DECLARATION OF UNDERSTANDING REGARDING TilE AGREEMENT BETWEEN 

TilE UNITED STATES OF AMERICA AND TilE CZECH REPUBLIC TO IMPROVE 

INTERNATIONAL TAX COMPLIANCE AND WITH RESPECT TO TilE UNITED 

STATES INFORMATION AND REPORTING PROVISIONS COMMONLY KNOWN AS 

TilE FOREIGN ACCOUNT TAX COMPLIANCE ACT 

At the signing today of the Agreement between the United States of America and the Czech 

Republic to Improve International Tax Compliance and with Respect to the United States 

Information and Reporting Provisions Commonly Known as the Foreign Account Tax 

Compliance Act (hereinafter the "Agreement"), the representatives of the United States of 

America and the Czech Republic wish to confirm their understanding of the following: 

With reference to subparagraph l(kk) of Article 1 of the Agreement 

It is understood that the term "Czech TIN'' includes the identifier used for tax purposes. 

With reference to subparagraph 2(a)(3) of Article 2 ofthe Agreement 

It is further understood that the Czech Republic intends for each Reporting Czech Financial 

Institution to use a Global Intermediary Identification Number issued by the IRS as the 

identifying number referenced in subparagraph 2(a)(3) of Article 2 of the Agreement. 

With reference to paragraph 7 of Article 3 (Time and Manner of Exchange of Information) 

of the Agreement 

It is understood that paragraph I sentences 3 through 5 of Article 27 of the Convention, applies to 

all information exchanged under the Agreement and sentence 5 of that paragraph applies 

accordingly for all persons or authorities in case the exchanged information is disclosed in public 

court proceedings or in judicial decisions. 

With reference to subparagraph l(c) of Article 4 of the Agreement and other references to 

registration requirements applicable to Financial Institutions in Partner Jurisdictions 

It is understood that the Czech Republic intends for Czech Financial Institutions to comply with 

the registration requirements applicable to Financial Institutions in Partner Jurisdictions by 

registering with the IRS and obtaining a Global Intermediary Identification Number from the 

IRS. 

With reference to paragraph 1 of Article 5 of the Agreement (Collaboration on Compliance 

and Enforcement) 

It is understood that no new obligations other than currently in effect under the Convention are 

introduced under the Agreement when the Competent Authority of such other Party applies its 

domestic law (including applicable penalties) to obtain corrected and/or complete information or 
to resolve other infringements of the Agreement, and it is also understood that no provisions of 

the Convention, including the mutual agreement procedure under the Convention are limited or 

amended by the Agreement. 

With reference to paragraph 1 of Article 10 (Term of Agreement) and paragraph 10 of 

Article 3 of the Agreement 

The United States understands that the Czech Republic plans to present the Agreement to its 

Parliament for its approval in 2014 together with draft legislation that is to implement the 

provisions of the Agreement with the goal of having the Agreement and the legislation enter into 

force not later than September 30, 2015. Based on this understanding, as of the date of signature 

of the Agreement, the United States Department of the Treasury intends to treat each Czech 

Financial Institution, as that term is defined in the Agreement, as complying with and not subject 

to withholding under section 1471 of the U.S. Internal Revenue Code during such time as the 

Czech Republic is pursuing the necessary internal procedures for entry into force of the 

Agreement. The United States further understands that the Czech Republic's Ministry of Finance 

intends to contact the United States Department of the Treasury as soon as it is aware that there 

might be a delay in the Czech internal approval process for entry into force of the Agreement 

such that the Czech Republic would not be able to provide its notification under paragraph 1 of 

Article 10 ofthe Agreement prior to September 30,2015. If upon consultation with the Czech 

Republic, the United States Department of the Treasury receives credible assurances that such a 

delay is likely to be resolved in a reasonable period of time, the United States Department of the 

Treasury may decide to continue to apply F ATCA to Czech Financial Institutions in the manner 

described above as long as the United States Department of the Treasury assesses that the Czech 

Republic is likely to be able to send its notification under paragraph I of Article 10 by September 

30, 2016. It is understood that should the Agreement enter into force after September 30, 2015, 

any information that would have been reportable under the Agreement thereafter (and prior to its 

entry into force) had the Agreement been in force by September 30,2015, is owed on the 

September 30 next following the date of entry into force. 

With reference to Article 8 (Consultations and Amendments) of the Agreement 

The Competent Authority of the United States intends to notify in writing the Competent 

Authority ofthe Czech Republic of any substantial modification of the FATCA legislation or 

regulations. 

Signed at '/tr:tCJMe , in duplicate in the English and Czech languages, 0 

this _f_ day of ¥{ , 20 /f. 

For the 

United States of America: 

For the 

Czech Repub~__J ~,