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AGREEMENT BETWEEN THE COMPETENT AUTHORITY OF THE UNITED STATES OF 

AMERICA AND THE COMPETENT AUTHORITY OF THE KINGDOM OF SPAIN TO 

UPDATE ANNEX II OF THE AGREEMENT BETWEEN THE UNITED STATES OF 

AMERICA AND THE KINGDOM OF SPAIN TO IMPROVE INTERNATIONAL TAX 

COMPLIANCE AND TO IMPLEMENT FATCA

Annex II of the Agreement between the United States of America and the Kingdom of Spain to 

Improve International Tax Compliance and to Implement FATCA, signed on May 14, 2013, (the 

“IGA”) provides: “This Annex II may be updated by a mutual agreement entered into between 

the Competent Authorities of Spain and the United States: (1) to include additional entities, 

accounts, and products that present a low risk of being used by U.S. Persons to evade U.S. tax 

and that have similar characteristics to the entities, accounts, and products identified in this 

Annex II as of the date of entry into force of the Agreement....” The Competent Authority of the 

United States of America and the Competent Authority of Spain (the “Competent Authorities”) 

hereby enter into the following agreement (the “Agreement”). Terms used in this Agreement 

that are not defined herein have the same meanings as in the IGA. 

1. The Competent Authorities agree to update Annex II of the IGA by adding new subsections

“C” and “D” to Section II (Deemed-Compliant Financial Institutions) of Annex II of the IGA

to include additional entities as Non-Reporting Spanish Financial Institutions that are treated 

as deemed-compliant FFIs for purposes of section 1471 of the Internal Revenue Code.

C. Sponsored Investment Entity and Controlled Foreign Corporation. A Financial 

Institution described in subparagraph C(1) or C(2) of this section having a sponsoring 

entity that complies with the requirements of subparagraph C(3) of this section. 

1. A Financial Institution is a sponsored investment entity if (a) it is an Investment 

Entity established in Spain that is not a qualified intermediary, withholding foreign 

partnership, or withholding foreign trust pursuant to relevant U.S. Treasury 

Regulations; and (b) an Entity has agreed with the Financial Institution to act as a 

sponsoring entity for the Financial Institution. 

2. A Financial Institution is a sponsored controlled foreign corporation if (a) the 

Financial Institution is a controlled foreign corporation1 organized under the laws of 

the Kingdom of Spain that is not a qualified intermediary, withholding foreign 

partnership, or withholding foreign trust pursuant to relevant U.S. Treasury 

1 A “controlled foreign corporation” means any foreign corporation if more than 50 percent of the total combined 

voting power of all classes of stock of such corporation entitled to vote, or the total value of the stock of such 

corporation, is owned, or is considered as owned, by “United States shareholders” on any day during the taxable 

year of such foreign corporation. The term a “United States shareholder” means, with respect to any foreign 

corporation, a United States person who owns, or is considered as owning, 10 percent or more of the total 

combined voting power of all classes of stock entitled to vote of such foreign corporation, or 10 percent or more 

of the total value of shares of all classes of stock of such foreign corporation.
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Regulations; (b) the Financial Institution is wholly owned, directly or indirectly, by a 

Reporting U.S. Financial Institution that agrees to act, or requires an affiliate of the 

Financial Institution to act, as a sponsoring entity for the Financial Institution; and (c) 

the Financial Institution shares a common electronic account system with the 

sponsoring entity that enables the sponsoring entity to identify all Account Holders 

and payees of the Financial Institution and to access all account and customer 

information maintained by the Financial Institution including, but not limited to, 

customer identification information, customer documentation, account balance, and 

all payments made to the Account Holder or payee. 

3. The sponsoring entity complies with the following requirements: 

a) The sponsoring entity is authorized to act on behalf of the Financial Institution 

(such as a fund manager, trustee, corporate director, or managing partner) to 

fulfill applicable registration requirements on the IRS FATCA registration 

website; 

b) The sponsoring entity has registered as a sponsoring entity with the IRS on the 

IRS FATCA registration website; 

c) If the sponsoring entity identifies any U.S. Reportable Accounts with respect to 

the Financial Institution, the sponsoring entity registers the Financial Institution

pursuant to applicable registration requirements on the IRS FATCA registration 

website on or before the date that is 90 days after such a U.S. Reportable Account 

is first identified; 

d) The sponsoring entity agrees to perform, on behalf of the Financial Institution, all 

due diligence, withholding, reporting, and other requirements that the Financial 

Institution would have been required to perform if it were a Reporting Spanish

Financial Institution; 

e) The sponsoring entity identifies the Financial Institution and includes the 

identifying number of the Financial Institution (obtained by following applicable 

registration requirements on the IRS FATCA registration website) in all reporting 

completed on the Financial Institution’s behalf; and 

f) The sponsoring entity has not had its status as a sponsor revoked.

D. Sponsored, Closely Held Investment Vehicle. A Spanish Financial Institution 

satisfying the following requirements:

1. The Financial Institution is a Financial Institution solely because it is an Investment 

Entity and is not a qualified intermediary, withholding foreign partnership, or 

withholding foreign trust pursuant to relevant U.S. Treasury Regulations; 
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2. The sponsoring entity is a Reporting U.S. Financial Institution, Reporting Model 1 

FFI2

, or Participating FFI3, is authorized to act on behalf of the Financial Institution 

(such as a professional manager, trustee, or managing partner), and agrees to perform, 

on behalf of the Financial Institution, all due diligence, withholding, reporting, and 

other requirements that the Financial Institution would have been required to perform 

if it were a Reporting Spanish Financial Institution; 

3. The Financial Institution does not hold itself out as an investment vehicle for 

unrelated parties; 

4. Twenty or fewer individuals own all of the debt interests and Equity Interests in the 

Financial Institution (disregarding debt interests owned by Participating FFIs and 

deemed-compliant FFIs and Equity Interests owned by an Entity if that Entity owns 

100 percent of the Equity Interests in the Financial Institution and is itself a sponsored 

Financial Institution described in this paragraph D); and

5. The sponsoring entity complies with the following requirements: 

a) The sponsoring entity has registered as a sponsoring entity with the IRS on the 

IRS FATCA registration website; 

b) The sponsoring entity agrees to perform, on behalf of the Financial Institution, all 

due diligence, withholding, reporting, and other requirements that the Financial 

Institution would have been required to perform if it were a Reporting Spanish

Financial Institution and retains documentation collected with respect to the 

Financial Institution for a period of six years; 

c) The sponsoring entity identifies the Financial Institution in all reporting 

completed on the Financial Institution’s behalf; and 

2 The term Reporting Model 1 FFI means a Financial Institution with respect to which a non-U.S. government or 

agency thereof agrees to obtain and exchange information pursuant to a Model 1 IGA, other than a Financial 

Institution treated as a Nonparticipating Financial Institution under the Model 1 IGA. For purposes of this definition, 

the term Model 1 IGA means an arrangement between the United States or the Treasury Department and a non-U.S. 

government or one or more agencies thereof to implement FATCA through reporting by Financial Institutions to 

such non-U.S. government or agency thereof, followed by automatic exchange of such reported information with the 

IRS.

3 The term Participating FFI means a Financial Institution that has agreed to comply with the requirements of an FFI 

Agreement, including a Financial Institution described in a Model 2 IGA that has agreed to comply with the 

requirements of an FFI Agreement. The term Participating FFI also includes a qualified intermediary branch of a 

Reporting U.S. Financial Institution, unless such branch is a Reporting Model 1 FFI. For purposes of this definition, 

the term FFI Agreement means an agreement that sets forth the requirements for a Financial Institution to be treated 

as complying with the requirements of section 1471(b) of the U.S. Internal Revenue Code. In addition, for purposes 

of this definition, the term Model 2 IGA means an arrangement between the United States or the Treasury 

Department and a non-U.S. government or one or more agencies thereof to facilitate the implementation of FATCA 

through reporting by Financial Institutions directly to the IRS in accordance with the requirements of an FFI 

Agreement, supplemented by the exchange of information between such non-U.S. government or agency thereof and 

the IRS.
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d) The sponsoring entity has not had its status as a sponsor revoked. 

2. The Competent Authority of the Kingdom of Spain shall update the guidance issued by 

the Spanish Tax Administration Agency regarding sponsored entities to incorporate the 

requirements for Sponsored Investment Entities and Controlled Foreign Corporations and 

Sponsored, Closely Held Investment Vehicles described in paragraph 1 of this 

Agreement.

3. If an entity has met the requirements of a sponsored entity described in the Spanish Tax 

Administration Agency’s guidance, including the requirements in the U.S. Treasury 

regulations incorporated into such guidance, at all relevant times prior to the date of this 

Agreement, the Competent Authority of the United States of America shall not determine 

that such entity is a Reporting Spanish Financial Institution that is in significant noncompliance with the IGA. For the avoidance of doubt, an entity has met the requirements 

described in the preceding sentence if, at all relevant times prior to the date of this 

Agreement, it is an entity that is eligible to be a sponsored investment entity under the 

U.S. Treasury regulations; the sponsoring entity performed, on behalf of the sponsored 

entity, all the due diligence, reporting, and other obligations that the sponsored entity 

would have been required to perform if it were a Reporting Spanish Financial Institution; 

and the sponsored entity and the sponsoring entity registered with the IRS.
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Signed in duplicate in the English and Spanish languages, both texts being equally authentic, on 

December 15, 2020.

For the Competent Authority of For the Competent Authority of

the United States of America: the Kingdom of Spain:

______________________________

Douglas W. O’Donnell Maria José Garde Garde

Commissioner, Large Business & Director General for Taxation

International, Internal Revenue Service Ministry of Finance

December 15, 2020 December 3, 2020

Date Date