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STAATSSECRP.TARIS VAN PlNANC1EN 

The Hague, 18 December 2013 

Mr. Charged' A ffaires, 

f have the honor to confirm receipt of your Note oftoday's date which reads as follows: 

"I have the honor to refer to the Agreement between the United States of America and the 

Kingdom of the Netherlands to Improve International Tax Complicmce and to Implement FATCA 

(hereafter referred to as 'the Agreement') signed today and to propose on behalf of the 

Government of the United States the following: 

In the course of the negotiations of the Agreement signed today> the negotiators developed the 

Memorandum of Understanding that is attached to this note. The Memorandum of 

Understanding reflects the shared understanding regarding the interpretation of certain 

provisions ofthe Agreement reached by the delegations of the United States and the Netherlands 

on behalf of their respective governments. 

The UnitedStates understands that the Netherlands plans to present the Agreement to its 

parliament for its approval in 2014 and, to propose implementing legislation with the goal of 

having the Agreement enter into force by September 30, 2015. Based on this understanding, as of 

the date of signature of the Agreement, the United States Department of the Treasury inlends to 

treat each Netherlands Financial Institution, as that term is defined in the Agreement, as 

complying with, and not subject to withholding under section 1471 of the US. Internal Revenue 

Code during such time as the Netherlands is pursuing the necessary internal procedures for 

entry into force of the Agreement. The United States further understands that the Netherlands 

MiniSt1y ofFinance intends to contact the United States Department of the Treasury as soon as it 

is aware that there might be a delay in the Netherlands internal approval process for entry into 

force of the Agreement such that the Netherland<; would not be able to provide its notification 

under paragraph 1 ofArticle 10 of the Agreement prior to September 30, 2015.lfupon 

consultation with the Netherlands, the United States Department of the Treaswy receives 

credible assurances that such a delay is likely to be resolved in a reasonable period of time, the 

United States Department of the Treasury may decide Lo continue to apply FATCA to 

Netherlands Financial Institutions in the manner described above as long as the United States 

Department of the Treasury assesses Lhat the Netherlands is likely to be able to send its 

not[frcation under paragraph 1 of Article 10 by September 30, 2016. II is understood that should 

the Agreement enter into force after September 30, 2015, any information that would have been 

reportable under the Agreement thereafter (and prior to its entry into force) had the Agreement 

been in force by September 30, 2015, is owed on the September 30 next following the date of 

entry into force. 

The United States notes that both the United States and the Netherlands provide high Levels of 

data protection with information they receive in the exchange of information in tax matters, as 

confirmed in the Peer Reviews in the context of the Global Forum on Transparency and 

Exchange of Information for Tax Purposes. Pursuant to paragraph 7 ofArLicle 3 of the 
STAATSSECRIITARIS VAN FlNANCIEN 

Agreement, the information e.xchangedunder the Agreement is subject to !he confidentiality and 

other protections provided for in the Convention between the United States of America and the 

Kingdom of the Netherlands for the Avoidance of Double Taxation and the Prevention ofF;scal 

Evasion with Respect to Taxes on Income, done at Washington onl8 December 1992, as 

amended on 13 October 1993 and 8 March 2004 ("Double Tax Convention ") and the 

Convention on Mutual Administrative Assistance in Tax Matters, done at Strasbourg on 25 

January 1988 ("the Mutual Assistance Convention"). Those protections include those set out in 

paragraph 1 sentences 3 through 7 of Article 30 of the Double Tax Convention and Article 22 of 

the Mutual Assistance Convention. In the con/ext of the implementation of the Agreement, the 

competent authorities are expected by mutual arrangement to establish procedures on data 

protection specific to the exchange of information under the Agreement. 

if the above understandings, including those set forth in the attached Memorandum of 

Understanding are acceptable to the Government of the Netherlands, this note and your note 

reflecting such acceptance memorialize the understandings that our two Governments have 

reached. " 

I have the honor to inform you, that the Netherlands shares the understandings referred to in your 

Note. 

Accept, Mr. Charge d'Affaires, the expression of my highest consideration. 

ADAM STERLlNG 

Charged' A ffaires ad interim 

FRANS WEEKERS 

State Secretary for Finance 
Excellency, 

EMBASSY OF THE 

UNITED STATES OF AM R CA 

December 18, 2013 

I have the honor to refer to the Agreement between the United States 

of America and the Kingdom of the Netherlands to Improve International 

Tax Compliance and to Implement FA TCA (hereafter referred to as 'the 

Agreement') signed today and to propose on behalf of the Government of 

the United States the following: 

In the course of the negotiations of the Agreement signed today, the 

negotiators developed the Memorandum of Understanding that is attached to 

this note. The Memorandum of Understanding reflects the shared 

understanding regarding the interpretation of certain provisions of the 

Agreement reached by the delegations of the United States and the 

Netherlands on behalf of their respective governments. 

The United States understands that the Netherlands plans to present 

the Agreement to its parliament for its approval in 2014 and, to propose 

implementing legislation with the goal of having the Agreement enter into 
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force by September 30, 2015. Based on this understanding, as ofthe date of 

signature of the Agreement, the United States Department of the Treasury 

intends to treat each Netherlands Financial Institution, as that term is defined 

in the Agreement, as complying with, and not subject to withholding under 

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

Netherlands is pursuing the necessary internal procedures for entry into 

force of the Agreement. The United States further understands that the 

Netherlands Ministry of Finance intends to contact the United States 

Department of the Treasury as soon as it is aware that there might be a delay 

in the Netherlands internal approval process for entry into force of the 

Agreement such that the Netherlands would not be able to provide its 

notification under paragraph 1 of Article 10 of the Agreement prior to 

September 30, 2015. If upon consultation with the Netherlands, the United 

States Department of the Treasury receives credible assurances that such a 

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

States Department of the Treasury may decide to continue to apply F ATCA 

to Netherlands Financial Institutions in the manner described above as long 

as the United States Department of the Treasury assesses that the 

Netherlands is likely to be able to send its notification under paragraph 1 of 

Article 10 by September 30, 2016. It is understood that should the 
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Agreement enter into force after September 30, 2015, any information that 

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

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

owed on the September 30 next following the date of entry into force. 

The United States notes that both the United States and the 

Netherlands provide high levels of data protection with information they 

receive in the exchange of information in tax matters, as confirmed in the 

Peer Reviews in the context of the Global Forum on Transparency and 

Exchange of Information for Tax Purposes. Pursuant to paragraph 7 of 

Article 3 of the Agreement, the information exchanged under the Agreement 

is subject to the confidentiality and other protections provided for in the 

Convention between the United States of America and the Kingdom of the 

Netherlands for the Avoidance of Double Taxation and the Prevention of 

Fiscal Evasion with Respect to Taxes on Income, done at Washington on 18 

December 1992, as amended on 13 October 1993 and 8 March 2004 

("Double Tax Convention") and the Convention on Mutual Administrative 

Assistance in Tax Matters, done at Strasbourg on 25 January 1988 ("the 

Mutual Assistance Convention"). Those protections include those set out in 

paragraph I sentences 3 through 7 of Article 30 of the Double Tax 
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Convention and Article 22 of the Mutual Assistance Convention. In the 

context of the implementation of the Agreement, the competent authorities 

are expected by mutual arrangement to establish procedul"es on data 

protection specific to the exchange of information under the Agreement. 

If the above understandings, including those set forth in the attached 

Memorandum of Understanding are acceptable to the Government of the 

Netherlands, this note and your note reflecting such acceptance memorialize 

the understandings that our two Governments have reached. 

Accept, Excellency, renewed assurances of my highest consideration. 

Enclosure: Memorandum of Understanding 

His Excellency 

Frans Weekers 

State Secretary for Finance of the Netherlands 
Memorandum of Understanding 

Understanding regarding the Agreement between the United States of America and 

the Kingdom of the Netherlands to Improve International Tax Compliance and to 

Implement FATCA (hereafter referred to as 'the Agreement'), signed today. 

In reference to the term 'resident' 

In the case of the Netherlands, the term 'resident' means a resident of the 

Netherlands within the meaning of Article 4 of the General Tax Act (Algemene wet 

inzake rijksbelastingen). For the purposes of the preceding sentence, a Financial 

Institution that is fiscally transparent under the laws of the Netherlands is regarded 

as a 'lichaam ' (body corporate). 

In reference to Article 1 of the Agreement (Definitions) 

1. It is understood that a Fund for Mutual Account (fonds voor gemene rekening) 

is a legal arrangement as referred to in paragraph 1 (hh) of Article 1 of the 

Agreement. 

2. It is understood that a Stichting Administratiekantoor (STAK) established in the 

Netherlands is treated as an NFFE. In the case of a STAK the interests in which 

are regularly traded on an established securities market, the STAK is to be 

treated as an Active NFFE. In all other cases the STAK is to he treated as a 

Passive NFFE. 

3. It is understood that the following entities are not regarded by a maintaining 

Financial Institution as an Account Holder or as a Financial Institution if the 

investment fund or investment firm as mentioned in a. or b. is treated by such 

maintaining Financial Institution as the Account Holder with respect to the 

assets held by such entities: 

a. A depositary (bewaarder) that holds the legal ownership of an investment 

portfolio of an investment fund (beleggingsfonds) (e.g. , a mutual fund for 

joint account) for and on behalf of the investors within the meaning of 

Article 4:44 of the Financial Supervision Act (Wet op hetfinancieel 

toezicbt), or a depository within the meaning of Article 21 of the 

Alternative Investment Fund Managers Directive. 
b. A bewaarinstelling or bewaarbedrijf established by an investment firm as 

a depositary to comply with asset segregation requirements of Articles 

6: 17 or 6: 18 of the Further Regulation on Conduct of Business 

Supervision of Financial Undertakings (Nadete regeling gedragstoezicht 

financiele ondernemingen ). 

4. It is understood that an account held by a foundation (Stichting Derdengelden) 

is not a U.S. Reportable Account or as an account held by a Nonparticipating 

Financial Institution (as those terms are defmed in the Agreement) if the assets 

of the foundation (Stichting Derdengelden) serve solely as an escrow for a debt 

or purchase obligation of the transferor of the assets to the foundation (Stichting 

Derdengelden ). 

5. With reference to paragraph (s)(1) of Article 1 of the Agreement, it is 

understood that NYSE Euronext Amsterdam qualifies as an established 

securities market. 

6. It is understood that paragraph 7 of Article 4 of the Agreement applies to all the 

definitions in Article 1 of the Agreement, including, for example, the definitions 

of Preexisting Account and of Financial Account. 

In reference to paragraph 1 of Article 5 of the Agreement (direct inquiry by a 

Competent Authority) 

It is understood that no new obligations or responsibilities other than currently in 

practice under the Double Tax Convention and the Mutual Assistance Convention, 

are introduced when the Competent Authority of such other Party applies its 

domestic law (including applicable penalties) to obtain corrected and/or complete 

information or to resolve other infringements of this Agreement. 

In reference to paragraph B of Section Ill of Annex I of the Agreement 

It is understood that a Reporting Netherlands Financial Institution is not required to 

obtain a second self-certification with respect to a New Individual Account if it 

already possesses a self-certification with respect to the Account Holder, except 

where there has been a change of circumstances as described in paragraph D of 

Section III of Annex I. 

In reference to paragraph B of Section I of Annex II of the Agreement 
It is understood that International Organizations are solely intergovernmental 

organizations, including supranational organizations. 

In reference to possible future optional direct reporting to the IRS 

It is understood that nothing in the Agreement would obligate the Netherlands to 

permit an entity resident in the Netherlands to report directly to the U.S. Internal 

Revenue Service if in the future U.S. Treasury regulations were to make that 

option possible where such reporting would be contrary to Netherlands law.