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Agreement between the Government of the United States of America and the Government 

of the Republic of the Philippines to Improve International Tax Compliance and to 

Implement FATCA

Whereas, the Government of the United States of America and the Government of the Republic 

of the Philippines (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 26 of the Convention between the Government of the United States of America 

and the Government of the Republic of the Philippines with Respect to Taxes on Income, done at 

Manila on October 1, 1976 (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 Republic of the Philippines is supportive of the underlying 

policy goal of FATCA to improve tax compliance;

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

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

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

accounts maintained by U.S. financial institutions held by residents of the Republic of the 

Philippines and is committed to exchanging such information with the Government of the 

Republic of the Philippines 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 Philippine 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, but 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 “the Republic of the Philippines” means the Republic of the 

Philippines.

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 the Republic of the Philippines, the Secretary of Finance or 

his delegate, the Commissioner of Internal Revenue.

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

Institution, an Investment Entity, or a Specified Insurance Company.

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. 
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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 “Philippine Financial Institution” means (i) any Financial Institution 

organized under the laws of the Republic of the Philippines, but excluding any 

branch of such Financial Institution that is located outside the Republic of the 

Philippines, and (ii) any branch of a Financial Institution not organized under the 

laws of the Republic of the Philippines, if such branch is located in the Republic 

of the Philippines.

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 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 Philippine 

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

requires.

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

Financial Institution that is not a Non-Reporting Philippine 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 
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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 Philippine Financial Institution” means any 

Philippine Financial Institution, or other Entity resident in the Republic of the 

Philippines, that is described in Annex II as a Non-Reporting Philippine Financial 

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

beneficial owner under relevant U.S. Treasury Regulations in effect on the date of 

signature of this Agreement.

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 Philippine 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 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 noninvestment-linked, 

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 
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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 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 
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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 

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 

Philippine Reportable Account, as the context requires.

bb) The term “Philippine 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 the Republic 

of the Philippines 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 the Republic of the 

Philippines, including an Entity that certifies that it is resident in the Republic of 

the Philippines 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 Philippine Financial Institution and held by one or more Specified 
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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 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 
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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. 

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, the Republic of the 

Philippines 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 “Philippine TIN” means a Philippine 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.
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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 

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 26 of the Convention.

2. The information to be obtained and exchanged is:

a) In the case of the Republic of the Philippines with respect to each U.S. Reportable 

Account of each Reporting Philippine 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 Philippine 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 
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(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 

Philippine 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 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 

Philippine 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 Philippine Reportable 

Account of each Reporting U.S. Financial Institution:

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

the Republic of the Philippines 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 the Republic of the 

Philippines, and the amount and characterization of payments made with respect to a 
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Philippine 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.

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 the Republic of the Philippines:

(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 the Determination Date, 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 Philippine 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 the Republic of the Philippines and the United States shall 

enter into an agreement or arrangement under the mutual agreement procedure provided 

for in Article 25 of the Convention, which shall:
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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

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 Philippine 

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 the Republic of the 

Philippines has such safeguards and infrastructure in place, the obligation of the Republic 

of the Philippines to obtain and exchange information under Article 2 of this Agreement 

shall take effect on the date of the written notification provided by the Philippine 

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 Philippine Financial Institutions

1. Treatment of Reporting Philippine Financial Institutions. Each Reporting Philippine 

Financial Institution shall be treated as complying with, and not subject to withholding 
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under, section 1471 of the U.S. Internal Revenue Code if the Republic of the Philippines 

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

such Reporting Philippine Financial Institution, and the Reporting Philippine Financial 

Institution:

a) identifies U.S. Reportable Accounts and reports annually to the Philippine 

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 Philippine 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 Philippine 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 Philippine 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 Philippine 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 Philippine 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 Philippine 

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 Philippine 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 
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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.

3. Specific Treatment of Philippine 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, Philippine retirement plans described in 

Annex II. For this purpose, a Philippine retirement plan includes an Entity established or located 

in, and regulated by, the Republic of the Philippines, 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 the Republic of the Philippines 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 Philippine 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 Philippine 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 Philippine 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 Philippine 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 Philippine Financial Institution or any other 
15

Related Entity to circumvent the obligations under this Agreement or under section 1471 

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

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

Agreement: 

a) the Republic of the Philippines 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) the Republic of the Philippines 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 the 

Republic of the Philippines 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 the Republic of the Philippines 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, the Republic of the Philippines may use, and may permit 

Philippine 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 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 
16

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 non-compliance described in the notice. 

b) If, in the case of a Reporting Philippine 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 

Philippine 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 the Republic of the 

Philippines. The Government of the United States is committed to further improve transparency 

and enhance the exchange relationship with the Republic of the Philippines 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 the Determination Date. With respect 

to Reportable Accounts maintained by a Reporting Financial Institution as of the Determination 

Date:

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 Philippine TIN of each Account Holder of a 

Philippine Reportable Account as required pursuant to subparagraph 2(b)(1) of Article 2 

of this Agreement; and
17

b) The Republic of the Philippines commits to establish, by January 1, 2017, for 

reporting with respect to 2017 and subsequent years, rules requiring Reporting Philippine 

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. The Republic of the Philippines 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 Philippine 

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 the 

Republic of the Philippines 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 the Republic of the Philippines 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 signing of the agreement 

incorporating the more favorable terms, unless the Republic of the Philippines 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.

Article 10

Term of Agreement

1. This Agreement shall enter into force on the date of the Republic of the Philippines’s 

written notification to the United States that the Republic of the Philippines has completed its 

necessary internal procedures for entry into force of this Agreement. 
18

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 [_____], in duplicate, this [__] day of [_____], 20[__].

FOR THE GOVERNMENT OF THE 

UNITED STATES OF AMERICA:

FOR THE GOVERNMENT OF THE

REPUBLIC OF THE PHILIPPINES:
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. The Republic of the Philippines shall require that Reporting Philippine 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 are in U.S. dollars and 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 the 

Determination Date 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 the Determination Date, 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 

calendar year or other appropriate reporting period. 

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, the 

Republic of the Philippines may permit Reporting Philippine 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. The Republic of the Philippines may permit Reporting Philippine 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 Philippine 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 the Republic of the Philippines 

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 the 

Determination Date.

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 the Determination Date.

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

or an Annuity Contract, provided the law or regulations of the Republic of the 

Philippines 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 the Republic of the Philippines requires reporting or withholding with 

respect to insurance products held by residents of the Republic of the Philippines).

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 the Determination Date, 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 Philippine Financial 

Institution must review electronically searchable data maintained by the 

Reporting Philippine 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);
3

d) Current U.S. telephone number;

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 Philippine 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 Philippine 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 Philippine 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 Philippine 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: 
4

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

a certificate despite relinquishing U.S. citizenship; or

(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 Philippine 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 Philippine 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 Philippine 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
5

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

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

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 within two years from the 

Determination Date. 

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 Philippine 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 the Determination Date, or 

December 31 of 2015 or Any Subsequent Year (“High Value Accounts”).

1. Electronic Record Search. The Reporting Philippine Financial 

Institution must review electronically searchable data maintained by the 

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

subparagraph B(1) of this section.

2. Paper Record Search. If the Reporting Philippine 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 Philippine 

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 Philippine 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;
6

b) The most recent account opening contract or documentation;

c) The most recent documentation obtained by the Reporting 

Philippine Financial Institution pursuant to AML/KYC Procedures or for 

other regulatory purposes;

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 Philippine Financial Institution is not required to perform the paper 

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

Philippine 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 Philippine Financial Institution;

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

any, with the Reporting Philippine 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 Philippine 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 Philippine 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 
7

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.

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 Philippine 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 the 

Determination Date, the Reporting Philippine Financial Institution must complete 

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

respect to such account within one year from the Determination Date. If based on 

this review such account is identified as a U.S. Reportable Account on or before 

December 31, 2014, the Reporting Philippine 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, the Reporting Philippine 

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 the 

Determination Date, but becomes a High Value Account as of the last day of 2015 

or any subsequent calendar year, the Reporting Philippine 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 

Philippine 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.
8

3. Once a Reporting Philippine Financial Institution applies the enhanced 

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

Account, the Reporting Philippine Financial Institution is not required to re-apply 

such procedures, other than the relationship manager inquiry described in 

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

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 Philippine 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 Philippine 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 Philippine 

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 Philippine 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 

after the Determination Date (“New Individual Accounts”).

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

Reporting Philippine 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 the Republic of the Philippines 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. 
9

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

Reporting Philippine 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 Philippine 

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 Philippine 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 Philippine Financial Institution to know, or 

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

the Reporting Philippine 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 Philippine Financial Institution is unable to obtain a valid selfcertification, the Reporting Philippine 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 Philippine 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 the Republic of the Philippines 

provide for such an election, a Preexisting Entity Account with an account balance or 

value that does not exceed $250,000 as of the Determination Date, 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.

 
10

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

account balance or value that exceeds $250,000 as of the Determination Date, and a 

Preexisting Entity Account that does not exceed $250,000 as of the Determination Date 

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 

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 

Philippine 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 Philippine 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 Philippine 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.
11

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

Institution, or the Reporting Philippine 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.

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

Philippine Financial Institution may determine that the Account Holder is 

a Philippine Financial Institution or other Partner Jurisdiction Financial 

Institution if the Reporting Philippine 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 Philippine 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 Philippine 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 Philippine Financial Institution or 

other Partner Jurisdiction Financial Institution, then the Reporting 

Philippine 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 Philippine 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 
12

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

Reporting Philippine 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 Philippine 

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 Philippine Financial Institution may rely on 

information collected and maintained pursuant to AML/KYC Procedures.

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

Passive NFFE, the Reporting Philippine 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

Philippine 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 the Determination Date must be completed within 

two years from the Determination Date.
13

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

that does not exceed $250,000 as of the Determination Date, 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 Philippine 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 Philippine 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 

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

Institutions among Financial Accounts held by Entities and opened after the Determination Date 

(“New Entity Accounts”). 

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

Unless the Reporting Philippine 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 the Republic of the Philippines 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 Philippine 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 Philippine Financial Institution 

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

Philippine 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 Philippine 

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

Philippine Financial Institution, or other Partner Jurisdiction Financial Institution 

if the Reporting Philippine 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 Philippine Financial Institution, as 

applicable. 
14

2. If the Account Holder is a Philippine 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 Philippine 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 

Philippine Financial Institution must treat the account as a U.S. Reportable 

Account.

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

Philippine 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 selfcertification from the Account Holder or such person. If any such person 

is a U.S. citizen or resident, the Reporting Philippine 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 

Philippine 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 Philippine 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 

Philippine Financial Institution may not rely on a self-certification or documentary 

evidence if the Reporting Philippine Financial Institution knows or has reason to know 

that the self-certification or documentary evidence is incorrect or unreliable.
15

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 Philippine Financial Institution pursuant 

to the anti-money laundering or similar requirements of the Republic of the 

Philippines to which such Reporting Philippine 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 the Republic of the Philippines 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.

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 
16

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 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 
17

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 the Determination 

Date.

6. Determination Date. The “Determination Date” means the date, which 

may be prior to entry into force of this Agreement, on which the Treasury 

Department determines not to apply withholding under section 1471 of the U.S. 

Internal Revenue Code to Philippine Financial Institutions. That date is: (a) June 

30, 2014, in the case of (i) a jurisdiction that signed an agreement with the United 

States to implement FATCA or facilitate FATCA implementation on or before 

June 30, 2014, or (ii) a jurisdiction that the Treasury Department determined 

reached such an agreement in substance on or before June 30, 2014, and is 

included on the Treasury Department list of such jurisdictions, (b) November 30, 

2014, in the case of a jurisdiction that the Treasury Department determined 

reached such an agreement in substance on or after July 1, 2014, and on or before 

November 30, 2014, and is included on the Treasury Department list of such 

jurisdictions, or (c) the date of signature of such an agreement, in the case of any 

other jurisdiction. The Determination Date for the Republic of the Philippines is 

November 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 Philippine Financial Institution is required to aggregate all Financial 

Accounts maintained by the Reporting Philippine Financial Institution, or by a 

Related Entity, but only to the extent that the Reporting Philippine 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.
18

2. Aggregation of Entity Accounts. For purposes of determining the 

aggregate balance or value of Financial Accounts held by an Entity, a Reporting 

Philippine Financial Institution is required to take into account all Financial 

Accounts that are maintained by the Reporting Philippine Financial Institution, or 

by a Related Entity, but only to the extent that the Reporting Philippine 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 Philippine 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 Philippine 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 Philippine 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 

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 
19

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 Philippine 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 Philippine Financial Institution has actual knowledge, or reason to know, that 

the beneficiary is a Specified U.S. Person. A Reporting Philippine 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 Philippine 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 Philippine Financial Institution has 

actual knowledge, or reason to know, that the beneficiary is a Specified U.S. Person, the 

Reporting Philippine 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, the Republic of the Philippines may permit 

Reporting Philippine Financial Institutions to rely on due diligence procedures performed 

by third parties, to the extent provided in relevant U.S. Treasury Regulations.

G. Alternative Procedures for New Accounts Opened Prior to Entry Into Force 

of this Agreement. 

1. Applicability. If the Republic of the Philippines has provided a written 

notice to the United States prior to entry into force of this Agreement that, as of 

the Determination Date, the Republic of the Philippines lacked the legal authority 

to require Reporting Philippine Financial Institutions either: (i) to require Account 

Holders of New Individual Accounts to provide the self-certification specified in 

section III of this Annex I, or (ii) to perform all the due diligence procedures 

related to New Entity Accounts specified in section V of this Annex I, then 

Reporting Philippine Financial Institutions may apply the alternative procedures 

described in subparagraph G(2) of this section, as applicable, to such New 

Accounts, in lieu of the procedures otherwise required under this Annex I. The 

alternative procedures described in subparagraph G(2) of this section shall be 

available only for those New Individual Accounts or New Entity Accounts, as 

applicable, opened prior to the earlier of: (i) the date the Republic of the 

Philippines has the ability to compel Reporting Philippine Financial Institutions to 

comply with the due diligence procedures described in section III or section V of 

this Annex I, as applicable, which date the Republic of the Philippines shall 
20

inform the United States of in writing by the date of entry into force of this 

Agreement, or (ii) the date of entry into force of this Agreement. If the alternative 

procedures for New Entity Accounts opened after the Determination Date, and 

before January 1, 2015, described in paragraph H of this section are applied with 

respect to all New Entity Accounts or a clearly identified group of such accounts, 

the alternative procedures described in this paragraph G may not be applied with 

respect to such New Entity Accounts. For all other New Accounts, Reporting 

Philippine Financial Institutions must apply the due diligence procedures 

described in section III or section V of this Annex I, as applicable, to determine if 

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

Nonparticipating Financial Institution.

2. Alternative Procedures. 

a) Within one year after the date of entry into force of this 

Agreement, Reporting Philippine Financial Institutions must: (i) with 

respect to a New Individual Account described in subparagraph G(1) of 

this section, request the self-certification specified in section III of this 

Annex I and confirm the reasonableness of such self-certification 

consistent with the procedures described in section III of this Annex I, and 

(ii) with respect to a New Entity Account described in subparagraph G(1) 

of this section, perform the due diligence procedures specified in section V 

of this Annex I and request information as necessary to document the 

account, including any self-certification, required by section V of this 

Annex I. 

b) The Republic of the Philippines must report on any New Account 

that is identified pursuant to subparagraph G(2)(a) of this section as a U.S. 

Reportable Account or as an account held by a Nonparticipating Financial 

Institution, as applicable, by the date that is the later of: (i) September 30 

next following the date that the account is identified as a U.S. Reportable 

Account or as an account held by a Nonparticipating Financial Institution, 

as applicable, or (ii) 90 days after the account is identified as a U.S. 

Reportable Account or as an account held by a Nonparticipating Financial 

Institution, as applicable. The information required to be reported with 

respect to such a New Account is any information that would have been 

reportable under this Agreement if the New Account had been identified 

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

Financial Institution, as applicable, as of the date the account was opened.

c) By the date that is one year after the date of entry into force of this 

Agreement, Reporting Philippine Financial Institutions must close any 

New Account described in subparagraph G(1) of this section for which it 

was unable to collect the required self-certification or other documentation 

pursuant to the procedures described in subparagraph G(2)(a) of this 

section. In addition, by the date that is one year after the date of entry into 
21

force of this Agreement, Reporting Philippine Financial Institutions must: 

(i) with respect to such closed accounts that prior to such closure were 

New Individual Accounts (without regard to whether such accounts were 

High Value Accounts), perform the due diligence procedures specified in 

paragraph D of section II of this Annex I, or (ii) with respect to such 

closed accounts that prior to such closure were New Entity Accounts, 

perform the due diligence procedures specified in section IV of this Annex 

I. 

d) The Republic of the Philippines must report on any closed account 

that is identified pursuant to subparagraph G(2)(c) of this section as a U.S. 

Reportable Account or as an account held by a Nonparticipating Financial 

Institution, as applicable, by the date that is the later of: (i) September 30 

next following the date that the account is identified as a U.S. Reportable 

Account or as an account held by a Nonparticipating Financial Institution, 

as applicable, or (ii) 90 days after the account is identified as a U.S. 

Reportable Account or as an account held by a Nonparticipating Financial 

Institution, as applicable. The information required to be reported for such 

a closed account is any information that would have been reportable under 

this Agreement if the account had been identified as a U.S. Reportable 

Account or as an account held by a Nonparticipating Financial Institution, 

as applicable, as of the date the account was opened. 

H. Alternative Procedures for New Entity Accounts Opened after the 

Determination Date, and before January 1, 2015. For New Entity Accounts opened 

after the Determination Date, and before January 1, 2015, either with respect to all New 

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

accounts, the Republic of the Philippines may permit Reporting Philippine Financial 

Institutions to treat such accounts as Preexisting Entity Accounts and apply the due 

diligence procedures related to Preexisting Entity Accounts specified in section IV of this 

Annex I in lieu of the due diligence procedures specified in section V of this Annex I. In 

this case, the due diligence procedures of section IV of this Annex I must be applied 

without regard to the account balance or value threshold specified in paragraph A of 

section IV of this Annex I.
1

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 the Republic of the Philippines 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 Philippine 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 the Republic of the Philippines, any 

political subdivision of the Republic of the Philippines (which, for the avoidance of 

doubt, includes a state, province, county, or municipality), or any wholly owned agency 

or instrumentality of the Republic of the Philippines or any one or more of the foregoing 

(each, a “Philippine Governmental Entity”). This category is comprised of the integral 

parts, controlled entities, and political subdivisions of the Republic of the Philippines. 

1. An integral part of the Republic of the Philippines means any person, 

organization, agency, bureau, fund, instrumentality, or other body, however 

designated, that constitutes a governing authority of the Republic of the 

Philippines. The net earnings of the governing authority must be credited to its 

own account or to other accounts of the Republic of the Philippines, 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 the 

Republic of the Philippines or that otherwise constitutes a separate juridical entity, 

provided that:
2

a) The Entity is wholly owned and controlled by one or more 

Philippine Governmental Entities directly or through one or more 

controlled entities; 

b) The Entity’s net earnings are credited to its own account or to the 

accounts of one or more Philippine 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 Philippine Governmental 

Entities upon dissolution. 

3. Income does not inure to the benefit of private persons if 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 the Republic of the Philippines; and (3) the income of which does 

not inure to the benefit of private persons.

C. An institution that is by law or government sanction the principal authority, other 

than the government of the Republic of the Philippines itself, issuing instruments 

intended to circulate as currency. 

II. Funds that Qualify as Exempt Beneficial Owners. The following Entities shall be 

treated as Non-Reporting Philippine Financial Institutions and as exempt beneficial 

owners for purposes of sections 1471 and 1472 of the U.S. Internal Revenue Code.

A. Certain Retirement Funds. A fund established in the Republic of the 

Philippines 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:

1. Does not have a single beneficiary with a right to more than five percent 

of the fund’s assets; 
3

2. Is subject to government regulation and provides annual information 

reporting about its beneficiaries to the relevant authorities in the Republic 

of the Philippines; and 

3. Satisfies at least one of the following requirements: 

a) The fund is generally exempt from tax in the Republic of the 

Philippines on investment income under the laws of the Republic 

of the Philippines 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 or B 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 or B 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.

B. Pension Fund of an Exempt Beneficial Owner. A fund established in the 

Republic of the Philippines 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.

C. Investment Entity Wholly Owned by Exempt Beneficial Owners. An Entity 

that is a Philippine 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.
4

III. Small or Limited Scope Financial Institutions that Qualify as Deemed-Compliant 

FFIs. The following Financial Institutions are Non-Reporting Philippine 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 the Republic of the Philippines; 

2. The Financial Institution must have no fixed place of business outside of 

the Republic of the Philippines. 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 the Republic of the Philippines. For this purpose, a Financial 

Institution shall not be considered to have solicited customers or Account 

Holders outside the Republic of the Philippines 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 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 the Republic of the Philippines 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 the Republic 

of the Philippines 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 the Republic of 

the Philippines’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 the Republic of the Philippines; 

6. Beginning on or before the Determination Date, 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 
5

whether the Financial Institution opens or maintains a Financial Account 

for any Specified U.S. Person who is not a resident of the Republic of the 

Philippines (including a U.S. Person that was a resident of the Republic of 

the Philippines when the Financial Account was opened but subsequently 

ceases to be a resident of the Republic of the Philippines) or any Passive 

NFFE with Controlling Persons who are U.S. residents or U.S. citizens 

who are not residents of the Republic of the Philippines; 

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 the Republic of 

the Philippines or by a Passive NFFE with Controlling Persons who are 

U.S. residents or U.S. citizens who are not residents of the Republic of the 

Philippines is identified, the Financial Institution must report such 

Financial Account as would be required if the Financial Institution were a 

Reporting Philippine 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 the Republic of the Philippines 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 

Philippine Financial Institution (including by following the applicable 

registration 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 the Republic of the 

Philippines and, with the exception of any Related Entity that is a 

retirement fund described in paragraphs A or B 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 the Republic 

of the Philippines.

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 the Republic of the Philippines as) (a) a bank or (b) a 

credit union or similar cooperative credit organization that is operated 

without profit;
6

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 the Republic of 

the Philippines, 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 or B 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 Philippine Financial 

Institution satisfying the following requirements:

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 Philippine 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
7

2. Beginning on or before the Determination Date, 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 

Non-Reporting Philippine 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 the Republic 

of the Philippines to the extent that the trustee of the trust is a Reporting U.S. 

Financial Institution, Reporting Model 1 FFI, or Participating FFI and the trustee 

reports all information required to be reported pursuant to the Agreement as 

would be required if the trust were a Reporting Philippine Financial Institution 

(including by following the applicable registration requirements on the IRS 

FATCA registration website). 

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. 

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

Investment Entity established in the Republic of the Philippines that is not 

a qualified intermediary, withholding foreign partnership, or withholding 

foreign trust pursuant to relevant U.S. Treasury Regulations; and (b) an 

Entity has agreed with the Financial Institution to act as a sponsoring 

entity for the Financial Institution. 

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

the Financial Institution is a controlled foreign corporation1

 organized 

under the laws of the Republic of the Philippines that is not a qualified 

intermediary, withholding foreign partnership, or withholding foreign trust 

 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.
8

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; 

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 Philippine 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 Philippine Financial 

Institution satisfying the following requirements:
9

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 Philippine 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 with the 

IRS on the IRS FATCA registration website; 

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

Institution, all due diligence, withholding, reporting, and other 

requirements that the Financial Institution would have been 

required to perform if it were a Reporting Philippine 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 the Republic of the Philippines 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.
10

E. Collective Investment Vehicle. An Investment Entity established in the 

Republic of the Philippines 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; 

the reporting obligations of any Investment Entity that is a Philippine 

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 the 

Republic of the Philippines 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.
11

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 the Republic of the Philippines that satisfies the following 

requirements under the laws of the Republic of the Philippines.

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 the Republic of 

the Philippines 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 

the Republic of the Philippines with respect to the account;

d) Withdrawals are conditioned on reaching a specified retirement 

age, disability, or death, or penalties apply to withdrawals made 

before such specified events; and

e) Either (i) annual contributions are limited to $50,000 or less, 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 the 

Republic of the Philippines (other than an insurance or Annuity Contract) 

that satisfies the following requirements under the laws of the Republic of 

the Philippines.

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 the Republic of 

the Philippines are deductible or excluded from the gross income 

of the account holder or taxed at a reduced rate, or taxation of 
12

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

d) Annual contributions are limited to $50,000 or less, 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 the Republic of the Philippines 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 the Republic of the 

Philippines 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 the Republic of the Philippines 

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:
13

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 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 the Republic of the 

Philippines 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-
14

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 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.