Tax Agency: FAQs

The regulation applicable to Spanish financial institutions is the Agreement between the Kingdom of Spain and the United States of America for the improvement of international tax compliance and the implementation of the Foreign Account Tax Compliance Act-FATCA, henceforth the Agreement, published in the Official State Gazette of 1 of July 2014, which is directly binding and of obligatory compliance. As a complement to the same, Order HAP/1136/2014, of 30 June, hereinafter, the Order, has been approved, which regulates certain issues related to the obligations to provide information and due diligence established in the agreement between the Kingdom of Spain and the United States of America for the improvement of international tax compliance and the application of American law on foreign account tax compliance and the annual financial accounts informative declaration for specific American individuals is approved, form 290.

Regardless of the foregoing, the regulation of the American Treasury may be applicable in specific cases, for example in those set out in article 1.2.2 and article 4 of the Order.

Likewise, article 37 bis has been incorporated recently in the General Regulation of the tax management and inspection actions and procedures and of the development of the common taxation procedure norms, approved by Royal Decree 1065/2007 of 27 July, which regulates financial institutions,' hereinafter FI, obligations to provide information on financial accounts.

Those set out in its article 4 and developed in article 3 of the Order. Therefore, if the financial institution (FI) is a Spanish FI obliged to communicate information and it determines that it does not have any American account subject to information communication after having applied the procedures of due diligence, it will not be obliged to submit form 290, however it is still subject to fulfilling the rest of duties and, particularly, that of being registered with the American Tax Administration.

The answer would be identical in the case of a Spanish FI obliged to communicate information that only had accounts considered to be exempt products according to the provisions of appendix II of the Agreement.

The register referred to in section d) of article 3 of the Order will be carried out by telematic means on the website that the the US Tax Administration Agency (IRS) has created for this purpose (https:/sa.www4.irs.gov/fatca-rup /).

As with the rest of the obligations of article 4 of the Agreement, the registration is generally mandatory for all entities that are considered to be a Spanish financial institution obliged to communicate information. If this is not considered, such as for example, in the case of collective real estate investment institutions, there is no obligation to register.

It is also mandatory to register for small Spanish financial institutions with local clientele in Annex II to the Agreement that have an obligation to communicate information, for sponsoring entities, sponsored investment entities, sponsored foreign companies and, where applicable, investment instruments sponsored by a small number of investors, referred to in sections C and D of section II of Annex II to the Agreement and in the terms set out in that Annex, as well as for those entities that invoke their status or status as a foreign financial institution considered compliant, when required in applicable regulations issued by the US Treasury.

With the exceptions indicated, the entities identified in Annex II to the Agreement, for example pension funds, as well as certain collective investment instruments that meet the requirements set out therein, will not be required to register.

As for the deadline for registering and obtaining the corresponding Global Intermediary Identification Number (GIIN), although in general, the IF must provide this GIIN to avoid withholding on payments made since 1 July 2014 , this deadline extends until January 1, 2015 for the IF of a country with which the USA. You have signed a FATCA Agreement form 1, as is the case in Spain.

To entities that meet the requirements of the applicable regulations issued by the United States Treasury for consideration as an exempt beneficial owner, as a foreign financial institution exempt from or as a foreign financial institution considered compliant, which, by application of the Agreement, are not considered to be a Spanish financial institution obliged to communicate information.

No, it can be any type of entity provided that it has suitable procedures for compliance with due diligence measures and the conservation of documents.

In the case of an investment fund, although it may be frequent for the management company, as its representative and by applying the Article 5,3 of the Agreement shall be responsible for complying with the obligations arising from the Agreement, and shall not prevent the fulfilment of the obligations from being carried out through another entity, provided that the provisions of that article are complied with. 6 However, if the investment fund is eligible for the financial institution category considered compliant for the purposes of being a financial institution not obliged to communicate information, both the fund and its sponsor entity must meet the requirements indicated in this regard in section II of Annex II to the Agreement.

The date for determining whether an account is new, whether the account holder is an individual or an entity, is July 1, 2014 in both cases.

Notwithstanding the above, section 1 of article 8 of the Order establishes that new accounts opened after 30 of June 2014 by customers who hold physical persons open at the Spanish financial institution obliged to communicate information on one or more accounts to that date, may be considered as pre-existing accounts provided that the requirements set out therein are met.

In the case of pre-existing accounts of an individual that are accounts of a lower value, the review must have been completed as of 30 June 2016.

In the case of pre-existing accounts of an individual that are accounts of greater value, the review must have been completed as of 30 June 2015.

In the case of pre-existing accounts of an individual that were not accounts of greater value at 30 June 2014 but at the conclusion of 2015 or any subsequent calendar year would have become such, the enhanced review procedures must be completed within 6 months, counted from the end of the calendar year in question.

In the case of pre-existing accounts of an entity with a balance or value that exceeds US $250,000 at 30 June 2014, the review must have been completed at 30 June 2016.

In the case of pre-existing accounts of an entity whose balance or value at 30 June 2014 did not exceed US $250,000 but of US $1,000,000 at 31 December 2015 or any subsequent calendar year, the review procedures must end within the period of six months, counted from the end of the calendar year in question.

Pre-existing financial accounts that, in application of the aforementioned review procedures, are identified as US accounts subject to reporting must be included in form 290 corresponding to the year in which such identification took place.

In the case indicated, the Spanish financial institution obliged to communicate information should not include in form 290 the information related to exercising this option nor to the accounts that it affects, although it will have to preserve this information at the disposal of the Tax Administration.

Every Spanish financial institution obliged to communicate information will have to convert into US dollars the thresholds expressed throughout appendix I of the Agreement, applying the latest exchange rate published the calendar year previous to the one in which the financial institution determines this balance.

For example, the exchange rates which must be applied on 30 June 2014 to thresholds for application to pre-existing financial accounts whose balance or value is expressed in a different currency from the US dollar will be the exchange rates published corresponding to the last day of 2013.

In the case of joint accounts, both for the purposes of determining whether or not they exceed the thresholds set out in Annex I to the Agreement and in order to declare the balance of the account in form 290, each account holder will be assigned the total balance or value of each financial account. This standard is also applicable for the purpose of aggregating balances.

However, the existence of a joint account subject to reporting information does not imply that the information relating to the other holders of the accounts declared with regard to which it should not be reported in the application of the Agreement and its Development Order should be included in form 290.

In the aforementioned case, form 290 must include information relating to the specific U.S. person who exercises control over the entity that owns the US account subject to reporting, in addition to information relating to that entity that owns the account. However, the balance or declared value of the financial account held by the non-US entity will be the total amount corresponding to it, without it being the subject of any kind of distribution or apportionment.

In the event indicated, the account holder must be identified as the U.S. entity, since this specific U.S. person holds the account holder as provided in Article 1 (e) of the Agreement.

The outline of the question is as follows:

Form 290 will include information relating to each US account subject to information communication and, from that element, enter the information relating to the holders of the account and, where applicable, to the persons exercising control over those account holders and who determine that this account must be declared.

Therefore, in the case indicated, together with the information relating to the account, which will appear with its balance or total value, identify both specific U.S. and non-US persons who are not an IF and are passive as holders of the same. In addition, with regard to the non-US entity, its nature must be indicated as indicated in number 17 of Annex I to the Order, identifying itself as a person who exercises control over that holder to the specific US person.

No. According to the definition in point nn) of Article 1 (1) of the Agreement, the persons exercising control will be those individuals who have direct or indirect control of the account holder. Therefore, you will not be able to identify yourself to an entity as a person who exercises control in the case indicated.

The term people exercising control must be interpreted in a manner consistent with the Recommendations of the Financial Action Task Force (FATF). In the case considered, a percentage of 25% could be used.

Yes. The residency certificate referred to in article D.1 of section VI of the Agreement would be admissible, for example.

The account holder's identification number (Global Intermediary Identification Number, G IIN) verified in the list published for this purpose by the US Tax Agency or based on other information that is public or that is available to the Spanish financial institution obliged to communicate information.

In turn, subsection b) of section D.3. Of section IV of Annex I to the Agreement, it refers to the fact that, as a result of the procedure followed in accordance with the provisions of section 2 of article 5 of the Agreement (significant breach), the Spanish IF or other jurisdiction that owns the account is treated by the US Tax Administration Agency as non-participating IF. In this case, the account will not be an American account subject to information communication, but payments made to the account holder will be subject to information communication as regulated in section 1 (b) of article 4 of the Agreement.

It must be understood that it refers to a residence certificate issued by an authorised State body, such as an administrative or body of the same, or a local entity of the country from which the beneficiary alleges his/her residence.

In relation to this type of group life insurance, the Spanish financial institution obliged to communicate information may process them as an account that is not subject to taxation to information communication, until the date on which the corresponding benefit is payable to the employee or beneficiary, provided that it receives a certificate of the company that proves that no employee of the insurance covers is an American person (not obliged to review all the documentation that it has the company in order to determine whether the account holder's condition is incorrect or not reliable) and the following requirements are met:

The policyholder is the company and this insurance covers at least 25 employees.
The employees covered have the right to receive the corresponding benefit and to designate beneficiaries in the event of the death contingency.
The total amount payable to the employee or beneficiary does not exceed one million dollars.

As indicated in Order HAP/1136/2014, if the person filing the tax return acts as sponsoring entity in accordance with the provisions of Article 2 (1) of the same, the information referred to in sections 1 to 6 of the Annex to that Order must be supplied both with regard to the sponsored investment entity and the entity that acts as sponsoring entity.

With regard to the date of birth of the holder of the financial account (or, if applicable, of the persons exercising control) , if it is not completed by leaving this field blank, a warning message will be displayed indicating this circumstance, so that it can carry out the appropriate actions to try to obtain this information. This notification will be displayed regardless of whether or not the US Tax ID number is filled in.

Please note that in order to benefit from the flexibility allowed after publication by the IRS of Notice 2023-11, it is essential to complete the date of birth of the natural person or the controlling person.

You can see the frequently asked question What obligations should a financial institution have to meet in order to benefit from the flexibility allowed by the Notification (Notice 2023-11) published by the IRS?

Yes, the US TIN (NIF) is mandatory as set out in Royal Decree 1021/2015, Additional Provision Three, and therefore all efforts must be made in accordance with Due Diligence to achieve this.

Accordingly, the Account Holder must be informed of the US TIN or, where applicable, of the persons exercising control (Substancial Owners).

The NIR of the Account Holder or the Substantial Owner must be in the US format. If you do not have it, you must enter the "NIR" tag in the XML and you can complete the TIN with some of the numerical codes provided by the IRS (Internal Revenue Service) if the reason for its absence corresponds to any of the circumstances specified by this body (see the question How is the NIR field completed when it is not available?).

In this regard, it is recommended to consult the frequently asked questions Q3 and Q6 published by the IRS (FATCA-FAQs General-Reporting), at the following links:

We are a Model 1 FFI and the NIR relief provided under Notice 2017-46 regarding treatment of pre-existing accounts will expire with the reporting of the 2019 data. Do we need to report all required Tins when we provide 2020 and future tax data?

We are a Model 1 FFI and have not obtained a U.S. NIR for an account as required in the 2020 data. Are there NIR codes we can use to populate the NIR field where we have not yet been able to obtain the NIR due to specific circumstances?

Us NIR format

The content of the TIN label when it is American must be adjusted to the following formats:

Nine consecutive digits without hyphens or other clearances (e.g. "123456789")
Nine digits with two hyphens, one script after the third digit and another script after the fifth digit (e.g. "123-45-6789")
Nine digits with a script after the second digit (e.g. "12-3456789")
It will not be admitted when it is completed as follows: 000000000 Or when certain numerical patterns are entered such as 123456789 and 987654321.

Consequences of not completing it

With regard to the consequences (frequently asked question Q3 published by the IRS (FATCA-FAQs General-Reporting), failure to complete the US TIN does not automatically result in a significant breach of the FATCA Agreement; Although the IRS will take into account the facts, circumstances and causes that have determined that the NIR has not been filled in, and whether the financial institution has adequate procedures and the efforts made to obtain this information.

However, if it is finally concluded that this situation constitutes a significant breach of the FATCA Agreement, and these errors are not remedied earlier that the IRS takes the appropriate measures, such as the withdrawal of the Financial Institution's Global Intermediary Identification Number (G IIN) with the IRS, from that moment on, the withholding of 30 per 100 will be applicable to payments from the US origin made to the financial institution.

In May 2021, the IRS (US Tax Administration Agency) published the frequently asked question Q6 Reporting, including a list of codes detailed below.

In January 2023, this frequently asked question has been modified by updating the aforementioned list of codes, which are also included in this FAQ.

Notwithstanding the details explained below, it should be taken into account that, with regard to the codes to be used to complete the TIN label:

Presentations will be accepted in 2023 using both the codes prior to the Notice 2023-11 (published in May 2021 FAQ 6 Reporting) and those updated after the Notice 2023-11 (published in January 2023 update FAQ 6 Reporting).
From 01/01/2024 only presentations with codes updated after Notice 2023-11 (published in January 2023 update FAQ 6 Reporting) will be accepted.

If the US TIN of the account holder or the person exercising control has not been obtained (Sub- stantal Owner), and this TIN is mandatory, can be used to fill in the TIN label the following numerical codes provided by the IRS , provided that any of the following circumstances occur:

1,2,1 Pre-existing accounts:

Pre-existing account of an individual whose indications of being an American are only the place of birth in the United States: "222222222"/"222-22-2222"/"22-2222222."

Pre-existing account of a legal or natural person whose indications of being an American are others other than the place of birth United States: "444444444"/"444-44-4444"/"44-4444444," And some of the following events also took place:
- There has been a change in circumstances that determines that the self-certification or other documentation initially obtained is considered incorrect or unreliable, and no new self-certification or other documentation has been obtained.
- The account initially did not exceed the filing threshold and subsequently exceeded it, and no self-certification or other documentation was obtained.
Specific cases for pre-existing accounts:
1. A pre-existing account of a legal entity with a balance of over $1,000,000 of which a foreign holder in FP has not obtained self-certification, and no US indications have been identified in relation to their controlling persons. "666666666"/"666-66-6666"/"66-6666666."
2. Pre-existing accounts that do not have the NIR and the account has been inactive or "durdile," but it remains above the reporting threshold, also known as "inactive accounts": "777777777"/"777-77-7777"/"77-7777777."
  
  As a reference, the United States defines "inactive account" in the US Treasury Regulation § 1,1471-4 (d) (6) (ii).

1,2,2 New Accounts:

New account of a natural person whose indications of being an American are the place of birth United States: "333333333"/"333-33-3333"/"33-3333333," And some of the following events also took place:
- There has been a change in circumstances that determines that the self-certification initially obtained when opening the account is considered incorrect or unreliable, and no new self-certification has been obtained.
- The account at the time of opening did not exceed the filing threshold and subsequently exceeded it, and no self-certification was obtained.

New account of a legal or natural person whose indications of being an American are others other than the place of birth United States: "555555555"/"555-55-5555"/"55-5555555," And some of the following events also took place:

There has been a change in circumstances that determines that the self-certification or other documentation initially obtained is considered incorrect or unreliable, and no new self-certification or other documentation has been obtained.
The account at the time of opening did not exceed the filing threshold and has subsequently exceeded it, and no self-certification or other documentation has been obtained.

The use of these numerical codes provided by the IRS does not exempt the entity from continuing to develop the efforts required to obtain the US TIN. For example, the account holder must be contacted annually to request the US TIN.

In any other case, the code AAAAAAAAA may be used.

In addition, the consignment of any of the above codes will not prevent the IRS from reporting an error, indicating that this value is invalid with respect to a certain record, given that the US TIN will remain unfilled.

New for 2023 and following years:

The IRS in its recent Notice (Notice 2023-11) offers flexibility to financial institutions, which have not been able to obtain the US TIN, in relation to certain pre-existing accounts that are US accounts subject to reporting, if the procedures indicated in this notification. (see questions What is the purpose of the Notice (Notice 2023-11) published by the IRS? applies to all types of accounts? and What obligations must a financial institution have to meet in order to benefit from the flexibility allowed by the notification (Notice 2023-11) published by the IRS? ).

In addition, the IRS updated the frequently asked Q 2023 Reporting in January 6, with the updated numerical codes to be completed on the TIN label.

Presentations will be accepted in 2023 using both the codes prior to the Notice 2023-11 (published in May 2021 FAQ 6 Reporting) and those updated after the Notice 2023-11 (published in January 2023 update FAQ 6 Reporting).
From 01/01/2024 only presentations with the codes updated after Notice 2023-11 (published in January 2023 update FAQ 6 Reporting) will be accepted, as detailed below.

Using these codes will allow the IRS to better understand the facts and circumstances underlying the lack of completion of the US TIN. The update of the TIN (US Tax ID) codes and their requirements and conditions are as follows:

1,2,1 Pre-existing accounts:

"222222222"/"222-22-2222"/"22-2222222": Pre-existing account of an individual whose indications of being an American are only the place of birth of the United States, other than an account declared with the code "000222111." This code is priority if any other code (other than 000222111) may also be applicable.
"000222111"/"000-22-2111"/"00-0222111": A pre-existing depository account for an individual whose indications of being an American are only the place of birth in the United States. In addition, the IF must determine that the account holder is a resident of the jurisdiction where the account is held for tax purposes and for the prevention of money laundering. As a reference, "Deposit account" is defined in the Agreement between the Kingdom of Spain and the United States of America (FATCA (BOE-A-2014-6854). This code is priority if any other code may also be applicable.
"444444444"/"444-44-4444"/"44-4444444": A pre-existing account of a legal or natural person whose indications of being an American are others other than the place of birth in the United States and also one of the following events:
- There has been a change in circumstances that has led to one or more US indications being associated with the account or that the self-certification or other documentation initially obtained is considered incorrect or unreliable, and no valid self-certification or other documentation has been obtained after the change of circumstances.
- The account did not exceed the threshold of the declaration at the date of the determination provided for in the Agreement between the Kingdom of Spain and the United States of America (FATCA) and developed in the Order for the creation of Form 290, and subsequently exceeded it, and no self-certification or other documentation has been obtained.
Specific cases for pre-existing accounts:
1. "666666666"/"666-66-6666"/"66-6666666: Pre-existing account of a legal person with a foreign enFP holder with one or more controlling persons with regard to which no self-certification has been obtained, and no US indications have been identified in relation to any of the controlling persons.
2. "777777777"/"777-77-7777"/"77-7777777": Pre-existing account inactive or "sleeping." This is a pre-existing account where there is no NIR and it has been inactive or "dormant," but it remains above the reporting threshold, also known as an "inactive" account. An "inactive account" is one that is in accordance with the definition established in the US Treasury Regulation § 1,1471-4 (d) (6) (ii) and has not had any financial activity for three years, except for the posting of interest. If several NIR codes may be applicable for an account, the other applicable code will be given priority.

1,2,2 New Accounts:

"333333333"/"333-33-3333"/"33-3333333": New account of a natural person whose indications of being an American are the place of birth in the United States, and there are also some of the following events:
- There has been a change in circumstances that determines that the self-certification initially obtained when opening the account is considered incorrect or unreliable, and no new self-certification has been obtained.
- The account at the time of opening did not exceed the filing threshold and subsequently exceeded it, and no self-certification was obtained.
"555555555"/"555-55-5555"/"55-5555555": New account of a legal or natural person whose indications of being an American are others other than the place of birth in the United States, and there are also some of the following events:
- There has been a change in circumstances that determines that the self-certification or other documentation initially obtained is considered incorrect or unreliable, and no new self-certification or other documentation has been obtained.
- The account at the time of opening did not exceed the filing threshold and has subsequently exceeded it, and no self-certification or other documentation has been obtained.

1,2,3 Other cases other than those mentioned above:

"999999999"/"999-99-9999"/"99-9999999": This code will be used for any account for which the IF cannot obtain the NIR and none of the other codes described above are applicable. The use of this code implies that the IF has completed its review of accounts without US TIN and has applied the TIN codes to the records in good faith when applicable.

The use of these numerical codes provided by the IRS does not exempt the entity from continuing to develop the efforts required to obtain the US TIN.

In addition, the consignment of any of the above codes will not prevent the IRS from reporting an error, indicating that this value is invalid with respect to a certain record, given that the US TIN will remain not duly filled in.

The notification of error will provide 120 days to correct incidents, in accordance with Article 5,1 "Minor errors and administrative errors" of the Agreement between the Kingdom of Spain and the United States of America (FATCA) (section 4,2,2 of the Competent Authorities Agreement between the United States and Spain). In line with the FATCA Agreement (and the ACC if applicable), if the NIR is not provided within 120 days , the United States will assess the data received (including whether the IF meets the conditions set out in Notice 2023-11) and whether it exists significant non-compliance based on facts and circumstances (see question Reporting FAQ # 3, which details the procedure for significant non-compliance).

If the type of account holder is FATCA101, FATCA102 or FATCA103 (XML AccountHolderType label), the account holder may not be U.S.

In this case, the non-US NIR must be filled in the XML "NIR" label in the format of the country that issued it, as well as the country that issued it in the "Issuedby" label.

In the case of account holder type FATCA104, the account holder is always in the USA.

We can therefore distinguish between the following cases:

In the case of the account holder, be a FATCA 101 or FATCA 102 legal entity. In this case, the account holder may not be U.S., but the person exercising the control must be (substantial owner)
- For the account holder when they are not U.S., they must complete the non-US TIN in the format of the country that issued it, as well as the country that issued it. If you do not have this information, you must complete the value "NA" as NIR (Not Available) and in the issuing country ES.
- For the person exercising control (substantial owner) , the US TIN must be filled in. If they do not have it, they can justify their absence with some of the numerical codes provided by the IRS, insofar as they incur any of the circumstances set by the IRS.
If the account holder is a legal entity FATCA103. In this case, the account holder may not be U.S. For the account holder, the non-US TIN must be completed in the format of the country that issued it, as well as the country that issued it. If you do not have this information, you must complete the NA value as NIR and in the country issuing ES.
If the account holder is a legal entity type FATCA104, the account holder's US TIN must be filled in. If they do not have it, they can justify their absence with some of the numerical codes provided by the IRS, insofar as they incur any of the circumstances classified by the IRS.

Reminder for the case of Cancellation Submission Messages. DocTypeIndic FATCA3:

It is important to indicate that the above is only applicable for records FATCA1, FATCA2 and FATCA4. The FATCA3 record must contain exactly the same data that was originally sent, otherwise an IRS notification will be received for non-identical deletion. Therefore, in the case of FATCA3, the NIR will be presented again in exactly the same way as it appears in the record that you want to delete.

You can obtain more information on the correct structure of the US TIN at the following link on the Tax Agency website:

Us TIN validations (NIF)

With regard to the date of birth of the account holder (or, if applicable, of the persons who exercise the control), if it is not completed by leaving this field blank, a warning message will be displayed indicating this circumstance, so that it can carry out the appropriate actions to try to obtain this information. This notification will be displayed regardless of whether or not the US TIN is completed.

With regard to investments marketed through a system of registration in global accounts on behalf of third parties, the provisions of section of that letter shall apply. Therefore, the investment fund will be considered a Spanish financial institution not obliged to communicate information if the requirements set out in Annex II to the Agreement are met, and the obligations corresponding to the trader to whose name these shares are registered are held.

With regard to the shares that are registered in the management company's register in the name of the participant, the provisions of section of this letter shall apply.

Yes. The obligation of the trader in this case is independent of whether the country where the collective foreign investment institution is established has signed or not a FATCA Agreement with the United States of America.

This type of entities should be included in the category of "Non-American Organisation other than a foreign Financial Institution" and due to its own nature it can be understood that they fulfil the requirements set out in subsection B.4.a) of Section VI of Appendix I of the Agreement, and therefore could be considered to be assets.

Both types of companies conduct insurance activity. Therefore, according to the provisions of Article 1.1 of the Agreement and of Article 2.3 of the Order, they shall be considered financial institutions (Specific Insurance Company) only in the case that they offer products that, according to the Agreement, could be considered insurance contracts with a cash value or an annuities contract, or if they are required to make payments in relation to said contracts.

Furthermore, and notwithstanding the provisions of letter q), Paragraph 1 Article 1 of the Agreement, Section I.C.2. of Appendix II of the Agreement states that mutual insurance companies whose members are all employees and whose protection partners or promoters are companies, institutions or sole proprietors in which they provide their services and the services they provide are only a result of insurance agreements among the former and that latter, that is, business mutual insurance companies, are considered Spanish financial institutions not required to communicate information, with the status or condition of exempt effective beneficiary. The foregoing can be considered applicable, mutatis mutandis, to voluntary social insurance organisations considered comparable.

As for the requirement to register, mutual insurance companies and voluntary social insurance organisations are not required to register with the US Tax Administration if they do not have the status of specific Insurance Company for the purposes of the Agreement, or if, despite having this status, meet the requirements to be considered Spanish financial institutions not required to communicate information based on what is stated in the previous paragraph.

With regard to EPSV pension plans, it should be considered that they are included in Paragraph C.1 Section I of Appendix II of the Agreement, with the status or condition of exempt effective beneficiary.

Section 6 of article 7 of the Order establishes that documentary evidence, the holder's declarations and other information used in the application of due diligence requirements must be made available to the Tax Administration.

For these purposes, the original, certified copy or photocopy may be retained (including a microfile, scanned copy or other similar electronic storage media).

Any documentation that is stored electronically must be made available to the Tax Administration in paper format.

The requirement states that the financial institution may not have a fixed place of business outside Spain. For this purpose, premises outside Spain that are used exclusively for administrative functions and are not advertised to clients are not considered a fixed place of business outside Spain.

An account whose exclusive ownership corresponds to a related flow will not be considered a financial account if the Spanish financial institution in which it is open has a copy of the will or death certificate of the deceased in its possession.

It can be considered that the partial exemption applicable to entities entails compliance with the requirement set out in subsection ii of section VI.B.4 (i) of Annex I to the FATCA Agreement between the USA and Spain.

These terms are defined in Article 1,1 (l) and (m). Of the Agreement, including both financial institutions obliged to communicate information and financial institutions not obliged to communicate information.

Therefore, the provisions of Section V.B of Annex I to the Agreement would also apply to financial institutions not obliged to communicate information as they are identified as such in Annex II or have such consideration in accordance with the applicable regulations of the jurisdiction in question.

With regard to pre-existing accounts held by a non-US entity other than a foreign financial institution, section 2.c) of the article 8 of Order HAP/1136/2014 establishes that the Spanish financial institution obliged to communicate information may choose to apply first any of the letters a), b) or c) of paragraph 4 of point D of section IV of Annex I to the Agreement.

Based on the above, the financial institution may first choose to reasonably determine that the account holder is a bank non-US, other than a foreign financial institution that is an active entity based on the information available to it or which it can access as it is public, in which case it does not have to carry out any of the actions provided for in Section IV.D 4, and does not take account of the consideration of an American account subject to information communication.

Alternatively, the financial institution can first determine that none of the people who exercise control is a citizen or tax resident of the States the United States of America, based on the information obtained and that it maintains in application of the procedures called know its customer in accordance with anti-money laundering legislation, in which case no other actions are required under Section IV.D 4 of Annex I to the Agreement, and the account is not an American account subject to information communication.

If the provisions of the two paragraphs above are not applicable, the financial institution must obtain a statement from the account holder certifying whether they have an active or passive status.

If a declaration is obtained from the holder certifying that the account holder has the status of active, the institution financial institutions do not have to carry out any other of the actions provided for in section 4 of point D of section IV of Annex I to the Agreement, and the account is not an American account subject to information communication.
If a declaration is obtained from the holder certifying that the entity that owns the account has the status of passive, the institution financial institutions must determine whether the persons exercising control over it are citizens or residents of the United States of America, based on the procedures called know your customer in accordance with anti-money laundering legislation, unless the account has a balance greater than 1,000,000 US dollars, in which case you must obtain a declaration from the account holder or the persons who exercise control of the account. If any of these cases determines that any of the persons exercising control is a citizen or resident of the United States of America, the account will be treated as an American account subject to information communication.

However, the procedures for reviewing the entity's pre-existing accounts must be completed within the deadlines set out in section IV of Annex I to the Agreement, which must be declared in form 290 corresponding to 2014 those accounts identified as such until 31 December 2014.

With regard to new accounts held by a non-US entity other than a foreign financial institution, based on the provisions of section V of Annex I to the Agreement, point B, the financial institution may reasonably determine that the account holder is a non-US entity other than a foreign financial institution that is an active entity based on the information available or to which it can access by be public, in which case you do not have to carry out any of the actions provided for in section C.2 of section V of Annex I, the account being not subject to information communication.

Otherwise, the financial institution must obtain a statement from the entity that owns the account in which its active or passive status is certified.

If a declaration is obtained from the holder certifying that the account holder has the status of active, the institution no other actions are required in section C.2, and the consideration of the US account subject to reporting.
If a declaration is obtained from the holder certifying that the entity that owns the account has the status of passive, the institution financial institutions must identify the persons who exercise control of the same by following the procedures known to their customers in accordance with the legislation against money laundering and must determine whether any of them is a citizen or tax resident of the United States of America, based on a declaration by the account holder or those of these persons.

If, based on the tax return obtained, it is determined that any of the persons exercising control is a citizen or tax resident of the United States, the account will be treated as an American account subject to reporting.

With regard to the new accounts opened between 1 July and 31 December 2014, if it cannot be determined that this is of an active entity in accordance with the provisions of the above and no declaration is obtained from the account holder or the persons exercising control , the financial institution must rely on the information obtained and maintain in application of the procedures called know its customer in accordance with the anti-money laundering legislation to determine whether the financial account is an American account subject to reporting. If, after filing form 290 corresponding to 2014, the financial institution obtained the declaration referred to in the previous paragraphs and determined according to its content that the account must have been included in form 290 or that the account declared was not an American account subject to communication for information, you must file a supplementary tax return for form 290 corresponding to that year 2014.

To calculate the balance or value of an account at the time immediately prior to its cancellation, the Financial Institution may choose to determine this balance or value within five working days following receipt of the account cancellation order or considering the balance as such or the most recent value that can be obtained once the account cancellation order has been received, which may be from the date prior to the account.

Yes. In accordance with Article 4 (3) of the Agreement, the fact that this information is not recorded in the financial institution's files does not alter the obligation to include the US account subject to information communication in Form 290.

No. The concept of sponsoring entity is defined in the regulations issued by the US Treasury, and has been incorporated, with the relevant modifications, in sections C and D of section II of Annex II to the Agreement, in relation to with those entities that, in compliance with the requirements set out in Annex II, assume compliance with the obligations derived from FATCA that correspond a sponsored investment entity, controlled foreign corporate or a sponsored, well-held company investment vehicle (sponsored investment entity, sponsored controlled foreign company or sponsored investment instrument with a small number of investors), which retain responsibility arising from possible breaches.

In any case, for the presentation of an informative tax return on behalf of a third party, the necessary representation must be accredited in accordance with the general rules established in the General Tax Law and its implementing regulations.

In section VI. C of Annex I, it is established that for the purpose of determining the balance or aggregate value of the accounts, the Spanish financial institution required to communicate information will be required to add all the account holders'accounts opened in the account or in the related entities, provided that the requirements set out in that section are met.

Therefore, for the purposes of applying the balance or value thresholds and determining whether it is a larger account, the financial institution must add (if the expected requirements are met) the balances of all the deposit accounts, the custody accounts, of insurance contracts with cash value, annual contracts and equity or debt securities of certain entities the holder of the same must keep open in that institution or in the entities linked to it.

However, some of the balance or value thresholds defined in point A of section II of Annex I to the Agreement relate to specific categories of financial accounts and therefore must be specifically applied to these categories. For example, if a Spanish financial institution obliged to communicate information maintains two pre-existing accounts whose holder is the same individual, one of them being a custody account with a balance or value of US $20,000 and the other being a deposit account with a balance of US $25,000 must add these balances in accordance with the aforementioned rules. If the financial institution opts for the application of the balance or value thresholds, it shall consider these accounts as not subject to review, identification or reporting of information since its aggregate balance does not exceed the limit set in point A of section II of Annex I to the Agreement. 1

If in the same case above the balance of the deposit account outside US $40,000, the balance or aggregate value of the account, together with that of the custody account, would exceed the previously expressed threshold. In this case, since the account would have a balance of less than US $50,000, it would be applicable to this type of account on threshold defined in number 4 of the aforementioned letter A of section II of Annex I, so only the custody account would be an account subject to review, identification or communication of information.

The third additional provision of Royal Decree 1021/2015 establishes, in relation to pre-existing accounts subject to reporting information under the established in the FATCA Agreement between the United States and Spain, the obligation of Spanish financial institutions to obtain the US Tax Code during 2017 of the persons who hold ownership or control of these accounts if they have not previously obtained it. If the Spanish financial institution has not complied with this obligation, it will NOT be considered as "significant breach" of a Spanish financial institution failure to comply with the obligation to obtain and communicate the US Tax ID number of pre-existing accounts subject to reporting, in relation to the years 2017, 2018 and 2019, provided that the following three obligations are met:　

The date of birth of the persons holding the ownership or control of these accounts whose US Tax ID has not been communicated is obtained and communicated;　
An annual requirement is made for these persons to provide the US Tax ID; and　
The Spanish financial institution searches its electronic files for US NIF (Personal Tax ID) pending, before filing form 290 for 2017.

For a sponsored entity or sponsored investment instrument to be considered as financial institutions not obliged to communicate information, it must be a sponsored investment entities, a sponsored controlled foreign company or a sponsored investment instrument with a small number of investors, as defined in the sections C and D of section II of Annex II to the Agreement and have agreed with a sponsor that the latter complies, on behalf of those, the obligations referred to in the aforementioned sections and in the terms indicated therein.

The IRS in its recent Notice (Notice 2023-11) offers a flexibility to financial institutions, which have not been able to obtain the US TIN, in relation to certain pre-existing accounts that are US accounts subject to information communication. The main purpose of Notice 2023-11 is that the lack of a declaration of the US TIN does not lead to the consideration that financial institutions have incurred significant breaches of their obligations under the FATCA Agreement. To do so, financial institutions must follow the procedures indicated in the Notice.

(See question What obligations should a financial institution have to meet in order to benefit from the flexibility allowed by the Notice (Notice 2023-11) published by the IRS?).

This flexibility is applicable to presentations made in 2023, 2024 and 2025.

For more information, please refer to the full contents of the Notice (Notice 2023-11) at the following link:

Foreign Financial Institution Temporary U.S. Taxpayer Identification Number Relief (irs.gov)

In accordance with the provisions of Sections 3,03 and 3,04 of Notice 2023-11, a financial institution may report a pre-existing account without US TIN and no significant breach will be established if it meets the following conditions:

Declares the date of birth of the natural person and controlling person of whom the US TIN has not been obtained.
It makes an annual request to the account holder, on any non-supplied NIR, with the conditions indicated below. To meet the annual requirement, the financial institution can choose the form of communication it deems most appropriate to contact the holder.

In the request or notification to the holder, the financial institution must necessarily include either of the following two contents:
- The IRS website address with the link to the IRS FAQs (https://travel.state.gov/content/travel/en/international-travel/while-abroad/Joint-Foreign-Account-Tax-Compliance-FATCA-FAQ.html)
- A copy of the previous FAQs and, or a copy of the IRS's flexible procedures for these citizens, or the following address for such procedures (https://www.irs.gov/individuals/international-taxpayers/relief-procedures-for-certain-former-citizens).
This obligation will start to be required for 2024 presentations.

In any case, the financial institution must keep records of the policies and procedures applied to comply with these annual requirements until the end of 2029.
It conducts an annual electronic search in its databases with regard to the missing US TIN. this obligation will start to be required for the 2024 presentations.
If the US TIN is not provided, the IRS explains the frequently asked Q6 Reporting (see question How is the TIN (US Tax ID) field completed when it is not available?).

It is noted that this notification does not prevent the competent US authority from finding significant non-compliance because it does not meet obligations other than those of obtaining and declaring the US TIN of pre-existing accounts.

For more information, please refer to the full contents of the Notice (Notice 2023-11) at the following link:

Foreign Financial Institution Temporary U.S. Taxpayer Identification Number Relief (irs.gov)

FAQs

What is the regulation applicable related to the Foreign Account Tax Compliance Act (FATCA)?

Which are the duties undertaken in the Agreement?

How is the duty to register complied with? What is the deadline for Spanish financial institutions to register?

Which organisations does section 2.2º of article 1 of the Order refer to?

Do third parties providing services referred to in Article 6 of the Order need to be financial institutions as defined in the Agreement and in the Order? What happens in the case of investment funds?

Which date must be taken as a reference to consider that an account is new? Does this date differ if the account belongs to an organisation?

What is the deadline for Spanish financial institutions to report information to carry out the procedures for reviewing pre-existing accounts established in Annex I to the Agreement?

On form 290, from which year must the American accounts subject to information communication be included which are identified in application of the revision procedures established in relation to pre-existing accounts?

What type of exchange should be applied to determine the balance or value of an account denominated in a currency other than the US dollar?

In the case of joint accounts in which only one of its holders is an American, which balance should be attributed to this holder for the purposes of applying the norms of appropriate diligence and declaring this account on form 290?

Is it possible to identify on form 290 an entity as a person who exerts control over a non-American entity, other than a financial institution, that has passive character?

In the case that the determination of the people who exert control over an organisation is carried out according to the percentage of stock in the capital or of voting rights, what percentage should be used for these purposes?

Regarding article B. 4. b) (2) of section II of appendix I of the Agreement, is any kind of documentary evidence of the ones defined in article D. section VI of the Agreement admissible to these effects?

How must the documentary evidence of article D. 1. of section VI of appendix I of the Agreement be understood?

In relation to those group life insurances for employees who are not included in section III of appendix II of the Agreement is there any alternative with regard to the norms of due diligence of identification and obtaining of documentation?

What entity should be notified with regard to the Global Intermediary Identification Number (GIIN) in cases of unit trust institutions that register for the sponsored investment entities scheme?

Revised In what cases is it mandatory to include in form 290 the date of birth of the holder of a pre-existing account?

Is it mandatory to complete the TIN field (US NIF)? What format is it? What are the consequences of not completing it?

Revised How is the NIR field completed (US NIF) when it is not available?

If the Account Holder Type is FACTA 101, FACTA 102, FACTA 103 or FATCA 104, what are the steps to follow to complete the TIN field (US Tax ID)?

How is the date of birth of the account holder completed?

How should article 11.1 c) of the Order be interpreted when stocks are marketed partially through a register system in global accounts by third parties?

With regard to article 11.2 of the Order, does marketer's duty withstand if the foreign unit trust institution is established in a country that has not signed a FACTA Agreement with the US?

Of the entities that the Agreement refers to, in which category fall the communities of property owners constituted in the scheme of horizontal property?

How are mutual insurance companies and voluntary social insurance organisations (EPSV) treated under FATCA? In which category of Appendix II of the Agreement are EPSV pension plans classified?

Is it obligatory to keep the originals of the holder's tax returns and of the documentary evidence?

How should the requirement set out in letter b) of point A.1 of section II of Appendix II of the Agreement be interpreted with regard to Small Financial Institutions with local clientele?

What treatment must be given to an account whose exclusive ownership corresponds to a deceased person's estate?

How is it determined whether a pre-existing account whose ownership corresponds to a non-U.S. institution different from a foreign financial institution is a U.S. account subject to reporting?

How must the Spanish financial institution obliged to communicate information proceed for the purpose of calculating the balance or value of an account at the moment immediately prior to its cancellation?

Must a pre-existing account which is an account subject to communication of information be included in form 290 when its holder's Tax Code (NIF) does not appear in the files of the declaring financial institution ?

Does the fact that an organisation submits form 290 in the name of third parties automatically convert it into a sponsoring entity of those third parties?

Are the rules for the aggregation of the balance or value of the accounts applied individually for each type of account or jointly in relation to all the accounts?

Is it possible that not obtaining during 2017 a US tax code not obtained previously can be considered a "serious breach" of the obligation set forth in article 2.2.a) of the FATCA Agreement?

When can a sponsored entity or sponsored investment instrument be considered as financial institutions that are not obliged to communicate information?

New What is the purpose of the Notice (Notice 2023-11) published by the IRS? Is it applicable to all types of accounts?

New What obligations should a financial institution have to meet in order to benefit from the flexibility allowed by the Notification (Notice 2023-11) published by the IRS?