person for which no withholding is required under chapter 4 (other than an intermediary, agent, or flow-through entity described below), WT shall report an amount subject to chapter 3 withholding using the chapter 3 reporting pools as described in section 6.02(D) of this Agreement with the partnership or trust reported as the recipient.

(iii) For a direct or indirect partner, beneficiary, or owner of the partnership or trust that is a nonqualified intermediary or foreign flow-through entity, WT shall report payments of amounts subject to chapter 4 withholding included in a chapter 4 withholding rate pool of nonparticipating FFIs using the chapter 4 reporting pool for such partner, beneficiary, or owner with the nonqualified intermediary or foreign flow-through entity reported as the recipient, and WT shall report payments of amounts subject to chapter 3 withholding that are not withholdable payments or are withholdable payments for which no chapter 4 withholding is required by reporting the payments as made to specific recipients as described in 6.02(B) of this Agreement.

(4) Form 8966 Reporting Requirements. If WT is an FFI and if the partnership or trust is a U.S. account (or U.S. reportable account), WT is required to report the partnership or trust consistent with its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI. The agreement between WT and the partnership or trust must also provide that WT shall report withholdable payments that the partnership or trust distributes to, or includes in the distributive share of, a partner, beneficiary, or owner that is an NFFE (other than an excepted NFFE) with one or more substantial U.S. owners (or one or more controlling persons that is a specified U.S. person under an applicable IGA) and is the beneficial owner of the withholdable payment received by the partnership or trust. WT must report on Form 8966 in the time and manner provided in § 1.1474–1(i)(2). Such report must include the name of the NFFE that is owned by a substantial U.S. owner (or controlling person that is a specified U.S. person); the name, address, and U.S. TIN of each substantial U.S. owner (or controlling person that is a specified U.S. person); the total of all withholdable payments made to the NFFE during the calendar year (or reportable period under the applicable IGA); and any other information as required by the form and its accompanying instructions.

(C) Other Requirements of Agency Agreement. WT shall require the partnership or trust to which it applies the agency option described in this section 9.02 to provide WT with all the information necessary for WT to meet its obligations under this Agreement. No provisions shall be contained in the agreement between WT and the partnership or trust that preclude, and no provisions of this Agreement shall be construed to preclude, the partnership or trust’s joint and several liability for tax, penalties, and interest under chapters 3 and 4 to the extent that underwithholding, penalties, and interest have not been collected from WT and the underwithholding or failure to report amounts correctly on Forms 1042, 1042–S or 8966, is due to the partnership or trust’s failure to properly perform its obligations under its agreement with WT. Nothing in the agreement between WT and the partnership or trust shall be construed to limit the partnership or trust’s requirements under chapter 4 as a certified deemed-compliant FFI, an NFFE, or an exempt beneficial owner. Further, nothing in the agreement between WT and the partnership or trust shall permit the partnership or trust to assume primary chapters 3 and 4 withholding responsibility.

(D) Transitional Rule through December 31, 2014. For the period beginning on the effective date of this Agreement and ending December 31, 2014, a WT that entered into an agreement with a partnership or trust to apply the provisions described in this section 9.02 (“the agency option”) may continue to act consistent with such agreement provided that the agreement meets the requirements of section 10 of Revenue Procedure 2003–64 (as amended). However, WT is required to withhold with respect to such partnership or trust under chapter 4 to the extent required under this Agreement.

(A) General Requirements. WT may act as a withholding foreign trust for reportable amounts distributed to, or included in the distributive share of, passthrough beneficiaries or owners and indirect beneficiaries or owners if such indirect beneficiary or owner is not a U.S. non-exempt recipient. Notwithstanding the preceding sentence, WT may act as a withholding foreign trust with respect to an indirect beneficiary or owner that is a U.S. non-exempt recipient if the indirect beneficiary or owner is included in a passthrough beneficiary’s or owner’s chapter 4 withholding rate pool of recalcitrant account holders or U.S. payees. WT does not need to use the agency option described in section 9.02 of this Agreement or make the pooled reporting election described in section 6.02(D) of this Agreement to apply the procedures described in this section 9.03.

(A) Automatic Termination. Notwithstanding section 10.02 of this Agreement, this Agreement will terminate automatically in the event that the auditor or the IRS (including during its compliance review described in section 8.07 of this Agreement) discovers that WT was not in possession of Forms W–8 or W–9, as applicable, or documentary evidence, as permitted under section 4.01(B), for any direct beneficiary or owner at any time that withholding or reporting was required under section 3.02 of this Agreement. The automatic termination will be effective as of December 31 of the year in which the auditor or the IRS makes that discovery.

(B) Cure and Reinstatement after Automatic Termination. This Agreement will be reinstated, effective the same date it automatically terminated under section 10.03(A) of this Agreement, if—

(1) WT obtains appropriate Forms W–8 or W–9 or documentary evidence, as permitted under section 4.01(B), (that relate to the time withholding or reporting was required) for each such undocumented beneficiary or owner before March 15 of the year following the year in which the Agreement automatically terminated, or

(2) All such undocumented beneficiaries or owners have ceased to be beneficiaries or owners in WT before March 15 of the year following the year in which the Agreement automatically terminated.

(C) Payment of Underwithholding and Reporting upon Termination. In the event of automatic termination of this Agreement under this section 10.03, WT must pay any underwithholding of tax, interest, and penalties that the IRS determines is attributable to each undocumented beneficiary or owner for the period during which the beneficiary or owner was undocumented based on the presumption rules, and, if WT has made a pooled reporting election for chapter 3 purposes, WT must file beneficiary or owner specific Forms 1042–S for amounts subject to chapter 3 withholding for which no chapter 4 withholding is required and Owner Statements and Beneficiary Statements as part of Form 3520–A reporting the names and addresses and other required information, as appropriate, for every undocumented beneficiary or owner from the earliest time the documentation was required for that undocumented beneficiary or owner through the date of termination. WT may, however, continue to report on a pooled basis for documented foreign direct beneficiaries or owners through this period.

(D) Reinstatement after Termination (other than Automatic Termination). After the date of termination of this Agreement, WT may not act as a withholding foreign trust, and must so notify any persons to which WT has furnished a withholding foreign trust certificate. After the date of termination of this Agreement, the IRS may reinstate this Agreement (or the IRS may require WT to enter into a new withholding foreign trust agreement) on such terms and conditions and with such modifications as the IRS may determine.

Sec. 10.04. Significant Change in Circumstances. For purposes of this Agreement, a significant change in circumstances includes, but is not limited to—

(A) A change in U.S. federal law or policy, or applicable foreign law or policy, that affects the validity of any provision of this Agreement, materially affects the procedures contained in this Agreement, or affects WT’s ability to perform its obligations under this Agreement;

(B) A ruling of any court that affects the validity of any material provision of this Agreement;

(C) A significant change in WT’s business practices that affects WT’s ability to meet its obligations under this Agreement;

(D) If applicable, a material change in the know-your-customer rules and procedures set forth in the Attachments to this Agreement when WT relied on documentary evidence as permitted in section 4.01(B) of this Agreement;

(E) If WT is an FFI (other than a retirement fund), termination of its status as a participating FFI, registered deemed-compliant FFI, or a registered deemed-compliant Model 1 IGA FFI; or

(F) If WT is acting as a sponsoring entity on behalf of a sponsored FFI or sponsored direct reporting NFFE, it fails to comply with the due diligence, withholding, reporting, and compliance requirements of a sponsoring entity.

Sec. 10.05. Events of Default. For purposes of this Agreement, an event of default occurs if WT fails to perform any material duty or obligation required under this Agreement and the responsible officer had actual knowledge of or should have known the facts relevant to the failure to perform any material duty. An event of default includes, but is not limited to, the occurrence of any of the following:

(A) WT fails to implement adequate procedures, accounting systems, and internal controls to ensure compliance with this Agreement;

(B) WT underwithholds an amount that WT is required to withhold under chapter 3 or 4 and fails to correct the underwithholding or to file an amended Form 1042 reporting, and paying, the appropriate tax;

(C) WT makes excessive refund claims;

(D) WT fails to file required Forms 1040NR (if required), 1042, 1042–S, 8966, 3520–A, or the Owner Statements or Beneficiary Statements required as part of such form by the due date specified on such forms or files forms that are materially incorrect or fraudulent;

(E) If WT is an FFI, WT fails to materially comply with its FATCA requirements as a participating FFI, registered deemed-compliant FFI, or registered deemed-compliant Model 1 IGA FFI;

(F) If WT is a sponsoring entity, WT fails to comply with the due diligence, withholding, reporting, and compliance requirements of a sponsoring entity;

(G) WT fails to perform a periodic review when required or to document the findings of such review in a written report;

(H) WT fails to inform the IRS within 90 days of any significant change in its business practices to the extent that change affects WT’s obligations under this Agreement;

(I) WT fails to cure a material failure identified in the qualified certification described in section 8.03(B) of this Agreement or identified by the IRS;

(J) WT makes any fraudulent statement or a misrepresentation of a material fact with regard to this Agreement to the IRS, a withholding agent, or WT’s auditor;

(K) The IRS determines that WT’s auditor is not sufficiently independent to adequately perform its audit function and WT fails to arrange for a periodic review conducted by an auditor approved by the IRS;

(L) WT fails to make deposits in the time and manner required by section 3.04 of this Agreement or fails to make adequate deposits, taking into account the procedures of section 7.05 of this Agreement;

(M) If applicable, WT fails to inform the IRS of any change in the know-your-customer rules described in the Attachment to this Agreement within 90 days of the change becoming effective when WT relied on documentary evidence as permitted in section 4.01(B) of this Agreement;

(N) WT fails to cooperate with the IRS on its compliance review described in section 8.07 of this Agreement;

(O) A partnership or trust to which WT applies the agency option is in default with the agency agreement and WT fails to terminate that agreement within the time period specified in section 10.02 of this Agreement; or

(P) WT fails to materially comply with the requirements of a nonwithholding foreign trust under chapter 3 with respect to any beneficiary or owner for which it does not act as a withholding foreign trust.

Sec. 10.06. Notice and Cure. Upon the occurrence of an event of default, the IRS will deliver to WT a notice of default specifying each event of default. WT must respond to the notice of default within 60 days (60-day response) from the date of the notice of default. The 60-day response shall contain an offer to cure the event of default and the time period in which to cure or shall state why WT believes that no event of default has occurred. If WT does not provide a 60-day response, the IRS will deliver a notice of termination as provided in section 10.02 of this Agreement. If WT provides a 60-day response, the IRS shall either accept or reject WT’s statement that no default has occurred or WT’s proposal to cure the event of default.

If the IRS rejects WT’s statement that no default has occurred or rejects WT’s proposal to cure the event of default, the IRS may offer a counter-proposal to cure the event of default with which WT will be required to comply within 30 days. If WT fails to provide a 30-day response, the IRS will send a notice of termination in accordance with section 10.02 of this Agreement, which WT may appeal within 30 days of the date of the notice by sending a written appeal to the address specified in section 11.06 of this Agreement. If WT appeals the notice of termination, this Agreement shall not terminate until the appeal has been decided. If an event of default is discovered in the course of an audit, WT may cure the default, without following the procedures of this section 10.06, if the external auditor’s report describes the default and the actions that WT took to cure the default and the IRS determines that the cure procedures followed by WT were sufficient. If the IRS determines that WT’s actions to cure the default were not sufficient, the IRS shall issue a notice of default and the procedures described in this section 10.06 shall be followed.

Sec. 10.07. Renewal. If WT is an FFI or an NFFE that is a sponsoring entity and intends to renew this Agreement for an additional term, it shall submit an application for renewal to the IRS on the IRS FATCA registration website, as provided in this revenue procedure, no earlier than one year prior to the expiration of this Agreement and no later than six months prior to the expiration of this Agreement, in accordance with the instructions to Form 8957, Foreign Account Tax Compliance Act (FATCA) Registration, or as otherwise provided in published guidance. Any such application for renewal must contain an update of the information provided by WT to the IRS in connection with the application to enter into this Agreement and any other information the IRS may request in connection with the renewal process. Either the IRS or WT may seek to negotiate a new withholding foreign trust agreement rather than renew this Agreement.

A WT not described in the preceding paragraph must renew its WT agreement by submitting a request for renewal to the IRS at the address provided in section 11.06 of this Agreement.

(A) Calendar Year 2014. If WT applies to renew its WT agreement and the renewal is approved on or before August 31, 2014, this Agreement is effective on June 30, 2014. If WT is not a retirement fund or an NFFE that is not a sponsoring entity and applies to renew its WT agreement on the IRS FATCA registration website after August 31, 2014, and the renewal is approved, this Agreement is effective on the date of approval. If WT is a retirement fund or an NFFE that is not a sponsoring entity and renews its WT agreement after August 31, 2014, this Agreement is effective on the date of renewal as provided in an approval notice sent by the IRS. The renewal is approved on the later of the date WT is issued a GIIN or the date WT submits a request for renewal.

If WT is a new WT applicant (other than a retirement fund or an NFFE that is not a sponsoring entity) that applies to enter into a WT Agreement on or before August 31, 2014, and its application is approved, the effective date of this Agreement is June 30, 2014, provided that it obtains a GIIN, if it has not already done so, within 90 days of such approval. If WT is a new WT applicant (other than a retirement fund or an NFFE that is not a sponsoring entity) that applies to enter into a WT Agreement after August 31, 2014, and the application is approved, the effective date of this Agreement is the date it is issued a WT–EIN, provided that it obtains a GIIN, if it has not already done so, within 90 days of such approval. If WT is a new WT applicant that is a retirement fund or an NFFE that is not a sponsoring entity that applies to enter into a WT Agreement and its application is approved, the effective date of this Agreement is the date it is issued a WT–EIN.

(B) Calendar Years after 2014. For calendar years after 2014, the effective date of this Agreement is January 1 of the current calendar year if WT’s application for WT status is submitted on or before March 31. If WT’s application for WT status is submitted on or after April 1, the effective date of this Agreement is January 1 of the calendar year following the year in which the application was submitted. WT must be in compliance with this Agreement beginning January 1 of the calendar year in which this Agreement is effective.

(A) In General. If this Agreement is effective beginning in calendar year 2014, WT may act as a withholding foreign trust for the entire calendar year if WT acts in accordance with Revenue Procedure 2003–64 (as amended) for amounts subject to chapter 3 withholding (as defined in section 2.04 of the WT agreement) received before June 30, 2014, as if WT’s WT agreement were effective on January 1, 2014, and expired on June 30, 2014, and for amounts subject to chapter 3 withholding and withholdable payments received between June 30, 2014, and September 1, 2014, WT applies the principles described in section 12.02(B) of this Agreement. For the period beginning on September 1, 2014, through the term of this Agreement, WT must comply with this Agreement provided that this Agreement has not been terminated.

(B) Special Procedures for Payments Received Prior to September 1, 2014. If WT receives a withholdable payment or an amount subject to chapter 3 withholding prior to September 1, 2014, WT may represent itself to its withholding agent as a withholding foreign trust, provided that WT complies with its obligations under the WT agreement in effect prior to June 30, 2014, and, if WT is renewing this Agreement, it submits a request for renewal on or before August 31, 2014. However, because this Agreement requires WT to assume primary chapter 4 withholding responsibilities with respect to its beneficiaries or owners under sections 1471 and 1472, if WT makes a distribution for which withholding is required under chapter 4 beginning July 1, 2014, with respect to a beneficiary or owner and does not withhold under chapter 4 to the extent required under the revised WT agreement, WT must apply the procedures referenced in § 1.1474–2(b) to satisfy any underwithholding.