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Agreement between the United States of America and the Portuguese Republic to 

Improve International Tax Compliance and to Implement FATCA

Whereas, the United States of America and the Portuguese Republic (each, a “Party,” and 

together, the “Parties”) desire to conclude an agreement to improve international tax 

compliance through mutual assistance in tax matters based on an effective infrastructure for 

the automatic exchange of information;

Whereas, Article 28 of the Convention between the United States of America and the

Portuguese Republic for the Avoidance of Double Taxation and the Prevention of Fiscal 

Evasion with Respect to Taxes on Income, together with a Related Protocol, done at 

Washington on September 6, 1994 (hereinafter referred to as the “Convention”) authorizes 

the exchange of information for tax purposes, including on an automatic basis;

Whereas, the United States of America enacted provisions commonly known as the Foreign 

Account Tax Compliance Act (“FATCA”), which introduce a reporting regime for financial 

institutions with respect to certain accounts;

Whereas, the Government of the Portuguese Republic is supportive of the underlying 

policy goal of FATCA to improve tax compliance;

Whereas, FATCA has raised a number of issues, including that Portuguese financial 

institutions may not be able to comply with certain aspects of FATCA due to domestic legal 

requirements;

Whereas, the Government of the United States of America collects information regarding 

certain accounts maintained by U.S. financial institutions held by residents of Portugal and 

is committed to exchanging such information with the Government of the Portuguese 

Republic and pursuing equivalent levels of exchange, provided that the appropriate 

safeguards and infrastructure for an effective exchange relationship are in place;

Whereas, an intergovernmental approach to FATCA implementation would address legal 

impediments and reduce burdens for Portuguese financial institutions;

Whereas, the Parties desire to conclude an agreement to improve international tax 

compliance and provide for the implementation of FATCA based on domestic reporting and 

reciprocal automatic exchange pursuant to the Convention, and subject to the 

confidentiality and other protections provided for therein, including the provisions limiting 

the use of the information exchanged under the Convention;

Now, therefore, the Parties have agreed as follows:
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Article 1

Definitions

1. For purposes of this agreement and any annexes thereto (“Agreement”), the 

following terms shall have the meanings set forth below:

a) The term “United States” means the United States of America, including 

the States thereof, and, when used in a geographical sense, means the 

territory of the United States of America, including inland waters, the air 

space, the territorial sea thereof and any maritime area beyond the territorial 

sea within which the United States may exercise sovereign rights or 

jurisdiction in accordance with international law; the term, however, does 

not include the U.S. Territories. Any reference to a “State” of the United 

States includes the District of Columbia.

b) The term “U.S. Territory” means American Samoa, the Commonwealth of 

the Northern Mariana Islands, Guam, the Commonwealth of Puerto Rico, or

the U.S. Virgin Islands.

c) The term “IRS” means the U.S. Internal Revenue Service.

d) The term “Portugal” means the Portuguese Republic, and when used in a 

geographical sense comprises the territory of the Portuguese Republic in 

accordance with the International Law and the Portuguese legislation, 

including its territorial sea, as well as those maritime areas adjacent to the 

outer limit of the territorial sea, comprising the seabed and subsoil thereof, 

over which the Portuguese Republic exercises sovereign rights or 

jurisdiction.

e) The term “Partner Jurisdiction” means a jurisdiction that has in effect an 

agreement with the United States to facilitate the implementation of FATCA. 

The IRS shall publish a list identifying all Partner Jurisdictions.

f) The term “Competent Authority” means:

(1) in the case of the United States, the Secretary of the Treasury or his 

delegate; and

(2) in the case of Portugal, the Minister of Finance, the Director General 

for Taxation and Customs Authority or their authorized 

representatives;

g) The term “Financial Institution” means a Custodial Institution, a 

Depository Institution, an Investment Entity, or a Specified Insurance 

Company.
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h) The term “Custodial Institution” means any Entity that holds, as a 

substantial portion of its business, financial assets for the account of others. 

An entity holds financial assets for the account of others as a substantial 

portion of its business if the entity’s gross income attributable to the holding 

of financial assets and related financial services equals or exceeds 20 percent 

of the entity’s gross income during the shorter of: (i) the three-year period 

that ends on December 31 (or the final day of a non-calendar year 

accounting period) prior to the year in which the determination is being 

made; or (ii) the period during which the entity has been in existence.

i) The term “Depository Institution” means any Entity that accepts deposits 

in the ordinary course of a banking or similar business. 

j) The term “Investment Entity” means any Entity that conducts as a business 

(or is managed by an entity that conducts as a business) one or more of the 

following activities or operations for or on behalf of a customer:

(1) trading in money market instruments (cheques, bills, certificates of 

deposit, derivatives, etc.); foreign exchange; exchange, interest rate 

and index instruments; transferable securities; or commodity futures 

trading;

(2) individual and collective portfolio management; or

(3) otherwise investing, administering, or managing funds or money on 

behalf of other persons.

This subparagraph 1(j) shall be interpreted in a manner consistent with 

similar language set forth in the definition of “financial institution” in the 

Financial Action Task Force Recommendations.

k) The term “Specified Insurance Company” means any Entity that is an 

insurance company (or the holding company of an insurance company) that 

issues, or is obligated to make payments with respect to, a Cash Value 

Insurance Contract or an Annuity Contract.

l) The term “Portuguese Financial Institution” means (i) any Financial 

Institution resident in Portugal, but excluding any branch of such Financial 

Institution that is located outside Portugal, and (ii) any branch of a Financial 

Institution not resident in Portugal, if such branch is located in Portugal.

m) The term “Partner Jurisdiction Financial Institution” means (i) any 

Financial Institution established in a Partner Jurisdiction, but excluding any 

branch of such Financial Institution that is located outside the Partner 
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Jurisdiction, and (ii) any branch of a Financial Institution not established in 

the Partner Jurisdiction, if such branch is located in the Partner Jurisdiction.

n) The term “Reporting Financial Institution” means a Reporting Portuguese 

Financial Institution or a Reporting U.S. Financial Institution, as the context 

requires.

o) The term “Reporting Portuguese Financial Institution” means any 

Portuguese Financial Institution that is not a Non-Reporting Portuguese 

Financial Institution.

p) The term “Reporting U.S. Financial Institution” means (i) any Financial 

Institution that is resident in the United States, but excluding any branch of 

such Financial Institution that is located outside the United States, and (ii)

any branch of a Financial Institution not resident in the United States, if such 

branch is located in the United States, provided that the Financial Institution 

or branch has control, receipt, or custody of income with respect to which 

information is required to be exchanged under subparagraph (2)(b) of Article 

2 of this Agreement.

q) The term “Non-Reporting Portuguese Financial Institution” means any 

Portuguese Financial Institution, or other Entity resident in Portugal that is 

described in Annex II as a Non-Reporting Portuguese Financial Institution 

or that otherwise qualifies as a deemed-compliant FFI or an exempt 

beneficial owner under relevant U.S. Treasury Regulations.

r) The term “Nonparticipating Financial Institution” means a 

nonparticipating FFI, as that term is defined in relevant U.S. Treasury 

Regulations, but does not include a Portuguese Financial Institution or other 

Partner Jurisdiction Financial Institution other than a Financial Institution 

treated as a Nonparticipating Financial Institution pursuant to subparagraph 

2(b) of Article 5 of this Agreement or the corresponding provision in an 

agreement between the United States and a Partner Jurisdiction.

s) The term “Financial Account” means an account maintained by a Financial 

Institution, and includes:

(1) in the case of an Entity that is a Financial Institution solely because it 

is an Investment Entity, any equity or debt interest (other than 

interests that are regularly traded on an established securities market) 

in the Financial Institution;

(2) in the case of a Financial Institution not described in subparagraph 

1(s)(1) of this Article, any equity or debt interest in the Financial 

Institution (other than interests that are regularly traded on an 
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established securities market), if (i) the value of the debt or equity 

interest is determined, directly or indirectly, primarily by reference to 

assets that give rise to U.S. Source Withholdable Payments, and (ii) 

the class of interests was established with a purpose of avoiding 

reporting in accordance with this Agreement; and

(3) any Cash Value Insurance Contract and any Annuity Contract issued 

or maintained by a Financial Institution, other than a noninvestmentlinked, nontransferable immediate life annuity that is issued to an 

individual and monetizes a pension or disability benefit provided 

under an account that is excluded from the definition of Financial 

Account in Annex II.

Notwithstanding the foregoing, the term “Financial Account” does not 

include any account that is excluded from the definition of Financial 

Account in Annex II. For purposes of this Agreement, interests are 

“regularly traded” if there is a meaningful volume of trading with respect to 

the interests on an ongoing basis, and an “established securities market” 

means an exchange that is officially recognized and supervised by a 

governmental authority in which the market is located and that has a 

meaningful annual value of shares traded on the exchange. For purposes of 

this subparagraph 1(s), an interest in a Financial Institution is not “regularly 

traded” and shall be treated as a Financial Account if the holder of the 

interest (other than a Financial Institution acting as an intermediary) is 

registered on the books of such Financial Institution. The preceding sentence 

will not apply to interests first registered on the books of such Financial 

Institution prior to July 1, 2014, and with respect to interests first registered 

on the books of such Financial Institution on or after July 1, 2014, a 

Financial Institution is not required to apply the preceding sentence prior to 

January 1, 2016.

t) The term “Depository Account” includes any commercial, checking, 

savings, time, or thrift account, or an account that is evidenced by a 

certificate of deposit, thrift certificate, investment certificate, certificate of 

indebtedness, or other similar instrument maintained by a Financial 

Institution in the ordinary course of a banking or similar business. A 

Depository Account also includes an amount held by an insurance company 

pursuant to a guaranteed investment contract or similar agreement to pay or 

credit interest thereon.

u) The term “Custodial Account” means an account (other than an Insurance 

Contract or Annuity Contract) for the benefit of another person that holds 

any financial instrument or contract held for investment (including, but not 

limited to, a share or stock in a corporation, a note, bond, debenture, or other 

evidence of indebtedness, a currency or commodity transaction, a credit 
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default swap, a swap based upon a nonfinancial index, a notional principal 

contract, an Insurance Contract or Annuity Contract, and any option or other 

derivative instrument).

v) The term “Equity Interest” means, in the case of a partnership that is a 

Financial Institution, either a capital or profits interest in the partnership. In 

the case of a trust that is a Financial Institution, an Equity Interest is 

considered to be held by any person treated as a settlor or beneficiary of all 

or a portion of the trust, or any other natural person exercising ultimate 

effective control over the trust. A Specified U.S. Person shall be treated as 

being a beneficiary of a foreign trust if such Specified U.S. Person has the 

right to receive directly or indirectly (for example, through a nominee) a 

mandatory distribution or may receive, directly or indirectly, a discretionary 

distribution from the trust. 

w) The term “Insurance Contract” means a contract (other than an Annuity 

Contract) under which the issuer agrees to pay an amount upon the 

occurrence of a specified contingency involving mortality, morbidity, 

accident, liability, or property risk.

x) The term “Annuity Contract” means a contract under which the issuer 

agrees to make payments for a period of time determined in whole or in part 

by reference to the life expectancy of one or more individuals. The term 

also includes a contract that is considered to be an Annuity Contract in 

accordance with the law, regulation, or practice of the jurisdiction in which 

the contract was issued, and under which the issuer agrees to make payments 

for a term of years. 

y) The term “Cash Value Insurance Contract” means an Insurance Contract 

(other than an indemnity reinsurance contract between two insurance 

companies) that has a Cash Value greater than $50,000.

z) The term “Cash Value” means the greater of (i) the amount that the 

policyholder is entitled to receive upon surrender or termination of the 

contract (determined without reduction for any surrender charge or policy 

loan), and (ii) the amount the policyholder can borrow under or with regard 

to the contract. Notwithstanding the foregoing, the term “Cash Value” does 

not include an amount payable under an Insurance Contract as: 

(1) a personal injury or sickness benefit or other benefit providing 

indemnification of an economic loss incurred upon the occurrence of 

the event insured against; 

(2) a refund to the policyholder of a previously paid premium under an 

Insurance Contract (other than under a life insurance contract) due to 
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policy cancellation or termination, decrease in risk exposure during 

the effective period of the Insurance Contract, or arising from a 

redetermination of the premium due to correction of posting or other 

similar error; or 

(3) a policyholder dividend based upon the underwriting experience of 

the contract or group involved.

aa) The term “Reportable Account” means a U.S. Reportable Account or a 

Portuguese Reportable Account, as the context requires.

bb) The term “Portuguese Reportable Account” means a Financial Account 

maintained by a Reporting U.S. Financial Institution if: (i) in the case of a 

Depository Account, the account is held by an individual resident in 

Portugal and more than $10 of interest is paid to such account in any given 

calendar year; or (ii) in the case of a Financial Account other than a 

Depository Account, the Account Holder is a resident of Portugal, including 

an Entity that certifies that it is resident in Portugal for tax purposes, with 

respect to which U.S. source income that is subject to reporting under 

chapter 3 of subtitle A or chapter 61 of subtitle F of the U.S. Internal 

Revenue Code is paid or credited.

cc) The term “U.S. Reportable Account” means a Financial Account 

maintained by a Reporting Portuguese Financial Institution and held by one 

or more Specified U.S. Persons or by a Non-U.S. Entity with one or more 

Controlling Persons that is a Specified U.S. Person. Notwithstanding the 

foregoing, an account shall not be treated as a U.S. Reportable Account if 

such account is not identified as a U.S. Reportable Account after application 

of the due diligence procedures in Annex I.

dd) The term “Account Holder” means the person listed or identified as the 

holder of a Financial Account by the Financial Institution that maintains the 

account. A person, other than a Financial Institution, holding a Financial 

Account for the benefit or account of another person as agent, custodian, 

nominee, signatory, investment advisor, or intermediary, is not treated as 

holding the account for purposes of this Agreement, and such other person is 

treated as holding the account. For purposes of the immediately preceding

sentence, the term “Financial Institution” does not include a Financial

Institution organized or incorporated in a U.S. Territory. In the case of a 

Cash Value Insurance Contract or an Annuity Contract, the Account Holder 

is any person entitled to access the Cash Value or change the beneficiary of 

the contract. If no person can access the Cash Value or change the 

beneficiary, the Account Holder is any person named as the owner in the 

contract and any person with a vested entitlement to payment under the 

terms of the contract. Upon the maturity of a Cash Value Insurance Contract 
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or an Annuity Contract, each person entitled to receive a payment under the 

contract is treated as an Account Holder.

ee) The term “U.S. Person” means a U.S. citizen or resident individual, a 

partnership or corporation organized in the United States or under the laws

of the United States or any State thereof, a trust if (i) a court within the 

United States would have authority under applicable law to render orders or 

judgments concerning substantially all issues regarding administration of the 

trust, and (ii) one or more U.S. persons have the authority to control all 

substantial decisions of the trust, or an estate of a decedent that is a citizen or 

resident of the United States. This subparagraph 1(ee) shall be interpreted in 

accordance with the U.S. Internal Revenue Code.

ff) The term “Specified U.S. Person” means a U.S. Person, other than: (i) a 

corporation the stock of which is regularly traded on one or more established 

securities markets; (ii) any corporation that is a member of the same 

expanded affiliated group, as defined in section 1471(e)(2) of the U.S. 

Internal Revenue Code, as a corporation described in clause (i); (iii) the 

United States or any wholly owned agency or instrumentality thereof; (iv) 

any State of the United States, any U.S. Territory, any political subdivision 

of any of the foregoing, or any wholly owned agency or instrumentality of 

any one or more of the foregoing; (v) any organization exempt from taxation 

under section 501(a) of the U.S. Internal Revenue Code or an individual 

retirement plan as defined in section 7701(a)(37) of the U.S. Internal 

Revenue Code; (vi) any bank as defined in section 581 of the U.S. Internal 

Revenue Code; (vii) any real estate investment trust as defined in section 

856 of the U.S. Internal Revenue Code; (viii) any regulated investment 

company as defined in section 851 of the U.S. Internal Revenue Code or any 

entity registered with the U.S. Securities and Exchange Commission under 

the Investment Company Act of 1940 (15 U.S.C. 80a-64); (ix) any common 

trust fund as defined in section 584(a) of the U.S. Internal Revenue Code; 

(x) any trust that is exempt from tax under section 664(c) of the U.S. Internal 

Revenue Code or that is described in section 4947(a)(1) of the U.S. Internal 

Revenue Code; (xi) a dealer in securities, commodities, or derivative 

financial instruments (including notional principal contracts, futures, 

forwards, and options) that is registered as such under the laws of the United 

States or any State; (xii) a broker as defined in section 6045(c) of the U.S. 

Internal Revenue Code; or (xiii) any tax-exempt trust under a plan that is 

described in section 403(b) or section 457(g) of the U.S. Internal Revenue 

Code.

gg) The term “Entity” means a legal person or a legal arrangement such as a 

trust. 
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hh) The term “Non-U.S. Entity” means an Entity that is not a U.S. Person.

ii) The term “U.S. Source Withholdable Payment” means any payment of 

interest (including any original issue discount), dividends, rents, salaries, 

wages, premiums, annuities, compensations, remunerations, emoluments, 

and other fixed or determinable annual or periodical gains, profits, and 

income, if such payment is from sources within the United States. 

Notwithstanding the foregoing, a U.S. Source Withholdable Payment does 

not include any payment that is not treated as a withholdable payment in 

relevant U.S. Treasury Regulations.

jj) An Entity is a “Related Entity” of another Entity if either Entity controls 

the other Entity, or the two Entities are under common control. For this 

purpose control includes direct or indirect ownership of more than 50 

percent of the vote or value in an Entity. Notwithstanding the foregoing, 

Portugal may treat an Entity as not a Related Entity of another Entity if the 

two Entities are not members of the same expanded affiliated group as 

defined in section 1471(e)(2) of the U.S. Internal Revenue Code.

kk) The term “U.S. TIN” means a U.S. federal taxpayer identifying number.

ll) The term “Portuguese TIN” means a Portuguese taxpayer identifying 

number.

mm) The term “Controlling Persons” means the natural persons who exercise 

control over an Entity. In the case of a trust, such term means the settlor, the 

trustees, the protector (if any), the beneficiaries or class of beneficiaries, and 

any other natural person exercising ultimate effective control over the trust, 

and in the case of a legal arrangement other than a trust, such term means 

persons in equivalent or similar positions. The term “Controlling Persons”

shall be interpreted in a manner consistent with the Financial Action Task 

Force Recommendations.

2. Any term not otherwise defined in this Agreement shall, unless the context 

otherwise requires or the Competent Authorities agree to a common meaning (as permitted 

by domestic law), have the meaning that it has at that time under the law of the Party 

applying this Agreement, any meaning under the applicable tax laws of that Party 

prevailing over a meaning given to the term under other laws of that Party.

Article 2

Obligations to Obtain and Exchange Information with Respect to Reportable 

Accounts

1. Subject to the provisions of Article 3 of this Agreement, each Party shall obtain the 
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information specified in paragraph 2 of this Article with respect to all Reportable Accounts 

and shall annually exchange this information with the other Party on an automatic basis 

pursuant to the provisions of Article 28 of the Convention.

2. The information to be obtained and exchanged is:

a) In the case of Portugal with respect to each U.S. Reportable Account of each 

Reporting Portuguese Financial Institution:

(1) the name, address, and U.S. TIN of each Specified U.S. Person that

is an Account Holder of such account and, in the case of a Non-U.S. 

Entity that, after application of the due diligence procedures set forth 

in Annex I, is identified as having one or more Controlling Persons 

that is a Specified U.S. Person, the name, address, and U.S. TIN (if

any) of such entity and each such Specified U.S. Person;

(2) the account number (or functional equivalent in the absence of an 

account number); 

(3) the name and identifying number of the Reporting Portuguese

Financial Institution;

(4) the account balance or value (including, in the case of a Cash Value 

Insurance Contract or Annuity Contract, the Cash Value or surrender 

value) as of the end of the relevant calendar year or other appropriate 

reporting period or, if the account was closed during such year, 

immediately before closure; 

(5) in the case of any Custodial Account: 

(A) the total gross amount of interest, the total gross amount of 

dividends, and the total gross amount of other income 

generated with respect to the assets held in the account, in 

each case paid or credited to the account (or with respect to 

the account) during the calendar year or other appropriate 

reporting period; and 

(B) the total gross proceeds from the sale or redemption of 

property paid or credited to the account during the calendar 

year or other appropriate reporting period with respect to 

which the Reporting Portuguese Financial Institution acted as 

a custodian, broker, nominee, or otherwise as an agent for the 

Account Holder; 

(6) in the case of any Depository Account, the total gross amount of 
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interest paid or credited to the account during the calendar year or 

other appropriate reporting period; and

(7) in the case of any account not described in subparagraph 2(a)(5) or 

2(a)(6) of this Article, the total gross amount paid or credited to the 

Account Holder with respect to the account during the calendar year 

or other appropriate reporting period with respect to which the 

Reporting Portuguese Financial Institution is the obligor or debtor, 

including the aggregate amount of any redemption payments made to 

the Account Holder during the calendar year or other appropriate 

reporting period.

b) In the case of the United States, with respect to each Portuguese Reportable 

Account of each Reporting U.S. Financial Institution:

(1) the name, address, and Portuguese TIN of any person that is a 

resident of Portugal and is an Account Holder of the account; 

(2) the account number (or the functional equivalent in the absence of an 

account number); 

(3) the name and identifying number of the Reporting U.S. Financial 

Institution;

(4) the gross amount of interest paid on a Depository Account;

(5) the gross amount of U.S. source dividends paid or credited to the 

account; and 

(6) the gross amount of other U.S. source income paid or credited to the 

account, to the extent subject to reporting under chapter 3 of subtitle 

A or chapter 61 of subtitle F of the U.S. Internal Revenue Code.

Article 3

Time and Manner of Exchange of Information

1. For purposes of the exchange obligation in Article 2 of this Agreement, the amount 

and characterization of payments made with respect to a U.S. Reportable Account may be

determined in accordance with the principles of the tax laws of Portugal, and the amount 

and characterization of payments made with respect to a Portuguese Reportable Account

may be determined in accordance with principles of U.S. federal income tax law. 

2. For purposes of the exchange obligation in Article 2 of this Agreement, the 

information exchanged shall identify the currency in which each relevant amount is 

denominated.
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3. With respect to paragraph 2 of Article 2 of this Agreement, information is to be

obtained and exchanged with respect to 2014 and all subsequent years, except that:

a) In the case of Portugal:

(1) the information to be obtained and exchanged with respect to 2014 is 

only the information described in subparagraphs 2(a)(1) through 

2(a)(4) of Article 2 of this Agreement; 

(2) the information to be obtained and exchanged with respect to 2015 is 

the information described in subparagraphs 2(a)(1) through 2(a)(7) of 

Article 2 of this Agreement, except for gross proceeds described in 

subparagraph 2(a)(5)(B) of Article 2 of this Agreement; and

(3) the information to be obtained and exchanged with respect to 2016 

and subsequent years is the information described in subparagraphs

2(a)(1) through 2(a)(7) of Article 2 of this Agreement;

b) In the case of the United States, the information to be obtained and 

exchanged with respect to 2014 and subsequent years is all of the 

information identified in subparagraph 2(b) of Article 2 of this Agreement. 

4. Notwithstanding paragraph 3 of this Article, with respect to each Reportable 

Account that is maintained by a Reporting Financial Institution as of June 30, 2014, and 

subject to paragraph 3 of Article 6 of this Agreement, the Parties are not required to obtain 

and include in the exchanged information the Portuguese TIN or the U.S. TIN, as 

applicable, of any relevant person if such taxpayer identifying number is not in the records 

of the Reporting Financial Institution. In such a case, the Parties shall obtain and include in 

the exchanged information the date of birth of the relevant person, if the Reporting 

Financial Institution has such date of birth in its records.

5. Subject to paragraphs 3 and 4 of this Article, the information described in Article 2 

of this Agreement shall be exchanged within nine months after the end of the calendar year 

to which the information relates. 

6. The Competent Authorities of Portugal and the United States shall enter into an 

agreement or arrangement under the mutual agreement procedure provided for in Article 27 

of the Convention, which shall:

a) establish the procedures for the automatic exchange obligations described in 

Article 2 of this Agreement;

b) prescribe rules and procedures as may be necessary to implement Article 5

of this Agreement; and
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c) establish as necessary procedures for the exchange of the information 

reported under subparagraph 1(b) of Article 4 of this Agreement.

7. All information exchanged shall be subject to the confidentiality and other 

protections provided for in the Convention, including the provisions limiting the use of the 

information exchanged.

8. Following entry into force of this Agreement, each Competent Authority shall 

provide written notification to the other Competent Authority when it is satisfied that the 

jurisdiction of the other Competent Authority has in place (i) appropriate safeguards to 

ensure that the information received pursuant to this Agreement shall remain confidential 

and be used solely for tax purposes, and (ii) the infrastructure for an effective exchange 

relationship (including established processes for ensuring timely, accurate, and confidential 

information exchanges, effective and reliable communications, and demonstrated 

capabilities to promptly resolve questions and concerns about exchanges or requests for 

exchanges and to administer the provisions of Article 5 of this Agreement). The 

Competent Authorities shall endeavor in good faith to meet, prior to September 2015, to 

establish that each jurisdiction has such safeguards and infrastructure in place.

9. The obligations of the Parties to obtain and exchange information under Article 2 of 

this Agreement shall take effect on the date of the later of the written notifications 

described in paragraph 8 of this Article. Notwithstanding the foregoing, if the Portuguese

Competent Authority is satisfied that the United States has the safeguards and infrastructure 

described in paragraph 8 of this Article in place, but additional time is necessary for the 

U.S. Competent Authority to establish that Portugal has such safeguards and infrastructure 

in place, the obligation of Portugal to obtain and exchange information under Article 2 of 

this Agreement shall take effect on the date of the written notification provided by the 

Portuguese Competent Authority to the U.S. Competent Authority pursuant to paragraph 8 

of this Article. 

10. This Agreement shall terminate 12 months following entry into force if Article 2 of 

this Agreement is not in effect for either Party pursuant to paragraph 9 of this Article by 

that date. 

Article 4

Application of FATCA to Portuguese Financial Institutions

1. Treatment of Reporting Portuguese Financial Institutions. Each Reporting 

Portuguese Financial Institution shall be treated as complying with, and not subject to 

withholding under, section 1471 of the U.S. Internal Revenue Code if Portugal complies 

with its obligations under Articles 2 and 3 of this Agreement with respect to such Reporting 

Portuguese Financial Institution, and the Reporting Portuguese Financial Institution:

a) identifies U.S. Reportable Accounts and reports annually to the Portuguese
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Competent Authority the information required to be reported in 

subparagraph 2(a) of Article 2 of this Agreement in the time and manner 

described in Article 3 of this Agreement;

b) for each of 2015 and 2016, reports annually to the Portuguese Competent 

Authority the name of each Nonparticipating Financial Institution to which 

it has made payments and the aggregate amount of such payments;

c) complies with the applicable registration requirements on the IRS FATCA 

registration website;

d) to the extent that a Reporting Portuguese Financial Institution is (i) acting as 

a qualified intermediary (for purposes of section 1441 of the U.S. Internal 

Revenue Code) that has elected to assume primary withholding 

responsibility under chapter 3 of subtitle A of the U.S. Internal Revenue 

Code, (ii) a foreign partnership that has elected to act as a withholding 

foreign partnership (for purposes of both sections 1441 and 1471 of the U.S. 

Internal Revenue Code), or (iii) a foreign trust that has elected to act as a 

withholding foreign trust (for purposes of both sections 1441 and 1471 of 

the U.S. Internal Revenue Code), withholds 30 percent of any U.S. Source 

Withholdable Payment to any Nonparticipating Financial Institution; and 

e) in the case of a Reporting Portuguese Financial Institution that is not 

described in subparagraph 1(d) of this Article and that makes a payment of, 

or acts as an intermediary with respect to, a U.S. Source Withholdable 

Payment to any Nonparticipating Financial Institution, the Reporting 

Portuguese Financial Institution provides to any immediate payor of such 

U.S. Source Withholdable Payment the information required for withholding 

and reporting to occur with respect to such payment.

Notwithstanding the foregoing, a Reporting Portuguese Financial Institution with respect to 

which the conditions of this paragraph 1 are not satisfied shall not be subject to withholding 

under section 1471 of the U.S. Internal Revenue Code unless such Reporting Portuguese

Financial Institution is treated by the IRS as a Nonparticipating Financial Institution 

pursuant to subparagraph 2(b) of Article 5 of this Agreement.

2. Suspension of Rules Relating to Recalcitrant Accounts. The United States shall

not require a Reporting Portuguese Financial Institution to withhold tax under section 1471 

or 1472 of the U.S. Internal Revenue Code with respect to an account held by a recalcitrant 

account holder (as defined in section 1471(d)(6) of the U.S. Internal Revenue Code), or to 

close such account, if the U.S. Competent Authority receives the information set forth in 

subparagraph 2(a) of Article 2 of this Agreement, subject to the provisions of Article 3 of 

this Agreement, with respect to such account.
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3. Specific Treatment of Portuguese Retirement Plans. The United States shall

treat as deemed-compliant FFIs or exempt beneficial owners, as appropriate, for purposes 

of sections 1471 and 1472 of the U.S. Internal Revenue Code, Portuguese retirement plans 

described in Annex II. For this purpose, a Portuguese retirement plan includes an Entity 

established or located in, and regulated by, Portugal, or a predetermined contractual or legal 

arrangement, operated to provide pension or retirement benefits or earn income for 

providing such benefits under the laws of Portugal and regulated with respect to 

contributions, distributions, reporting, sponsorship, and taxation. 

4. Identification and Treatment of Other Deemed-Compliant FFIs and Exempt 

Beneficial Owners. The United States shall treat each Non-Reporting Portuguese

Financial Institution as a deemed-compliant FFI or as an exempt beneficial owner, as 

appropriate, for purposes of section 1471 of the U.S. Internal Revenue Code. 

5. Special Rules Regarding Related Entities and Branches That Are 

Nonparticipating Financial Institutions. If a Portuguese Financial Institution, that 

otherwise meets the requirements described in paragraph 1 of this Article or is described in 

paragraph 3 or 4 of this Article, has a Related Entity or branch that operates in a jurisdiction 

that prevents such Related Entity or branch from fulfilling the requirements of a 

participating FFI or deemed-compliant FFI for purposes of section 1471 of the U.S. Internal 

Revenue Code or has a Related Entity or branch that is treated as a Nonparticipating 

Financial Institution solely due to the expiration of the transitional rule for limited FFIs and 

limited branches under relevant U.S. Treasury Regulations, such Portuguese Financial 

Institution shall continue to be in compliance with the terms of this Agreement and shall 

continue to be treated as a deemed-compliant FFI or exempt beneficial owner, as 

appropriate, for purposes of section 1471 of the U.S. Internal Revenue Code, provided that:

a) the Portuguese Financial Institution treats each such Related Entity or 

branch as a separate Nonparticipating Financial Institution for purposes of 

all the reporting and withholding requirements of this Agreement and each 

such Related Entity or branch identifies itself to withholding agents as a 

Nonparticipating Financial Institution;

b) each such Related Entity or branch identifies its U.S. accounts and reports 

the information with respect to those accounts as required under section 

1471 of the U.S. Internal Revenue Code to the extent permitted under the 

relevant laws pertaining to the Related Entity or branch; and

c) such Related Entity or branch does not specifically solicit U.S. accounts held 

by persons that are not resident in the jurisdiction where such Related Entity

or branch is located or accounts held by Nonparticipating Financial 

Institutions that are not established in the jurisdiction where such Related 

Entity or branch is located, and such Related Entity or branch is not used by 

the Portuguese Financial Institution or any other Related Entity to 

circumvent the obligations under this Agreement or under section 1471 of 
16

the U.S. Internal Revenue Code, as appropriate.

6. Coordination of Timing. Notwithstanding paragraphs 3 and 5 of Article 3 of this 

Agreement: 

a) Portugal shall not be obligated to obtain and exchange information with 

respect to a calendar year that is prior to the calendar year with respect to 

which similar information is required to be reported to the IRS by 

participating FFIs pursuant to relevant U.S. Treasury Regulations;

b) Portugal shall not be obligated to begin exchanging information prior to the 

date by which participating FFIs are required to report similar information to 

the IRS under relevant U.S. Treasury Regulations; 

c) the United States shall not be obligated to obtain and exchange information 

with respect to a calendar year that is prior to the first calendar year with 

respect to which Portugal is required to obtain and exchange information; 

and

d) the United States shall not be obligated to begin exchanging information 

prior to the date by which Portugal is required to begin exchanging 

information.

7. Coordination of Definitions with U.S. Treasury Regulations. Notwithstanding 

Article 1 of this Agreement and the definitions provided in the Annexes to this Agreement, 

in implementing this Agreement, Portugal may use, and may permit Portuguese Financial 

Institutions to use, a definition in relevant U.S. Treasury Regulations in lieu of a 

corresponding definition in this Agreement, provided that such application would not 

frustrate the purposes of this Agreement.

Article 5

Collaboration on Compliance and Enforcement

1. Minor and Administrative Errors. A Competent Authority shall notify the 

Competent Authority of the other Party when the first-mentioned Competent Authority has 

reason to believe that administrative errors or other minor errors may have led to incorrect 

or incomplete information reporting or resulted in other infringements of this Agreement. 

The Competent Authority of such other Party shall apply its domestic law (including 

applicable penalties) to obtain corrected and/or complete information or to resolve other 

infringements of this Agreement. 

2. Significant Non-Compliance.

a) A Competent Authority shall notify the Competent Authority of the other 
17

Party when the first-mentioned Competent Authority has determined that 

there is significant non-compliance with the obligations under this 

Agreement with respect to a Reporting Financial Institution in the other 

jurisdiction. The Competent Authority of such other Party shall apply its 

domestic law (including applicable penalties) to address the significant noncompliance described in the notice. 

b) If, in the case of a Reporting Portuguese Financial Institution, such 

enforcement actions do not resolve the non-compliance within a period of 18 

months after notification of significant non-compliance is first provided, the 

United States shall treat the Reporting Portuguese Financial Institution as a 

Nonparticipating Financial Institution pursuant to this subparagraph 2(b).

3. Reliance on Third Party Service Providers. Each Party may allow Reporting 

Financial Institutions to use third party service providers to fulfill the obligations imposed 

on such Reporting Financial Institutions by a Party, as contemplated in this Agreement, but 

these obligations shall remain the responsibility of the Reporting Financial Institutions.

4. Prevention of Avoidance. The Parties shall implement as necessary requirements 

to prevent Financial Institutions from adopting practices intended to circumvent the 

reporting required under this Agreement.

Article 6

Mutual Commitment to Continue to Enhance the Effectiveness of Information 

Exchange and Transparency

1. Reciprocity. The Government of the United States acknowledges the need to 

achieve equivalent levels of reciprocal automatic information exchange with Portugal. The 

Government of the United States is committed to further improve transparency and enhance 

the exchange relationship with Portugal by pursuing the adoption of regulations and 

advocating and supporting relevant legislation to achieve such equivalent levels of 

reciprocal automatic information exchange.

2. Treatment of Passthru Payments and Gross Proceeds. The Parties are 

committed to work together, along with Partner Jurisdictions, to develop a practical and 

effective alternative approach to achieve the policy objectives of foreign passthru payment 

and gross proceeds withholding that minimizes burden. 

3. Documentation of Accounts Maintained as of June 30, 2014. With respect to 

Reportable Accounts maintained by a Reporting Financial Institution as of June 30, 2014:

a) The United States commits to establish, by January 1, 2017, for reporting 

with respect to 2017 and subsequent years, rules requiring Reporting U.S. 

Financial Institutions to obtain and report the Portuguese TIN of each 
18

Account Holder of a Portuguese Reportable Account as required pursuant to 

subparagraph 2(b)(1) of Article 2 of this Agreement; and

b) Portugal commits to establish, by January 1, 2017, for reporting with respect 

to 2017 and subsequent years, rules requiring Reporting Portuguese

Financial Institutions to obtain the U.S. TIN of each Specified U.S. Person 

as required pursuant to subparagraph 2(a)(1) of Article 2 of this Agreement.

Article 7

Consistency in the Application of FATCA to Partner Jurisdictions

1. Portugal shall be granted the benefit of any more favorable terms under Article 4 or 

Annex I of this Agreement relating to the application of FATCA to Portuguese Financial 

Institutions afforded to another Partner Jurisdiction under a signed bilateral agreement 

pursuant to which the other Partner Jurisdiction commits to undertake the same obligations 

as Portugal described in Articles 2 and 3 of this Agreement, and subject to the same terms 

and conditions as described therein and in Articles 5 through 9 of this Agreement. 

2. The United States shall notify Portugal of any such more favorable terms, and such 

more favorable terms shall apply automatically under this Agreement as if such terms were 

specified in this Agreement and effective as of the date of the signing of the agreement 

incorporating the more favorable terms, unless Portugal declines in writing the application 

thereof.

Article 8

Consultations and Amendments

1. In case any difficulties in the implementation of this Agreement arise, either Party may 

request consultations to develop appropriate measures to ensure the fulfillment of this

Agreement.

2. This Agreement may be amended by written mutual agreement of the Parties. Unless 

otherwise agreed upon, such an amendment shall enter into force through the same 

procedures as set forth in paragraph 1 of Article 10 of this Agreement.

Article 9

Annexes

The Annexes form an integral part of this Agreement.
19

Article 10

Term of Agreement

1. This Agreement shall enter into force on the date of Portugal’s written notification 

to the United States that Portugal has completed its necessary internal procedures for entry 

into force of this Agreement. 

2. Either Party may terminate this Agreement by giving notice of termination in 

writing to the other Party. Such termination shall become effective on the first day of the 

month following the expiration of a period of 12 months after the date of the notice of 

termination.

3. The Parties shall, prior to December 31, 2016, consult in good faith to amend this 

Agreement as necessary to reflect progress on the commitments set forth in Article 6 of this 

Agreement.

In witness whereof, the undersigned, being duly authorized thereto by their respective 

Governments, have signed this Agreement.

Done at Lisbon, in duplicate, in the English and Portuguese languages, both texts being 

equally authentic, this sixth day of August, two thousand and fifteen.

For the United States of America For the Portuguese Republic 
1

ANNEX I

DUE DILIGENCE OBLIGATIONS FOR IDENTIFYING AND REPORTING ON U.S. 

REPORTABLE ACCOUNTS AND ON PAYMENTS TO CERTAIN 

NONPARTICIPATING FINANCIAL INSTITUTIONS

I. General.

 

A. Portugal shall require that Reporting Portuguese Financial Institutions apply the 

due diligence procedures contained in this Annex I to identify U.S. Reportable Accounts 

and accounts held by Nonparticipating Financial Institutions. 

B. For purposes of the Agreement,

1. All dollar amounts shall be read to include the equivalent in other 

currencies.

2. Except as otherwise provided herein, the balance or value of an account 

shall be determined as of the last day of the calendar year or other appropriate 

reporting period.

3. Where a balance or value threshold is to be determined as of June 30, 

2014 under this Annex I, the relevant balance or value shall be determined as of

that day or the last day of the reporting period ending immediately before June 

30, 2014, and where a balance or value threshold is to be determined as of the last 

day of a calendar year under this Annex I, the relevant balance or value shall be 

determined as of the last day of the reporting period that ends with or within that 

calendar year. 

4. Subject to subparagraph E(1) of section II of this Annex I, an account shall 

be treated as a U.S. Reportable Account beginning as of the date it is identified as 

such pursuant to the due diligence procedures in this Annex I.

5. Unless otherwise provided, information with respect to a U.S. Reportable 

Account shall be reported annually in the calendar year following the year to 

which the information relates.

 

C. As an alternative to the procedures described in each section of this Annex I, 

Portugal may permit Reporting Portuguese Financial Institutions to rely on the 

procedures described in relevant U.S. Treasury Regulations to establish whether an 

account is a U.S. Reportable Account or an account held by a Nonparticipating Financial 

Institution. Portugal may permit Reporting Portuguese Financial Institutions to make 

such election separately for each section of this Annex I either with respect to all relevant 

Financial Accounts or, separately, with respect to any clearly identified group of such 

accounts (such as by line of business or the location of where the account is maintained). 
2

II. Preexisting Individual Accounts. The following rules and procedures apply for 

purposes of identifying U.S. Reportable Accounts among Preexisting Accounts held by 

individuals (“Preexisting Individual Accounts”).

A. Accounts Not Required to Be Reviewed, Identified, or Reported. Unless the 

Reporting Portuguese Financial Institution elects otherwise, either with respect to all 

Preexisting Individual Accounts or, separately, with respect to any clearly identified 

group of such accounts, where the implementing rules in Portugal provide for such an 

election, the following Preexisting Individual Accounts are not required to be reviewed, 

identified, or reported as U.S. Reportable Accounts:

1. Subject to subparagraph E(2) of this section, a Preexisting Individual 

Account with a balance or value that does not exceed $50,000 as of June 30, 

2014.

2. Subject to subparagraph E(2) of this section, a Preexisting Individual 

Account that is a Cash Value Insurance Contract or an Annuity Contract with a 

balance or value of $250,000 or less as of June 30, 2014.

3. A Preexisting Individual Account that is a Cash Value Insurance Contract 

or an Annuity Contract, provided the law or regulations of Portugal or the United 

States effectively prevent the sale of such a Cash Value Insurance Contract or an 

Annuity Contract to U.S. residents (e.g., if the relevant Financial Institution does 

not have the required registration under U.S. law, and the law of Portugal requires 

reporting or withholding with respect to insurance products held by residents of 

Portugal).

4. A Depository Account with a balance of $50,000 or less.

B. Review Procedures for Preexisting Individual Accounts With a Balance or 

Value as of June 30, 2014, that Exceeds $50,000 ($250,000 for a Cash Value 

Insurance Contract or Annuity Contract), But Does Not Exceed $1,000,000 (“Lower 

Value Accounts”).

1. Electronic Record Search. The Reporting Portuguese Financial 

Institution must review electronically searchable data maintained by the 

Reporting Portuguese Financial Institution for any of the following U.S. indicia:

a) Identification of the Account Holder as a U.S. citizen or resident;

b) Unambiguous indication of a U.S. place of birth;

c) Current U.S. mailing or residence address (including a U.S. post 

office box);

d) Current U.S. telephone number;
3

e) Standing instructions to transfer funds to an account maintained in 

the United States;

f) Currently effective power of attorney or signatory authority 

granted to a person with a U.S. address; or

g) An “in-care-of” or “hold mail” address that is the sole address the 

Reporting Portuguese Financial Institution has on file for the Account 

Holder. In the case of a Preexisting Individual Account that is a Lower 

Value Account, an “in-care-of” address outside the United States or “hold 

mail” address shall not be treated as U.S. indicia. 

2. If none of the U.S. indicia listed in subparagraph B(1) of this section are 

discovered in the electronic search, then no further action is required until there is 

a change in circumstances that results in one or more U.S. indicia being 

associated with the account, or the account becomes a High Value Account 

described in paragraph D of this section.

3. If any of the U.S. indicia listed in subparagraph B(1) of this section are 

discovered in the electronic search, or if there is a change in circumstances that 

results in one or more U.S. indicia being associated with the account, then the 

Reporting Portuguese Financial Institution must treat the account as a U.S. 

Reportable Account unless it elects to apply subparagraph B(4) of this section and 

one of the exceptions in such subparagraph applies with respect to that account.

4. Notwithstanding a finding of U.S. indicia under subparagraph B(1) of this 

section, a Reporting Portuguese Financial Institution is not required to treat an 

account as a U.S. Reportable Account if:

a) Where the Account Holder information unambiguously indicates a 

U.S. place of birth, the Reporting Portuguese Financial Institution obtains,

or has previously reviewed and maintains a record of:

(1) A self-certification that the Account Holder is neither a 

U.S. citizen nor a U.S. resident for tax purposes (which may be on 

an IRS Form W-8 or other similar agreed form);

(2) A non-U.S. passport or other government-issued 

identification evidencing the Account Holder’s citizenship or 

nationality in a country other than the United States; and

(3) A copy of the Account Holder’s Certificate of Loss of 

Nationality of the United States or a reasonable explanation of: 

(a) The reason the Account Holder does not have such 

a certificate despite relinquishing U.S. citizenship; or
4

(b) The reason the Account Holder did not obtain U.S. 

citizenship at birth.

b) Where the Account Holder information contains a current U.S. 

mailing or residence address, or one or more U.S. telephone numbers 

that are the only telephone numbers associated with the account, the 

Reporting Portuguese Financial Institution obtains, or has previously 

reviewed and maintains a record of:

(1) A self-certification that the Account Holder is neither a 

U.S. citizen nor a U.S. resident for tax purposes (which may be on 

an IRS Form W-8 or other similar agreed form); and

(2) Documentary evidence, as defined in paragraph D of 

section VI of this Annex I, establishing the Account Holder’s nonU.S. status.

c) Where the Account Holder information contains standing 

instructions to transfer funds to an account maintained in the United 

States, the Reporting Portuguese Financial Institution obtains, or has 

previously reviewed and maintains a record of:

(1) A self-certification that the Account Holder is neither a 

U.S. citizen nor a U.S. resident for tax purposes (which may be on 

an IRS Form W-8 or other similar agreed form); and

(2) Documentary evidence, as defined in paragraph D of

section VI of this Annex I, establishing the Account Holder’s nonU.S. status.

d) Where the Account Holder information contains a currently 

effective power of attorney or signatory authority granted to a person 

with a U.S. address, has an “in-care-of” address or “hold mail” address 

that is the sole address identified for the Account Holder, or has one or 

more U.S. telephone numbers (if a non-U.S. telephone number is also 

associated with the account), the Reporting Portuguese Financial 

Institution obtains, or has previously reviewed and maintains a record of:

(1) A self-certification that the Account Holder is neither a 

U.S. citizen nor a U.S. resident for tax purposes (which may be on 

an IRS Form W-8 or other similar agreed form); or

(2) Documentary evidence, as defined in paragraph D of 

section VI of this Annex I, establishing the Account Holder’s nonU.S. status.
5

C. Additional Procedures Applicable to Preexisting Individual Accounts That 

Are Lower Value Accounts.

1. Review of Preexisting Individual Accounts that are Lower Value Accounts 

for U.S. indicia must be completed by June 30, 2016. 

2. If there is a change of circumstances with respect to a Preexisting 

Individual Account that is a Lower Value Account that results in one or more U.S. 

indicia described in subparagraph B(1) of this section being associated with the 

account, then the Reporting Portuguese Financial Institution must treat the 

account as a U.S. Reportable Account unless subparagraph B(4) of this section 

applies.

3. Except for Depository Accounts described in subparagraph A(4) of this 

section, any Preexisting Individual Account that has been identified as a U.S. 

Reportable Account under this section shall be treated as a U.S. Reportable 

Account in all subsequent years, unless the Account Holder ceases to be a 

Specified U.S. Person.

D. Enhanced Review Procedures for Preexisting Individual Accounts With a

Balance or Value That Exceeds $1,000,000 as of June 30, 2014, or December 31 of 

2015 or Any Subsequent Year (“High Value Accounts”).

1. Electronic Record Search. The Reporting Portuguese Financial 

Institution must review electronically searchable data maintained by the 

Reporting Portuguese Financial Institution for any of the U.S. indicia described in 

subparagraph B(1) of this section.

2. Paper Record Search. If the Reporting Portuguese Financial Institution’s 

electronically searchable databases include fields for, and capture all of the 

information described in, subparagraph D(3) of this section, then no further paper 

record search is required. If the electronic databases do not capture all of this 

information, then with respect to a High Value Account, the Reporting Portuguese 

Financial Institution must also review the current customer master file and, to the 

extent not contained in the current customer master file, the following documents 

associated with the account and obtained by the Reporting Portuguese Financial 

Institution within the last five years for any of the U.S. indicia described in 

subparagraph B(1) of this section:

a) The most recent documentary evidence collected with respect to 

the account;

b) The most recent account opening contract or documentation;

c) The most recent documentation obtained by the Reporting 

Portuguese Financial Institution pursuant to AML/KYC Procedures or for 

other regulatory purposes;
6

d) Any power of attorney or signature authority forms currently in 

effect; and

e) Any standing instructions to transfer funds currently in effect.

3. Exception Where Databases Contain Sufficient Information. A 

Reporting Portuguese Financial Institution is not required to perform the paper 

record search described in subparagraph D(2) of this section if the Reporting 

Portuguese Financial Institution’s electronically searchable information includes 

the following:

a) The Account Holder’s nationality or residence status;

b) The Account Holder’s residence address and mailing address 

currently on file with the Reporting Portuguese Financial Institution;

c) The Account Holder’s telephone number(s) currently on file, if 

any, with the Reporting Portuguese Financial Institution; 

d) Whether there are standing instructions to transfer funds in the 

account to another account (including an account at another branch of the 

Reporting Portuguese Financial Institution or another Financial 

Institution);

e) Whether there is a current “in-care-of” address or “hold mail” 

address for the Account Holder; and

f) Whether there is any power of attorney or signatory authority for 

the account. 

4. Relationship Manager Inquiry for Actual Knowledge. In addition to 

the electronic and paper record searches described above, the Reporting 

Portuguese Financial Institution must treat as a U.S. Reportable Account any High 

Value Account assigned to a relationship manager (including any Financial 

Accounts aggregated with such High Value Account) if the relationship manager 

has actual knowledge that the Account Holder is a Specified U.S. Person.

5. Effect of Finding U.S. Indicia.

a) If none of the U.S. indicia listed in subparagraph B(1) of this 

section are discovered in the enhanced review of High Value Accounts 

described above, and the account is not identified as held by a Specified 

U.S. Person in subparagraph D(4) of this section, then no further action is 

required until there is a change in circumstances that results in one or 

more U.S. indicia being associated with the account.
7

b) If any of the U.S. indicia listed in subparagraph B(1) of this section 

are discovered in the enhanced review of High Value Accounts described 

above, or if there is a subsequent change in circumstances that results in 

one or more U.S. indicia being associated with the account, then the 

Reporting Portuguese Financial Institution must treat the account as a U.S. 

Reportable Account unless it elects to apply subparagraph B(4) of this 

section and one of the exceptions in such subparagraph applies with 

respect to that account.

c) Except for Depository Accounts described in subparagraph A(4) of 

this section, any Preexisting Individual Account that has been identified as 

a U.S. Reportable Account under this section shall be treated as a U.S. 

Reportable Account in all subsequent years, unless the Account Holder

ceases to be a Specified U.S. Person. 

E. Additional Procedures Applicable to High Value Accounts.

1. If a Preexisting Individual Account is a High Value Account as of June 30, 

2014, the Reporting Portuguese Financial Institution must complete the enhanced 

review procedures described in paragraph D of this section with respect to such 

account by June 30, 2015. If based on this review such account is identified as a 

U.S. Reportable Account on or before December 31, 2014, the Reporting 

Portuguese Financial Institution must report the required information about such 

account with respect to 2014 in the first report on the account and on an annual 

basis thereafter. In the case of an account identified as a U.S. Reportable Account 

after December 31, 2014 and on or before June 30, 2015, the Reporting 

Portuguese Financial Institution is not required to report information about such 

account with respect to 2014, but must report information about the account on an 

annual basis thereafter.

2. If a Preexisting Individual Account is not a High Value Account as of June 

30, 2014, but becomes a High Value Account as of the last day of 2015 or any

subsequent calendar year, the Reporting Portuguese Financial Institution must 

complete the enhanced review procedures described in paragraph D of this section 

with respect to such account within six months after the last day of the calendar 

year in which the account becomes a High Value Account. If based on this review 

such account is identified as a U.S. Reportable Account, the Reporting Portuguese

Financial Institution must report the required information about such account with 

respect to the year in which it is identified as a U.S. Reportable Account and 

subsequent years on an annual basis, unless the Account Holder ceases to be a 

Specified U.S. Person.

3. Once a Reporting Portuguese Financial Institution applies the enhanced 

review procedures described in paragraph D of this section to a High Value 

Account, the Reporting Portuguese Financial Institution is not required to reapply such procedures, other than the relationship manager inquiry described in 

subparagraph D(4) of this section, to the same High Value Account in any 
8

subsequent year.

4. If there is a change of circumstances with respect to a High Value Account 

that results in one or more U.S. indicia described in subparagraph B(1) of this 

section being associated with the account, then the Reporting Portuguese

Financial Institution must treat the account as a U.S. Reportable Account unless it 

elects to apply subparagraph B(4) of this section and one of the exceptions in such 

subparagraph applies with respect to that account.

5. A Reporting Portuguese Financial Institution must implement procedures 

to ensure that a relationship manager identifies any change in circumstances of an 

account. For example, if a relationship manager is notified that the Account 

Holder has a new mailing address in the United States, the Reporting Portuguese

Financial Institution is required to treat the new address as a change in 

circumstances and, if it elects to apply subparagraph B(4) of this section, is

required to obtain the appropriate documentation from the Account Holder.

F. Preexisting Individual Accounts That Have Been Documented for Certain 

Other Purposes. A Reporting Portuguese Financial Institution that has previously 

obtained documentation from an Account Holder to establish the Account Holder’s status 

as neither a U.S. citizen nor a U.S. resident in order to meet its obligations under a 

qualified intermediary, withholding foreign partnership, or withholding foreign trust 

agreement with the IRS, or to fulfill its obligations under chapter 61 of Title 26 of the 

United States Code, is not required to perform the procedures described in subparagraph 

B(1) of this section with respect to Lower Value Accounts or subparagraphs D(1) through 

D(3) of this section with respect to High Value Accounts.

III. New Individual Accounts. The following rules and procedures apply for purposes of 

identifying U.S. Reportable Accounts among Financial Accounts held by individuals and opened 

on or after July 1, 2014 (“New Individual Accounts”).

A. Accounts Not Required to Be Reviewed, Identified, or Reported. Unless the 

Reporting Portuguese Financial Institution elects otherwise, either with respect to all New 

Individual Accounts or, separately, with respect to any clearly identified group of such 

accounts, where the implementing rules in Portugal provide for such an election, the 

following New Individual Accounts are not required to be reviewed, identified, or 

reported as U.S. Reportable Accounts:

1. A Depository Account unless the account balance exceeds $50,000 at the 

end of any calendar year or other appropriate reporting period. 

2. A Cash Value Insurance Contract unless the Cash Value exceeds $50,000

at the end of any calendar year or other appropriate reporting period. 

B. Other New Individual Accounts. With respect to New Individual Accounts not 

described in paragraph A of this section, upon account opening (or within 90 days after 

the end of the calendar year in which the account ceases to be described in paragraph A of 
9

this section), the Reporting Portuguese Financial Institution must obtain a selfcertification, which may be part of the account opening documentation, that allows the 

Reporting Portuguese Financial Institution to determine whether the Account Holder is 

resident in the United States for tax purposes (for this purpose, a U.S. citizen is 

considered to be resident in the United States for tax purposes, even if the Account 

Holder is also a tax resident of another jurisdiction) and confirm the reasonableness of 

such self-certification based on the information obtained by the Reporting Portuguese

Financial Institution in connection with the opening of the account, including any 

documentation collected pursuant to AML/KYC Procedures.

1. If the self-certification establishes that the Account Holder is resident in 

the United States for tax purposes, the Reporting Portuguese Financial Institution 

must treat the account as a U.S. Reportable Account and obtain a self-certification 

that includes the Account Holder’s U.S. TIN (which may be an IRS Form W-9 or 

other similar agreed form).

2. If there is a change of circumstances with respect to a New Individual 

Account that causes the Reporting Portuguese Financial Institution to know, or 

have reason to know, that the original self-certification is incorrect or unreliable, 

the Reporting Portuguese Financial Institution cannot rely on the original selfcertification and must obtain a valid self-certification that establishes whether the 

Account Holder is a U.S. citizen or resident for U.S. tax purposes. If the 

Reporting Portuguese Financial Institution is unable to obtain a valid selfcertification, the Reporting Portuguese Financial Institution must treat the account 

as a U.S. Reportable Account.

IV. Preexisting Entity Accounts. The following rules and procedures apply for purposes of 

identifying U.S. Reportable Accounts and accounts held by Nonparticipating Financial 

Institutions among Preexisting Accounts held by Entities (“Preexisting Entity Accounts”).

A. Entity Accounts Not Required to Be Reviewed, Identified or Reported. 

Unless the Reporting Portuguese Financial Institution elects otherwise, either with 

respect to all Preexisting Entity Accounts or, separately, with respect to any clearly 

identified group of such accounts, where the implementing rules in Portugal provide for 

such an election, a Preexisting Entity Account with an account balance or value that does

not exceed $250,000 as of June 30, 2014, is not required to be reviewed, identified, or 

reported as a U.S. Reportable Account until the account balance or value exceeds 

$1,000,000.

 

B. Entity Accounts Subject to Review. A Preexisting Entity Account that has an 

account balance or value that exceeds $250,000 as of June 30, 2014, and a Preexisting 

Entity Account that does not exceed $250,000 as of June 30, 2014 but the account 

balance or value of which exceeds $1,000,000 as of the last day of 2015 or any 

subsequent calendar year, must be reviewed in accordance with the procedures set forth 

in paragraph D of this section. 

C. Entity Accounts With Respect to Which Reporting Is Required. With respect 
10

to Preexisting Entity Accounts described in paragraph B of this section, only accounts 

that are held by one or more Entities that are Specified U.S. Persons, or by Passive 

NFFEs with one or more Controlling Persons who are U.S. citizens or residents, shall be 

treated as U.S. Reportable Accounts. In addition, accounts held by Nonparticipating 

Financial Institutions shall be treated as accounts for which aggregate payments as 

described in subparagraph 1(b) of Article 4 of the Agreement are reported to the

Portuguese Competent Authority.

D. Review Procedures for Identifying Entity Accounts With Respect to Which 

Reporting Is Required. For Preexisting Entity Accounts described in paragraph B of 

this section, the Reporting Portuguese Financial Institution must apply the following 

review procedures to determine whether the account is held by one or more Specified 

U.S. Persons, by Passive NFFEs with one or more Controlling Persons who are U.S. 

citizens or residents, or by Nonparticipating Financial Institutions:

1. Determine Whether the Entity Is a Specified U.S. Person.

a) Review information maintained for regulatory or customer 

relationship purposes (including information collected pursuant to 

AML/KYC Procedures) to determine whether the information indicates 

that the Account Holder is a U.S. Person. For this purpose, information 

indicating that the Account Holder is a U.S. Person includes a U.S. place 

of incorporation or organization, or a U.S. address.

b) If the information indicates that the Account Holder is a U.S. 

Person, the Reporting Portuguese Financial Institution must treat the 

account as a U.S. Reportable Account unless it obtains a self-certification 

from the Account Holder (which may be on an IRS Form W-8 or W-9, or 

a similar agreed form), or reasonably determines based on information in 

its possession or that is publicly available, that the Account Holder is not a 

Specified U.S. Person.

2. Determine Whether a Non-U.S. Entity Is a Financial Institution.

a) Review information maintained for regulatory or customer 

relationship purposes (including information collected pursuant to 

AML/KYC Procedures) to determine whether the information indicates 

that the Account Holder is a Financial Institution.

b) If the information indicates that the Account Holder is a Financial 

Institution, or the Reporting Portuguese Financial Institution verifies the 

Account Holder’s Global Intermediary Identification Number on the 

published IRS FFI list, then the account is not a U.S. Reportable Account. 

3. Determine Whether a Financial Institution Is a Nonparticipating 

Financial Institution Payments to Which Are Subject to Aggregate Reporting 

Under Subparagraph 1(b) of Article 4 of the Agreement.
11

a) Subject to subparagraph D(3)(b) of this section, a Reporting 

Portuguese Financial Institution may determine that the Account Holder is 

a Portuguese Financial Institution or other Partner Jurisdiction Financial 

Institution if the Reporting Portuguese Financial Institution reasonably 

determines that the Account Holder has such status on the basis of the 

Account Holder’s Global Intermediary Identification Number on the 

published IRS FFI list or other information that is publicly available or in 

the possession of the Reporting Portuguese Financial Institution, as 

applicable. In such case, no further review, identification, or reporting is 

required with respect to the account.

b) If the Account Holder is a Portuguese Financial Institution or other 

Partner Jurisdiction Financial Institution treated by the IRS as a 

Nonparticipating Financial Institution, then the account is not a U.S. 

Reportable Account, but payments to the Account Holder must be reported 

as contemplated in subparagraph 1(b) of Article 4 of the Agreement.

c) If the Account Holder is not a Portuguese Financial Institution or 

other Partner Jurisdiction Financial Institution, then the Reporting 

Portuguese Financial Institution must treat the Account Holder as a 

Nonparticipating Financial Institution payments to which are reportable 

under subparagraph 1(b) of Article 4 of the Agreement, unless the 

Reporting Portuguese Financial Institution:

(1) Obtains a self-certification (which may be on an IRS Form 

W-8 or similar agreed form) from the Account Holder that it is a 

certified deemed-compliant FFI, or an exempt beneficial owner, as 

those terms are defined in relevant U.S. Treasury Regulations; or

(2) In the case of a participating FFI or registered deemedcompliant FFI, verifies the Account Holder’s Global Intermediary 

Identification Number on the published IRS FFI list.

4. Determine Whether an Account Held by an NFFE Is a U.S. 

Reportable Account. With respect to an Account Holder of a Preexisting Entity 

Account that is not identified as either a U.S. Person or a Financial Institution, the 

Reporting Portuguese Financial Institution must identify (i) whether the Account 

Holder has Controlling Persons, (ii) whether the Account Holder is a Passive 

NFFE, and (iii) whether any of the Controlling Persons of the Account Holder is a 

U.S. citizen or resident. In making these determinations the Reporting Portuguese

Financial Institution must follow the guidance in subparagraphs D(4)(a) through 

D(4)(d) of this section in the order most appropriate under the circumstances.

a) For purposes of determining the Controlling Persons of an Account 

Holder, a Reporting Portuguese Financial Institution may rely on 

information collected and maintained pursuant to AML/KYC Procedures.
12

b) For purposes of determining whether the Account Holder is a 

Passive NFFE, the Reporting Portuguese Financial Institution must obtain 

a self-certification (which may be on an IRS Form W-8 or W-9, or on a 

similar agreed form) from the Account Holder to establish its status, unless 

it has information in its possession or that is publicly available, based on 

which it can reasonably determine that the Account Holder is an Active 

NFFE.

c) For purposes of determining whether a Controlling Person of a 

Passive NFFE is a U.S. citizen or resident for tax purposes, a Reporting 

Portuguese Financial Institution may rely on: 

(1) Information collected and maintained pursuant to 

AML/KYC Procedures in the case of a Preexisting Entity Account 

held by one or more NFFEs with an account balance or value that 

does not exceed $1,000,000; or

(2) A self-certification (which may be on an IRS Form W-8 or 

W-9, or on a similar agreed form) from the Account Holder or such 

Controlling Person in the case of a Preexisting Entity Account held 

by one or more NFFEs with an account balance or value that 

exceeds $1,000,000. 

d) If any Controlling Person of a Passive NFFE is a U.S. citizen or 

resident, the account shall be treated as a U.S. Reportable Account.

E. Timing of Review and Additional Procedures Applicable to Preexisting 

Entity Accounts.

1. Review of Preexisting Entity Accounts with an account balance or value 

that exceeds $250,000 as of June 30, 2014 must be completed by June 30, 2016.

2. Review of Preexisting Entity Accounts with an account balance or value 

that does not exceed $250,000 as of June 30, 2014, but exceeds $1,000,000 as of 

December 31 of 2015 or any subsequent year, must be completed within six 

months after the last day of the calendar year in which the account balance or 

value exceeds $1,000,000.

3. If there is a change of circumstances with respect to a Preexisting Entity 

Account that causes the Reporting Portuguese Financial Institution to know, or 

have reason to know, that the self-certification or other documentation associated 

with an account is incorrect or unreliable, the Reporting Portuguese Financial 

Institution must redetermine the status of the account in accordance with the 

procedures set forth in paragraph D of this section.

V. New Entity Accounts. The following rules and procedures apply for purposes of 
13

identifying U.S. Reportable Accounts and accounts held by Nonparticipating Financial 

Institutions among Financial Accounts held by Entities and opened on or after July 1, 2014 

(“New Entity Accounts”). 

A. Entity Accounts Not Required to Be Reviewed, Identified or Reported. 

Unless the Reporting Portuguese Financial Institution elects otherwise, either with respect 

to all New Entity Accounts or, separately, with respect to any clearly identified group of 

such accounts, where the implementing rules in Portugal provide for such election, a 

credit card account or a revolving credit facility treated as a New Entity Account is not 

required to be reviewed, identified, or reported, provided that the Reporting Portuguese

Financial Institution maintaining such account implements policies and procedures to 

prevent an account balance owed to the Account Holder that exceeds $50,000.

B. Other New Entity Accounts. With respect to New Entity Accounts not described 

in paragraph A of this section, the Reporting Portuguese Financial Institution must 

determine whether the Account Holder is: (i) a Specified U.S. Person; (ii) a Portuguese

Financial Institution or other Partner Jurisdiction Financial Institution; (iii) a participating 

FFI, a deemed-compliant FFI, or an exempt beneficial owner, as those terms are defined 

in relevant U.S. Treasury Regulations; or (iv) an Active NFFE or Passive NFFE. 

1. Subject to subparagraph B(2) of this section, a Reporting Portuguese

Financial Institution may determine that the Account Holder is an Active NFFE, a 

Portuguese Financial Institution, or other Partner Jurisdiction Financial Institution

if the Reporting Portuguese Financial Institution reasonably determines that the 

Account Holder has such status on the basis of the Account Holder’s Global 

Intermediary Identification Number or other information that is publicly available 

or in the possession of the Reporting Portuguese Financial Institution, as 

applicable. 

2. If the Account Holder is a Portuguese Financial Institution or other Partner 

Jurisdiction Financial Institution treated by the IRS as a Nonparticipating 

Financial Institution, then the account is not a U.S. Reportable Account, but 

payments to the Account Holder must be reported as contemplated in 

subparagraph 1(b) of Article 4 of the Agreement.

3. In all other cases, a Reporting Portuguese Financial Institution must obtain 

a self-certification from the Account Holder to establish the Account Holder’s 

status. Based on the self-certification, the following rules apply:

 

a) If the Account Holder is a Specified U.S. Person, the Reporting 

Portuguese Financial Institution must treat the account as a U.S. 

Reportable Account.

b) If the Account Holder is a Passive NFFE, the Reporting 

Portuguese Financial Institution must identify the Controlling Persons as 

determined under AML/KYC Procedures, and must determine whether 

any such person is a U.S. citizen or resident on the basis of a self-
14

certification from the Account Holder or such person. If any such person 

is a U.S. citizen or resident, the Reporting Portuguese Financial Institution 

must treat the account as a U.S. Reportable Account.

c) If the Account Holder is: (i) a U.S. Person that is not a Specified 

U.S. Person; (ii) subject to subparagraph B(3)(d) of this section, a 

Portuguese Financial Institution or other Partner Jurisdiction Financial 

Institution; (iii) a participating FFI, a deemed-compliant FFI, or an exempt 

beneficial owner, as those terms are defined in relevant U.S. Treasury 

Regulations; (iv) an Active NFFE; or (v) a Passive NFFE none of the 

Controlling Persons of which is a U.S. citizen or resident, then the account 

is not a U.S. Reportable Account, and no reporting is required with respect 

to the account.

d) If the Account Holder is a Nonparticipating Financial Institution 

(including a Portuguese Financial Institution or other Partner Jurisdiction 

Financial Institution treated by the IRS as a Nonparticipating Financial 

Institution), then the account is not a U.S. Reportable Account, but 

payments to the Account Holder must be reported as contemplated in 

subparagraph 1(b) of Article 4 of the Agreement.

VI. Special Rules and Definitions. The following additional rules and definitions apply in 

implementing the due diligence procedures described above:

A. Reliance on Self-Certifications and Documentary Evidence. A Reporting 

Portuguese Financial Institution may not rely on a self-certification or documentary 

evidence if the Reporting Portuguese Financial Institution knows or has reason to know 

that the self-certification or documentary evidence is incorrect or unreliable.

B. Definitions. The following definitions apply for purposes of this Annex I.

1. AML/KYC Procedures. “AML/KYC Procedures” means the customer due 

diligence procedures of a Reporting Portuguese Financial Institution pursuant 

to the anti-money laundering or similar requirements of Portugal to which 

such Reporting Portuguese Financial Institution is subject. 

2. NFFE. An “NFFE” means any Non-U.S. Entity that is not an FFI as defined 

in relevant U.S. Treasury Regulations or is an Entity described in 

subparagraph B(4)(j) of this section, and also includes any Non-U.S. Entity 

that is established in Portugal or another Partner Jurisdiction and that is not a 

Financial Institution.

3. Passive NFFE. A “Passive NFFE” means any NFFE that is not (i) an Active 

NFFE, or (ii) a withholding foreign partnership or withholding foreign trust 

pursuant to relevant U.S. Treasury Regulations.
15

4. Active NFFE. An “Active NFFE” means any NFFE that meets any of the 

following criteria:

a) Less than 50 percent of the NFFE’s gross income for the preceding 

calendar year or other appropriate reporting period is passive income 

and less than 50 percent of the assets held by the NFFE during the 

preceding calendar year or other appropriate reporting period are 

assets that produce or are held for the production of passive income;

b) The stock of the NFFE is regularly traded on an established securities 

market or the NFFE is a Related Entity of an Entity the stock of which 

is regularly traded on an established securities market;

c) The NFFE is organized in a U.S. Territory and all of the owners of the 

payee are bona fide residents of that U.S. Territory;

d) The NFFE is a government (other than the U.S. government), a 

political subdivision of such government (which, for the avoidance of 

doubt, includes a state, province, county, or municipality), or a public 

body performing a function of such government or a political 

subdivision thereof, a government of a U.S. Territory, an international 

organization, a non-U.S. central bank of issue, or an Entity wholly 

owned by one or more of the foregoing; 

e) Substantially all of the activities of the NFFE consist of holding (in 

whole or in part) the outstanding stock of, or providing financing and 

services to, one or more subsidiaries that engage in trades or 

businesses other than the business of a Financial Institution, except 

that an entity shall not qualify for NFFE status if the entity functions 

(or holds itself out) as an investment fund, such as a private equity 

fund, venture capital fund, leveraged buyout fund, or any investment 

vehicle whose purpose is to acquire or fund companies and then hold 

interests in those companies as capital assets for investment purposes;

f) The NFFE is not yet operating a business and has no prior operating 

history, but is investing capital into assets with the intent to operate a 

business other than that of a Financial Institution, provided that the 

NFFE shall not qualify for this exception after the date that is 24 

months after the date of the initial organization of the NFFE;

g) The NFFE was not a Financial Institution in the past five years, and is 

in the process of liquidating its assets or is reorganizing with the intent 

to continue or recommence operations in a business other than that of a 

Financial Institution;

h) The NFFE primarily engages in financing and hedging transactions 

with, or for, Related Entities that are not Financial Institutions, and 
16

does not provide financing or hedging services to any Entity that is not 

a Related Entity, provided that the group of any such Related Entities 

is primarily engaged in a business other than that of a Financial 

Institution;

i) The NFFE is an “excepted NFFE” as described in relevant U.S. Treasury 

Regulations; or

j) The NFFE meets all of the following requirements:

i. It is established and operated in its jurisdiction of residence 

exclusively for religious, charitable, scientific, artistic, cultural, 

athletic, or educational purposes; or it is established and operated 

in its jurisdiction of residence and it is a professional 

organization, business league, chamber of commerce, labor 

organization, agricultural or horticultural organization, civic 

league or an organization operated exclusively for the promotion 

of social welfare;

ii. It is exempt from income tax in its jurisdiction of residence; 

iii. It has no shareholders or members who have a proprietary or 

beneficial interest in its income or assets;

iv. The applicable laws of the NFFE’s jurisdiction of residence or 

the NFFE’s formation documents do not permit any income or 

assets of the NFFE to be distributed to, or applied for the benefit 

of, a private person or non-charitable Entity other than pursuant 

to the conduct of the NFFE’s charitable activities, or as payment 

of reasonable compensation for services rendered, or as payment 

representing the fair market value of property which the NFFE 

has purchased; and

v. The applicable laws of the NFFE’s jurisdiction of residence or 

the NFFE’s formation documents require that, upon the NFFE’s 

liquidation or dissolution, all of its assets be distributed to a 

governmental entity or other non-profit organization, or escheat 

to the government of the NFFE’s jurisdiction of residence or any 

political subdivision thereof.

5. Preexisting Account. A “Preexisting Account” means a Financial Account 

maintained by a Reporting Financial Institution as of June 30, 2014.

C. Account Balance Aggregation and Currency Translation Rules.

1. Aggregation of Individual Accounts. For purposes of determining the 

aggregate balance or value of Financial Accounts held by an individual, a 

Reporting Portuguese Financial Institution is required to aggregate all Financial 
17

Accounts maintained by the Reporting Portuguese Financial Institution, or by a 

Related Entity, but only to the extent that the Reporting Portuguese Financial 

Institution’s computerized systems link the Financial Accounts by reference to a 

data element such as client number or taxpayer identification number, and allow 

account balances or values to be aggregated. Each holder of a jointly held 

Financial Account shall be attributed the entire balance or value of the jointly held 

Financial Account for purposes of applying the aggregation requirements 

described in this paragraph 1.

2. Aggregation of Entity Accounts. For purposes of determining the 

aggregate balance or value of Financial Accounts held by an Entity, a Reporting 

Portuguese Financial Institution is required to take into account all Financial 

Accounts that are maintained by the Reporting Portuguese Financial Institution,

or by a Related Entity, but only to the extent that the Reporting Portuguese

Financial Institution’s computerized systems link the Financial Accounts by 

reference to a data element such as client number or taxpayer identification 

number, and allow account balances or values to be aggregated.

3. Special Aggregation Rule Applicable to Relationship Managers. For 

purposes of determining the aggregate balance or value of Financial Accounts 

held by a person to determine whether a Financial Account is a High Value 

Account, a Reporting Portuguese Financial Institution is also required, in the case 

of any Financial Accounts that a relationship manager knows, or has reason to 

know, are directly or indirectly owned, controlled, or established (other than in a 

fiduciary capacity) by the same person, to aggregate all such accounts.

4. Currency Translation Rule. For purposes of determining the balance or 

value of Financial Accounts denominated in a currency other than the U.S. dollar, 

a Reporting Portuguese Financial Institution must convert the U.S. dollar

threshold amounts described in this Annex I into such currency using a published 

spot rate determined as of the last day of the calendar year preceding the year in 

which the Reporting Portuguese Financial Institution is determining the balance 

or value.

D. Documentary Evidence. For purposes of this Annex I, acceptable documentary 

evidence includes any of the following:

1. A certificate of residence issued by an authorized government body (for 

example, a government or agency thereof, or a municipality) of the jurisdiction in 

which the payee claims to be a resident.

2. With respect to an individual, any valid identification issued by an 

authorized government body (for example, a government or agency thereof, or a 

municipality), that includes the individual’s name and is typically used for 

identification purposes.

3. With respect to an Entity, any official documentation issued by an 
18

authorized government body (for example, a government or agency thereof, or a 

municipality) that includes the name of the Entity and either the address of its 

principal office in the jurisdiction (or U.S. Territory) in which it claims to be a 

resident or the jurisdiction (or U.S. Territory) in which the Entity was 

incorporated or organized.

4. With respect to a Financial Account maintained in a jurisdiction with antimoney laundering rules that have been approved by the IRS in connection with a 

QI agreement (as described in relevant U.S. Treasury Regulations), any of the 

documents, other than a Form W-8 or W-9, referenced in the jurisdiction’s

attachment to the QI agreement for identifying individuals or Entities.

5. Any financial statement, third-party credit report, bankruptcy filing, or 

U.S. Securities and Exchange Commission report.

E. Alternative Procedures for Financial Accounts Held by Individual 

Beneficiaries of a Cash Value Insurance Contract. A Reporting Portuguese Financial 

Institution may presume that an individual beneficiary (other than the owner) of a Cash 

Value Insurance Contract receiving a death benefit is not a Specified U.S. Person and 

may treat such Financial Account as other than a U.S. Reportable Account unless the 

Reporting Portuguese Financial Institution has actual knowledge, or reason to know, that 

the beneficiary is a Specified U.S. Person. A Reporting Portuguese Financial Institution 

has reason to know that a beneficiary of a Cash Value Insurance Contract is a Specified 

U.S. Person if the information collected by the Reporting Portuguese Financial Institution 

and associated with the beneficiary contains U.S. indicia as described in subparagraph 

(B)(1) of section II of this Annex I. If a Reporting Portuguese Financial Institution has 

actual knowledge, or reason to know, that the beneficiary is a Specified U.S. Person, the 

Reporting Portuguese Financial Institution must follow the procedures in subparagraph 

B(3) of section II of this Annex I.

F. Reliance on Third Parties. Regardless of whether an election is made under 

paragraph C of section I of this Annex I, Portugal may permit Reporting Portuguese

Financial Institutions to rely on due diligence procedures performed by third parties, to 

the extent provided in relevant U.S. Treasury Regulations.
ANNEX II

The following Entities shall be treated as exempt beneficial owners or deemed-compliant FFIs, 

as the case may be, and the following accounts are excluded from the definition of Financial 

Accounts.

This Annex II may be modified by a mutual written decision entered into between the 

Competent Authorities of Portugal and the United States: (1) to include additional Entities and

accounts 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 and accounts described in this Annex II as of the date of 

signature of the Agreement; or (2) to remove Entities and accounts that, due to changes in 

circumstances, no longer present a low risk of being used by U.S. Persons to evade U.S. tax. 

Any such addition or removal shall be effective on the date of signature of the mutual decision, 

unless otherwise provided therein. Procedures for reaching such a mutual decision may be 

included in the mutual agreement or arrangement described in paragraph 6 of Article 3 of the 

Agreement.

I. Exempt Beneficial Owners other than Funds. The following Entities shall be treated as 

Non-Reporting Portuguese Financial Institutions and as exempt beneficial owners for 

purposes of sections 1471 and 1472 of the U.S. Internal Revenue Code, other than with 

respect to a payment that is derived from an obligation held in connection with a 

commercial financial activity of a type engaged in by a Specified Insurance Company, 

Custodial Institution, or Depository Institution.

A. Governmental Entity. The government of Portugal, any political subdivision of 

Portugal (which, for the avoidance of doubt, includes a state, province, county, or 

municipality), or any wholly owned agency or instrumentality of Portugal or any one or 

more of the foregoing (each, a “Portuguese Governmental Entity”). This category is 

comprised of the integral parts, controlled entities, and political subdivisions of 

Portugal.

1. An integral part of Portugal means any person, organization, agency, bureau, fund, 

instrumentality, or other body, however designated, that constitutes a governing 

authority of Portugal. The net earnings of the governing authority must be credited 

to its own account or to other accounts of Portugal, with no portion inuring to the 

benefit of any private person. An integral part does not include any individual who 

is a sovereign, official, or administrator acting in a private or personal capacity. 

2. A controlled entity means an Entity that is separate in form from Portugal or that 

otherwise constitutes a separate juridical entity, provided that:

a) The Entity is wholly owned and controlled by one or more Portuguese

Governmental Entities directly or through one or more controlled entities; 
2

b) The Entity’s net earnings are credited to its own account or to the accounts of 

one or more Portuguese Governmental Entities, with no portion of its income 

inuring to the benefit of any private person; and 

c) The Entity’s assets vest in one or more Portuguese Governmental Entities upon 

dissolution. 

3. Income does not inure to the benefit of private personsif such persons are the 

intended beneficiaries of a governmental program, and the program activities are 

performed for the general public with respect to the common welfare or relate to the 

administration of some phase of government. Notwithstanding the foregoing, 

however, income is considered to inure to the benefit of private persons if the

income is derived from the use of a governmental entity to conduct a commercial 

business, such as a commercial banking business, that provides financial services to 

private persons.

B. International Organization. Any international organization or wholly owned agency 

or instrumentality thereof. This category includes any intergovernmental organization 

(including a supranational organization) (1) that is comprised primarily of non-U.S.

governments; (2) that has in effect a headquarters agreement with Portugal; and (3) the

income of which does not inure to the benefit of private persons.

C. Central Bank. An institution that is by law or government sanction the principal 

authority, other than the government of Portugal itself, issuing instruments intended to 

circulate as currency. Such an institution may include an instrumentality that is separate 

from the government of Portugal, whether or not owned in whole or in part by Portugal.

II. Funds that Qualify as Exempt Beneficial Owners. The following Entities shall be

treated as Non-Reporting Portuguese Financial Institutions and as exempt beneficial owners

for purposes of sections 1471 and 1472 of the U.S. Internal Revenue Code.

A. Treaty-Qualified Retirement Fund. A fund established in Portugal, provided that the 

fund is entitled to benefits under an income tax treaty between Portugal and the United 

States on income that it derives from sources within the United States (or would be 

entitled to such benefits if it derived any such income) as a resident of Portugal that 

satisfies any applicable limitation on benefits requirement, and is operated principally to 

administer or provide pension or retirement benefits.

B. Broad Participation Retirement Fund. A fund established in Portugal to provide 

retirement, disability, or death benefits, or any combination thereof, to beneficiaries that 

are current or former employees (or persons designated by such employees) of one or 

more employers in consideration for services rendered, provided that the fund:
3

1. Does not have a single beneficiary with a right to more than five percent of the 

fund’s assets; 

2. Is subject to government regulation and provides annual information reporting about 

its beneficiaries to the relevant tax authorities in Portugal; and 

3. Satisfies at least one of the following requirements:

a) The fund is generally exempt from tax in Portugal on investment income under 

the laws of Portugal due to its status as a retirement or pension plan; 

b) The fund receives at least 50 percent of its total contributions (other than 

transfers of assets from other plans described in paragraphs A through D of this 

section or from retirement and pension accounts described in subparagraph A(1)

of section V of this Annex II) from the sponsoring employers; 

c) Distributions or withdrawals from the fund are allowed only upon the 

occurrence of specified events related to retirement, disability, or death (except 

rollover distributions to other retirement funds described in paragraphs A 

through D of this section or retirement and pension accounts described in 

subparagraph A(1) of section V of this Annex II), or penalties apply to 

distributions or withdrawals made before such specified events; or

d) Contributions (other than certain permitted make-up contributions) by

employees to the fund are limited by reference to earned income of the 

employee or may not exceed $50,000 annually, applying the rules set forth in 

Annex I for account aggregation and currency translation.

C. Narrow Participation Retirement Fund. A fund established in Portugal to provide 

retirement, disability, or death benefits to beneficiaries that are current or former 

employees (or persons designated by such employees) of one or more employers in 

consideration for services rendered, provided that:

1. The fund has fewer than 50 participants; 

2. The fund is sponsored by one or more employers that are not Investment Entities or 

Passive NFFEs; 

3. The employee and employer contributions to the fund (other than transfers of assets 

from treaty-qualified retirement funds described in paragraph A of this section or 

retirement and pension accounts described in subparagraph A(1) of section V of this 
4

Annex II) are limited by reference to earned income and compensation of the 

employee, respectively; 

4. Participants that are not residents of Portugal are not entitled to more than 20 

percent of the fund’s assets; and 

5. The fund is subject to government regulation and provides annual information 

reporting about its beneficiaries to the relevant tax authorities in Portugal.

D. Pension Fund of an Exempt Beneficial Owner. A fund established in Portugal by an 

exempt beneficial owner to provide retirement, disability, or death benefits to 

beneficiaries or participants that are current or former employees of the exempt 

beneficial owner (or persons designated by such employees), or that are not current or 

former employees, if the benefits provided to such beneficiaries or participants are in 

consideration of personal services performed for the exempt beneficial owner.

E. Investment Entity Wholly Owned by Exempt Beneficial Owners. An Entity that is a

Portuguese Financial Institution solely because it is an Investment Entity, provided that 

each direct holder of an Equity Interest in the Entity is an exempt beneficial owner, and 

each direct holder of a debt interest in such Entity is either a Depository Institution 

(with respect to a loan made to such Entity) or an exempt beneficial owner.

III. Small or Limited Scope Financial Institutions that Qualify as Deemed-Compliant

FFIs. The following Financial Institutions are Non-Reporting Portuguese Financial 

Institutions that shall be treated as deemed-compliant FFIs for purposes of section 1471 of 

the U.S. Internal Revenue Code.

A. Financial Institution with a Local Client Base. A Financial Institution satisfying the 

following requirements:

1. The Financial Institution must be licensed and regulated as a financial institution 

under the laws of Portugal; 

2. The Financial Institution must have no fixed place of business outside of Portugal. 

For this purpose, a fixed place of business does not include a location that is not 

advertised to the public and from which the Financial Institution performs solely 

administrative support functions;

3. The Financial Institution must not solicit customers or Account Holders outside 

Portugal. For this purpose, a Financial Institution shall not be considered to have 

solicited customers or Account Holders outside Portugal merely because the 

Financial Institution (a) operates a website, provided that the website does not 

specifically indicate that the Financial Institution provides Financial Accounts or 
5

services to nonresidents, and does not otherwise target or solicit U.S. customers or 

Account Holders, or (b) advertises in print media or on a radio or television station 

that is distributed or aired primarily within Portugal but is also incidentally 

distributed or aired in other countries, provided that the advertisement does not 

specifically indicate that the Financial Institution provides Financial Accounts or

services to nonresidents, and does not otherwise target or solicit U.S. customers or

Account Holders;

4. The Financial Institution must be required under the laws of Portugal to identify 

resident Account Holders for purposes of either information reporting or 

withholding of tax with respect to Financial Accounts held by residents or for 

purposes of satisfying Portugal’s AML due diligence requirements;

5. At least 98 percent of the Financial Accounts by value maintained by the Financial 

Institution must be held by residents (including residents that are Entities) of 

Portugal or a Member State of the European Union; 

6. Beginning on or before July 1, 2014, the Financial Institution must have policies 

and procedures, consistent with those set forth in Annex I, to prevent the Financial 

Institution from providing a Financial Account to any Nonparticipating Financial 

Institution and to monitor whether the Financial Institution opens or maintains a 

Financial Account for any Specified U.S. Person who is not a resident of Portugal 

(including a U.S. Person that was a resident of Portugal when the Financial Account 

was opened but subsequently ceases to be a resident of Portugal) or any Passive 

NFFE with Controlling Persons who are U.S. residents or U.S. citizens who are not 

residents of Portugal; 

7. Such policies and procedures must provide that if any Financial Account held by a 

Specified U.S. Person who is not a resident of Portugal or by a Passive NFFE with 

Controlling Persons who are U.S. residents or U.S. citizens who are not residents of 

Portugal is identified, the Financial Institution must report such Financial Account 

as would be required if the Financial Institution were a Reporting Portuguese

Financial Institution (including by following the applicable registration 

requirements on the IRS FATCA registration website) or close such Financial

Account;

8. With respect to a Preexisting Account held by an individual who is not a resident of 

Portugal or by an Entity, the Financial Institution must review those Preexisting 

Accounts in accordance with the procedures set forth in Annex I applicable to 

Preexisting Accounts to identify any U.S. Reportable Account or Financial Account 

held by a Nonparticipating Financial Institution, and must report such Financial 

Account as would be required if the Financial Institution were a Reporting 

Portuguese Financial Institution (including by following the applicable registration 
6

requirements on the IRS FATCA registration website) or close such Financial 

Account;

9. Each Related Entity of the Financial Institution that is a Financial Institution must 

be incorporated or organized in Portugal and, with the exception of any Related 

Entity that is a retirement fund described in paragraphs A through D of section II of 

this Annex II, satisfy the requirements set forth in this paragraph A; and 

10. The Financial Institution must not have policies or practices that discriminate against

opening or maintaining Financial Accounts for individuals who are Specified U.S.

Persons and residents of Portugal.

B. Local Bank. A Financial Institution satisfying the following requirements:

1. The Financial Institution operates solely as (and is licensed and regulated under the 

laws of Portugal as) (a) a bank or (b) a credit union or similar cooperative credit 

organization that is operated without profit;

2. The Financial Institution’s business consists primarily of receiving deposits from 

and making loans to, with respect to a bank, unrelated retail customers and, with 

respect to a credit union or similar cooperative credit organization, members, 

provided that no member has a greater than five percent interest in such credit union 

or cooperative credit organization;

3. The Financial Institution satisfies the requirements set forth in subparagraphs A(2)

and A(3) of this section, provided that, in addition to the limitations on the website 

described in subparagraph A(3) of this section, the website does not permit the 

opening of a Financial Account;

4. The Financial Institution does not have more than $175 million in assets on its 

balance sheet, and the Financial Institution and any Related Entities, taken together, 

do not have more than $500 million in total assets on their consolidated or combined 

balance sheets; and

5. Any Related Entity must be incorporated or organized in Portugal, and any Related 

Entity that is a Financial Institution, with the exception of any Related Entity that is 

a retirement fund described in paragraphs A through D of section II of this Annex 

II or a Financial Institution with only low-value accounts described in paragraph C 

of this section, must satisfy the requirements set forth in this paragraph B. 

C. Financial Institution with Only Low-Value Accounts. A Portuguese Financial 

Institution satisfying the following requirements:
7

1. The Financial Institution is not an Investment Entity;

2. No Financial Account maintained by the Financial Institution or any Related Entity

has a balance or value in excess of $50,000, applying the rules set forth in Annex I 

for account aggregation and currency translation; and 

3. The Financial Institution does not have more than $50 million in assets on its 

balance sheet, and the Financial Institution and any Related Entities, taken together, 

do not have more than $50 million in total assets on their consolidated or combined 

balance sheets. 

D. Qualified Credit Card Issuer. A Portuguese Financial Institution satisfying the 

following requirements:

1. The Financial Institution is a Financial Institution solely because it is an issuer of 

credit cards that accepts deposits only when a customer makes a payment in excess 

of a balance due with respect to the card and the overpayment is not immediately 

returned to the customer; and

2. Beginning on or before July 1, 2014, the Financial Institution implements policies 

and procedures to either prevent a customer deposit in excess of $50,000, or to 

ensure that any customer deposit in excess of $50,000, in each case applying the 

rules set forth in Annex I for account aggregation and currency translation, is 

refunded to the customer within 60 days. For this purpose, a customer deposit does 

not refer to credit balances to the extent of disputed charges but does include credit 

balances resulting from merchandise returns.

IV. Investment Entities that Qualify as Deemed-Compliant FFIs and Other Special Rules. 

The Financial Institutions described in paragraphs A through E of this section are NonReporting Portuguese Financial Institutions that shall be treated as deemed-compliant FFIs 

for purposes of section 1471 of the U.S. Internal Revenue Code. In addition, paragraph F

of this section provides special rules applicable to an Investment Entity. 

A. Trustee-Documented Trust. A trust established under the laws of Portugal to the 

extent that the trustee of the trust is a Reporting U.S. Financial Institution, Reporting 

Model 1 FFI, or Participating FFI and reports all information required to be reported

pursuant to the Agreement with respect to all U.S. Reportable Accounts of the trust.

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

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

entity that complies with the requirements of subparagraph B(3) of this section. 
8

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

Entity established in Portugal 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 

Portugal that is not a qualified intermediary, withholding foreign partnership, or

withholding foreign trust pursuant to relevant U.S. Treasury 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 later of December 31, 2015 and the date that is 90 days 

after such a U.S. Reportable Account is first identified; 

 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.
9

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 

Portuguese 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.

C. Sponsored, Closely Held Investment Vehicle. A Portuguese 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;

2. The sponsoring entity is a Reporting U.S. Financial Institution, Reporting Model 1 

FFI, or Participating FFI, 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 Portuguese 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 C); and

5. The sponsoring entity complies with the following requirements: 

a) The sponsoring entity has registered as a sponsoring entity pursuant to 

applicable registration requirements; 

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 
10

Portuguese 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 

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

D. Investment Advisors and Investment Managers. An Investment Entity established in 

Portugal that is a Financial Institution solely because it (1) renders investment advice to, 

and acts on behalf of, or (2) manages portfolios for, and acts on behalf of, a customer

for the purposes of investing, managing, or administering funds deposited in the name 

of the customer with a Financial Institution other than a Nonparticipating Financial 

Institution.

E. Collective Investment Vehicle. An Investment Entity established in Portugal that is 

regulated as a collective investment vehicle, provided that all of the interests in the 

collective investment vehicle (including debt interests in excess of $50,000) are held by 

or through one or more exempt beneficial owners, Active NFFEs described in 

subparagraph B(4) of section VI of Annex I, U.S. Persons that are not Specified U.S. 

Persons, or Financial Institutions that are not Nonparticipating Financial Institutions. 

F. Special Rules. The following rules apply to an Investment Entity: 

1. With respect to interests in an Investment Entity that is a collective investment 

vehicle described in paragraph E of this section, the reporting obligations of any 

Investment Entity (other than a Financial Institution through which interests in the 

collective investment vehicle are held) shall be deemed fulfilled.

2. With respect to interests in: 

a) An Investment Entity established in a Partner Jurisdiction that is regulated as a 

collective investment vehicle, all of the interests in which (including debt 

interests in excess of $50,000) are held by or through one or more exempt 

beneficial owners, Active NFFEs described in subparagraph B(4) of section VI 

of Annex I, U.S. Persons that are not Specified U.S. Persons, or Financial 

Institutions that are not Nonparticipating Financial Institutions; or

b) An Investment Entity that is a qualified collective investment vehicle under 

relevant U.S. Treasury Regulations;
11

the reporting obligations of any Investment Entity that is a Portuguese Financial 

Institution (other than a Financial Institution through which interests in the 

collective investment vehicle are held) shall be deemed fulfilled.

3. With respect to interests in an Investment Entity established in Portugal that is not 

described in paragraph E or subparagraph F(2) of this section, consistent with 

paragraph 3 of Article 5 of the Agreement, the reporting obligations of all other 

Investment Entities with respect to such interests shall be deemed fulfilled if the 

information required to be reported by the first-mentioned Investment Entity

pursuant to the Agreement with respect to such interests is reported by such 

Investment Entity or another person.

4. An Investment Entity established in Portugal that is regulated as a collective 

investment vehicle shall not fail to qualify under paragraph E or subparagraph F(2) 

of this section, or otherwise as a deemed-compliant FFI, solely because the 

collective investment vehicle has issued physical shares in bearer form, provided 

that: 

a) The collective investment vehicle has not issued, and does not issue, any 

physical shares in bearer form after December 31, 2012; 

b) The collective investment vehicle retires all such shares upon surrender; 

c) The collective investment vehicle (or a Reporting Portuguese Financial 

Institution) performs the due diligence procedures set forth in Annex I and 

reports any information required to be reported with respect to any such shares 

when such shares are presented for redemption or other payment; and 

d) The collective investment vehicle has in place policies and procedures to ensure 

that such shares are redeemed or immobilized as soon as possible and in any 

event prior to January 1, 2017.

V. Accounts Excluded from Financial Accounts. The following accounts are excluded from 

the definition of Financial Accounts and therefore shall not be treated as U.S. Reportable 

Accounts.

A. Certain Savings Accounts.

1. Retirement and Pension Account. A retirement or pension account maintained in 

Portugal that satisfies the following requirements under the laws of Portugal.
12

a) The account is subject to regulation as a personal retirement account or is part of 

a registered or regulated retirement or pension plan for the provision of 

retirement or pension benefits (including disability or death benefits);

b) The account is tax-favored (i.e., contributions to the account that would 

otherwise be subject to tax under the laws of Portugal are deductible or excluded 

from the gross income of the account holder or taxed at a reduced rate, or 

taxation of investment income from the account is deferred or taxed at a reduced 

rate);

c) Annual information reporting is required to the tax authorities in Portugal with 

respect to the account;

d) Withdrawals are conditioned on reaching a specified retirement age of the 

account holder, disability, death, or the conditions specified in Decree-Law 

158/2002 or Decree-Law 12/2006, or penalties apply to withdrawals made 

before such specified events; and

e) Either (i) annual contributions are either limited to $50,000 or less or do not 

exceed $50,000, or (ii) there is a maximum lifetime contribution limit to the 

account of $1,000,000 or less, in each case applying the rules set forth in Annex 

I for account aggregation and currency translation. 

2. Non-Retirement Savings Accounts. An account maintained in Portugal (other than 

an insurance contract or Annuity Contract) that satisfies the following requirements

under the laws of Portugal.

a) The account is subject to regulation as a savings vehicle for purposes other than 

for retirement;

b) The account is tax-favored (i.e., contributions to the account that would 

otherwise be subject to tax under the laws of Portugal are deductible or excluded 

from the gross income of the account holder or taxed at a reduced rate, or 

taxation of investment income from the account is deferred or taxed at a reduced 

rate);

c) Withdrawals are conditioned on meeting specific criteria related to the purpose 

of the savings account (for example, the provision of educational or medical 

benefits), or penalties apply to withdrawals made before such criteria are met; 

and
13

d) Annual contributions are either limited to $50,000 or less or do not exceed

$50,000, applying the rules set forth in Annex I for account aggregation and 

currency translation.

B. Certain Term Life Insurance Contracts. A life insurance contract maintained in 

Portugal with a coverage period that will end before the insured individual attains age 

90, provided that the contract satisfies the following requirements: 

1. Periodic premiums, which do not decrease over time, are payable at least annually 

during the period the contract is in existence or until the insured attains age 90, 

whichever is shorter;

2. The contract has no contract value that any person can access (by withdrawal, loan, 

or otherwise) without terminating the contract;

3. The amount (other than a death benefit) payable upon cancellation or termination of 

the contract cannot exceed the aggregate premiums paid for the contract, less the 

sum of mortality, morbidity, and expense charges (whether or not actually imposed) 

for the period or periods of the contract’s existence and any amounts paid prior to 

the cancellation or termination of the contract; and

4. The contract is not held by a transferee for value.

C. Account Held By an Estate. An account maintained in Portugal that is held solely by 

an estate if the documentation for such account includes a copy of the deceased’s will or 

death certificate.

D. Escrow Accounts. An account maintained in Portugal established in connection with 

any of the following: 

1. A court order or judgment.

2. A sale, exchange, or lease of real or personal property, provided that the account 

satisfies the following requirements:

a) The account is funded solely with a down payment, earnest money, deposit in an 

amount appropriate to secure an obligation directly related to the transaction, or 

a similar payment, or is funded with a financial asset that is deposited in the 

account in connection with the sale, exchange, or lease of the property;

b) The account is established and used solely to secure the obligation of the 

purchaser to pay the purchase price for the property, the seller to pay any 
14

contingent liability, or the lessor or lessee to pay for any damages relating to the 

leased property as agreed under the lease;

c) The assets of the account, including the income earned thereon, will be paid or 

otherwise distributed for the benefit of the purchaser, seller, lessor, or lessee 

(including to satisfy such person’s obligation) when the property is sold, 

exchanged, or surrendered, or the lease terminates;

d) The account is not a margin or similar account established in connection with a 

sale or exchange of a financial asset; and

e) The account is not associated with a credit card account. 

3. An obligation of a Financial Institution servicing a loan secured by real property to 

set aside a portion of a payment solely to facilitate the payment of taxes or insurance 

related to the real property at a later time.

4. An obligation of a Financial Institution solely to facilitate the payment of taxes at a 

later time.

E. Partner Jurisdiction Accounts. An account maintained in Portugal and excluded from 

the definition of Financial Account under an agreement between the United States and 

another Partner Jurisdiction to facilitate the implementation of FATCA, provided that 

such account is subject to the same requirements and oversight under the laws of such 

other Partner Jurisdiction as if such account were established in that Partner Jurisdiction 

and maintained by a Partner Jurisdiction Financial Institution in that Partner 

Jurisdiction.

VI. Definitions. The following additional definitions shall apply to the descriptions above:

A. Reporting Model 1 FFI. 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. 

B. Participating FFI. 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 
15

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.