FAQs

Entities that meet the requirements of the applicable regulations issued by the United States Treasury for consideration as an exempt beneficial owner, as an exempt foreign financial institution or as a foreign financial institution deemed compliant, which, by application of the Agreement, are not considered Spanish financial institutions required to report information.

With regard to shares marketed through a system of registration in global accounts on behalf of third parties, the provisions of section 2 of said letter shall apply. Therefore, the investment fund will be considered a Spanish financial institution not required to report information if the requirements set out in Annex II of the Agreement are met, with the obligations corresponding to the marketer in whose name the shares are registered.

With respect to the shares that are registered in the register of the managing entity in the name of the participant, the provisions of section 1 of said letter shall apply.

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.

In order for a sponsored entity or sponsored investment vehicle to qualify as a non-reporting financial institution, it must be a sponsored investment entity, a sponsored controlled foreign company or a sponsored investment vehicle with a small number of investors, as defined in paragraphs C and D of Section II of Annex II to the Agreement and have agreed with a sponsoring entity that the sponsoring entity will comply, on its behalf, with the obligations referred to in those paragraphs and on the terms set out therein.

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.