1. FROM PRINCIPLES TO PLANNING FATCA – What You Need to Know FROM PRINCIPLES TO PLANNING

2. Introduction SOURCE OF LAW?  FATCA: Foreign Account Tax Compliance Act enacted in 2010  Purpose: Curb tax evasion  Proposed Regulations: February 2012  Final Regulations: January 2013  Worldwide scope of implementation with or without the signature of an International Governmental Agreement (“IGA”) WHO IS CONCERNED?  Foreign Financial Institutions (“FFIs”) and Non Foreign Financial Entities (“NFFEs”) with more than 50% of passive income  Multinational Corporations (“MNCs”)  U.S. Withholding Agents (“USWAs”) WHAT OBLIGATION?  Reporting to the IRS of U.S. Account holders (for FFI) and of U.S. holders of a substantial ownership interest (for NFFE)  Potential for 30% FATCA withholding for non-compliance

3. Introduction WHEN?  Starting January 1, 2014 for ordinary income (FDAP, dividends, interests, wages, annuities, rents, royalties…) and January 1, 2017 for gross proceeds, foreign pass thru payments and grandfathered obligations WHERE?  Registration through the FATCA Portal in place on July 15, 2013 or filing the New Form 8957 to obtain a Global Intermediary Identification Number (“GIIN”) as a Participating FFI (“PFFI”) to be identified as FATCA compliant HOW?  Reporting to the IRS through the New Forms 1042 and 1042-S (to encompass both Chapter 3- NRA and Chapter 4-FATCA)  Reporting to the IRS using the new Form 8966 for reporting specified U.S. persons, U.S. owned foreign entities, owner-documented FFIs with an owner that is a specified U.S. person and aggregate reporting for recalcitrant account holders  Document the account holder for tax purposes through Forms W-8series & Form W-9 WHY?  Reputational concerns  Avoid negative client impact and potential for liquidity issues  To avoid the punitive 30% FATCA withholding

4. 321 Agenda DD & Verif. Proced.Forms W-8seriesFATCA Overview  Purpose  Definitions  Prevention of 30% Withholding  Exclusions  Intergovernmental Agreements (IGAs)  IRS Registration  Responsible Officer  DD obligations  Timeline  Implementation Strategies  Chapter 3 Withholding Rules  Chapter 4 - FATCA  W-8BEN  W-8IMY

5. FATCA Overview  Purpose  Definitions  Prevention of 30% Withholding  Exclusions  Intergovernmental Agreements (IGAs)

6. What is the Purpose of FATCA? What Is FATCA? FATCA is U.S. legislation enacted in 2010 which aims to prevent U.S. persons from using foreign accounts and foreign entities to evade taxes. It requires withholding agents, including Foreign Financial Institutions (FFIs) and certain Non-Financial Foreign Entities (NFFEs) to withhold a 30% U.S. tax with respect to any “withholdable payment” or foreign pass thru payment made to another foreign entity or a recalcitrant account holder unless the foreign entity (i) complies with the FATCA due diligence and reporting requirements or (ii) qualifies for an exemption from these provisions and/or (iii) unless the account becomes documented. Withholding under FATCA is separate and distinct and is in addition to the current withholding regime under the Code (Chapter 3 NRA withholding). Although FATCA seeks to find U.S. persons hiding behind foreign accounts and entities, the presumption is negative, so that unless the FFI complies with FATCA or unless the NFFE provides satisfactory information, the entity is presumed to be owned by U.S. persons and the 30% withholding is triggered.

7. FATCA Terminology Accepts deposits in the ordinary course of business

8. FATCA Terminology (cont’d)

9. WeiserMazars’ conclusion:  Financial groups with NPFFI or limited FFI will not be able to use holding companies to shelter payments from FATCA withholding.  SPVs and other holding companies that are part of EAG of certain investment entities will fall under the FFI definition. However, holding companies that are part of a nonfinancial group or are not part of other FFIs will likely be exempt from FFI status – Although, these entities can be considered Passive NFFEs. Holding Companies and/or Treasury Centers as FFI Part of an expanded affiliated group (“EAG”) that includes a (i) depository institution (ii) custodial institution (iii) certain insurance companies (iv) an investment entity Is formed in connection with or availed of by a collective investment fund, mutual fund, exchange traded fund, hedge fund, private equity fund, etc. -OR-

10. FATCA Terminology (cont’d) FFI NFFE Dividends, Interest, Rents, Annuities, any other FDAP (Fixed, Determinable, Annual or Periodical income) + Gross Proceeds (not merely gains) from the sale of property that produces interest and dividends Is there an exclusion for certain withholdable payments? Important Exclusions Withholdable Payments – An Expanded Scope of U.S. Source Income Dividends, Interest, Rents, Annuities, any other FDAP (Fixed, Determinable, Annual or Periodical income) + Gross Proceeds (not merely gains) from the sale of property that produces interest and dividends ECI – Income Effectively Connected with U.S. Trade or Business (unless income is exempt under the tax treaty). Excluded nonfinancial payments for non financial goods or services and the use of property. Short term obligations. Grandfathered obligations, generally debt instruments, certain other legal documents with fixed terms, instruments that can produce dividend equivalent amounts and certain collateralized agreements that are issued or executed before Jan. 1, 2014. BEWARE – IF THE CHARACTER OR SOURCE IS UNKNOWN IT IS PRESUMED TO BE A WITHHOLDABLE PAYMENT FROM U.S. SOURCES – WITHHOLDING AGENT CAN EITHER START WITHHOLDING OR DEPOSIT IN ESCROW ACCOUNT FOR ONE YEAR UNTIL THE DUST SETTLES.

11. FATCA Terminology (cont’d) Financial Account Pursuant to Final Regulations Custodial and depository accounts of an entity that is engaged in banking or similar activity WeiserMazars’ conclusion:  Depository account is clarified to include accounts that are maintained by financial institutions that are engaged in banking or a similar activity.  Financial accounts are clarified to include interests in certain investment entities. The final regulations clarify when such interests are considered a financial account, e.g., in case of interest in holding companies of FFI groups. Debt and equity interest in a holding company or a treasury center provided certain requirements are met Debt and equity interest in certain investment entities Debt and equity interest in a custodial and/or depository institution or insurance company provided that certain requirements are met Financial account needs to be held by a specified U.S. Person or U.S. Owned Foreign Entity.

12. Prevention of 30% WH for an FFI FFI would have to become participating to avoid 30% withholding: An entity classified as an FFI, such as broker/dealers, foreign banks and credit unions will be required to enter into an agreement with the IRS under which it would have to: Obtain information from investors to determine which are U.S. accounts, e.g., accounts held by U.S. citizens, green-card holders, or entities substantially owned by U.S. persons. Substantially owned applies a “more than 10%” threshold, however, for investment entities a 0% threshold is applied. Comply with specified verification and due diligence procedures relating to its investors. Report annually certain information with respect to U.S. accounts that it maintains. Deduct and withhold a 30% tax on any passthru payment made to a recalcitrant account holder or another Non-Participating FFI; Comply with requests for additional information on accounts ; and – Attempt to obtain a waiver if foreign law prevents reporting and if a waiver is not obtained, to close the accounts. If the FFI is in a country that is party to an Intergovernmental Agreement, then the FFI is considered deemed compliant but would have to significantly comply with the terms of the agreement. Significant noncompliance may result in the classification of the non-compliant FFI as non- participating.

13. Prevention of 30% WH for an NFFE NFFE would have to provide information or certify to the withholding agent its exempted status: To provide information on U.S. substantial ownership or to certify eligibility for an exemption or lack of U.S. substantial ownership. A 30% withholding will not be required if: The NFFE certifies to the withholding agent that it has no substantial U.S. owners (a more than 10% threshold both directly or indirectly); IMPORTANT: The Final Regulations do NOT adopt the IGA controlling person approach (typical KYC 25%) so there is more pressure to enter into an IGA to receive more favorable terms. The NFFE provides the withholding agent the information with respect to U.S. owners; The NFFE belongs to a class of NFFE that are considered “Excepted NFFE”; OR The NFFE belongs to class of entities that are excluded FFI and NFFE. Excepted NFFE – Include: Publicly traded entities and expanded affiliate group members; Certain entities listed in a U.S. possession or wholly owned by residents in a U.S. possession; Certain excepted nonfinancial entities (such as certain holding companies, treasury centers, start up companies and certain entities that emerge from liquidation or reorganizing); Active NFFE.

14. Active NFFE - Important Exception Active NFFE: <50% of gross income is passive, and/or– <50% of assets are of a kind that produce or are held for production of passive income Broad definition of “Passive Income” includes:  Dividends including dividend substitutes;  Interest;  Rents and royalties;  Annuities;  Net gain from sale of property that generates passive income; commodities-type transactions; and foreign currency;  Death benefits;  Amounts received from pool of insurance; and/or-  Net income from notional principal contracts. Valuation of assets – Weighted average percentage assets (tested quarterly). Valuation is based on fair market value or book value of assets of the NFFE balance sheet. Exceptions from passive income treatment: Look-thru rule: interest, dividends, rents or royalties received from a related person to the extent that is properly allocable to non-passive income of such related person ; Income earned by dealers acting in the ordinary course of their business as regards forward and option contracts and other similar financial instruments such as notional principal contracts and instruments referenced to commodities.

15. Exclusions  Deemed-Compliant FFIs: – Categories: Registered deemed-compliant – Required to register with the IRS and meet certain procedural requirements – Examples: » An FFI or a branch of FFI, that is a reporting model 1 FFI and complies with the registration requirements; » Qualified credit card issuers; » Local FFIs, and » Non-reporting members of affiliated FFIs. Certified deemed-compliant – Only needs to certify its status on the requisite Form (W-8) to the withholding agent – Examples: » Non-registered local banks with limited assets; » A sponsored investment entity and controlled foreign corporation; and » FFIs with low value accounts. Owner documented FFIs (ODFFI) Deemed-compliant FFIs would be treated as participating FFIs without the need to enter into an agreement with the IRS and comply with all of the FFI requirements.

16. Exclusions & Exceptions - Illustrative Whether the FFI or NFFE is exempt from Whether the FFI or NFFE is exempt from FATCA ? FFI / NFFE NFFE or FFI ? Nonfinancial group entities and captive financing entities Start up companies and Companies changing line of business Nonfinancial entities that are liquidating or reorganizing Inter-affiliate FFI (the “passthru affiliate”) Deemed- Compliant FFI ? Excepted NFFE ? In addition, excepted entities include tax exempt entities pursuant to Sec. 501(c) and non-profit organizations if certain requirements are met.

17. Avoidance of 30% Withholding FATCA applies to both FFIs and NFFEs To avoid the 30% withholding requirement, FFIs must To avoid the 30% withholding requirement, NFFEs must Enter into agreement with the IRS -OR – Significantly comply with an applicable Intergovernmental Agreement -OR- Register with the IRS or, in certain cases, to certify to the withholding agent that the FFI qualifies as a deemed-compliant FFI Certify that it has no substantial (or controlling in case of an IGA) U.S. Owners -OR- Provide information on such U.S. owners -OR- Certify that the NFFE qualifies for an exception or an exclusion Failure to take the affirmative steps outlined above would trigger 30% withholding

18. Intergovernmental Agreements  The implementation of FATCA Model Intergovernmental Agreements (IGAs) between the U.S. and FATCA Partner Jurisdictions will permit Partner FFIs to comply with FATCA without violating local law.  There are 2 model IGAs: – Model I contains both reciprocal and non-reciprocal reporting to the local government; – Model II will require reporting directly to the Internal Revenue Service (IRS).  IGAs negotiated with 75 countries – 6 IGAs signed: Model 1: UK, Mexico, Denmark, Ireland and Norway Model 2: Switzerland – Agreed but not yet released: Germany, Italy, and Spain – Actively negotiating with conclusion expected soon: Canada, Finland, France, Guernsey, Isle of Man, Japan, Jersey, Bermuda, and the Netherlands – Actively engaged in dialogue: Argentina, Australia, Belgium, the Cayman Islands, Cyprus, Estonia, Hungary, Israel, Korea, Liechtenstein, Malaysia, Malta, New Zealand, the Slovak Republic, Singapore, Sweden, Bahamas, India, Taiwan and BVI  Treasury is exploring options: Brazil, Chile, Czech Republic, Gibraltar, Lebanon, Luxembourg, Romania, Russia, Seychelles, St-Martin, Slovenia, and South Africa.  No IGA: Asia, South America, South Africa… Extraordinary effort to get ready  Tax Havens (e.g., Cayman Islands, BVI)  Financial Action Task Force (“FATF”) Recommendations

19. Intergovernmental Agreements (cont'd) OUR OBSERVATION: – Not entirely relieved - IGA FFI still required to withhold on payment to NPFFI: U.S. financial institutions and FFIs should realize that the Model I and II Frameworks do not result in a significant lessening of compliance burdens, although cost-effectiveness is increased. Due diligence and reporting, whether to the IRS or a local governmental authority, will still be required. Further, FATCA withholding will still be required for FFIs in IGA countries if they make payments to non-participating FFIs in non-IGA countries. – IGA may create more complexity for multinational FFI and NFFE that operate in several jurisdictions: The IGAs may result in more complexity, particularly with respect to multinational financial institutions that operate in multiple countries that are parties to Model I, Model II and/or countries that do not have an agreement with the U.S. – May be subject to additional rules specific to certain jurisdictions. – More than one reporting type per affiliated group. – Reliance on common definitions resulted in an expanded inclusion of entities: The reliance on the definition of the Financial Action Task Force Recommendations rather than FATCA proposed regulations is a welcome change for the industry as it creates more clarity as to definitions already used in the foreign jurisdictions. However, the new definition seems a bit more expanded as it includes investment manager entities in the definition of an FFI. – Rushed internal legislation and conclusion of treaties: Timely implementation requires bilateral tax agreements to be quickly negotiated and adopted.

20. DD & Verification Procedures  IRS Registration  Responsible Officer  DD obligations  Timeline

21. IRS Registration  FFI Registration and Global Intermediary Identification Number (“GIIN”): – For Non-IGA Countries and for certain Model 2 IGA negotiations, the FFI will have to enter into a FFI Agreement with the IRS. A Revenue Procedure is intended to be issued that will contain all the terms and conditions applicable to the FFI agreement. – The IRS Portal (“Portal”) for an FFI Registration will be available on July 15, 2013. FFI Agreements will take effect on January 1, 2014. The Portal will be the primary means for financial institutions to interact with the IRS. – By registering, the FFI agrees to their obligations as PFFI or as sponsoring FFI or to act as a limited or registered deemed-compliant FFI. – Upon approval, the IRS will issue a Global Intermediary Identification Number (“GIIN”). These GIIN will be assigned no later than October 15 th, 2013 and will be used as the institution’s identifying number for satisfying its reporting requirements and identifying its status to the withholding agent. – A financial institution registering through the Portal will agree to comply with the FFI agreement pertaining to its particular situation. All FFIs will be able to manage their accounts through the Portal. A Multinational FFI that is a resident of Model 1 agreement will be able to register once and enter into an agreement with the IRS on behalf of its affiliated entities that are not residents of Model 1 agreement. –Existing Qualified Intermediaries (“QI”), Withholding Partnerships (“WP”) and Withholding Trusts (“WT”) will be required to renew their QI agreements by registering on the Portal and agreeing to comply with the modified QI agreement. A Revenue Procedure will be published prior to registering to outline the modified provisions of the agreement.

22. Responsible Officer Responsible Officer (RO): – The Final Regulations expand the scope of the FATCA Compliance Program and the role of the RO. – Each FFI must appoint a FATCA – RO who certifies compliance under penalty of perjury. Alternately, all or some of the FFIs in an EAG may adopt an RO of the compliance FFI. This is an administrative benefit particularly for funds. RO is identified in the FATCA registration system and will apply for a FATCA-EIN now entitled global intermediary identification number (“GIIN”) RO signs the FFI agreement via the IRS Portal or a hard copy – The Final Regulations require both initial and ongoing certification whereby the RO certifies that: The PFFI has established a compliance program; that there are no material failures and if failures are identified that they have been remediated and steps taken to prevent future reoccurrences (upon effective date of FFI Agreement and every 3 years). From August 6, 2011 to the date of certification, there were no formal or informal procedures in place to assist account holders in avoidance of Chapter 4 provisions; The FFI completed the review of high value accounts and all other preexisting accounts (due 60 days following the 2 nd year effectivity of the FFI Agreement). Certifications will be filed via the Portal. Comment: There is a strong need for a third party advisor to ensure FATCA compliance due to impact on numerous areas of the firm (e.g., on-boarding, reporting) prior to self-certifications.

23. Due Diligence Standard of Reason To Know: – The final regulations permit withholding agents to rely on claim of status as a participating or registered deemed- compliant FFI based on checking the payee’s GIIN against the published FFI list. – Withholding agent’s reliance on documentation requires either ACTUAL or IMPUTED reason to know that the documentation is incorrect. – Withholding agent would be considered to have reason to know that the documentation is incorrect if: The withholding certificate is incomplete; The withholding certificate is inconsistent with the payee’s claims; The withholding agent has other account information that is inconsistent with the payee’s claim; OR The withholding certificate does not provide sufficient information to establish withholding. – For example, the following indicia will cause a withholding agent to know that a withholding certificate is unreliable and/or incorrect: A U.S. address or telephone number; A U.S. place of birth ; Standing instruction of an offshore obligation to a U.S. address or a U.S. account. – The conflict can be remedied with documentary evidence and a withholding certificate that supports the right withholding claim.

24. Due Diligence (cont’d) Final Regulations Impact on Documentation Requirements: – Specific documentation requirements for different types of payees is retained. – Further differentiation based on whether account is onshore (generally require Form W-9) or offshore (Forms W-8 or self certifications/other documentation). – Additional standards for new accounts vs. preexisting accounts. – Liberalization of documentation standards to include industry suggestions (e.g., third party documentation-shared documentation agency systems, third-party data providers, introducing broker certifications, certain credit reports, and industry coding of preexisting accounts). – Bulk acquisition/merger 6 month reliance of transferor’s Chapter 4 status determination. – Reliance of pre-FATCA and sunset period for new FATCA Forms W-8 may suggest withholding agents to re-solicit tax forms within the next 6 months. – IGA Annex 2 due diligence procedures require further clarification. – Document expiration extended and additional permanent documentation identified. Forms and tax documentation for certain “low risk” accounts can remain valid indefinitely based on fact specific conditions. – Establishment of certain enhanced verification categories (e.g., annual GIIN re-verification, $1Million Accounts, and Active NFFEs). – Reinstatement of the Eyeball Test under the presumption rules to treat a payee as other than a specified U.S. person (only for USFIs).

25. Due Diligence (cont’d)

26. Important Deadline Timeline 2013201420152016 2017

27. Important Deadlines July 15 th, 2013:  FFI web portal opens for registration. October 15 th, 2013  IRS begins issuing Global Intermediary Identification Numbers (“GIIN”) to registered FFIs. FFIs can start providing information on sponsored FFIs. October 25 th, 2013  Last day by which a financial institution can register with the IRS to ensure its inclusion on published list of compliant FFIs. December 2 nd, 2013:  Initial list of FFIs to be published. December 31 st, 2013:  Last day of issue of “grandfathered obligations.”  FFI agreement becomes effective. January 1 st, 2014:  Implementation of new account on-boarding procedures.  U.S. source FDAP withholding begins on new account holders identified as NPFFIs, Recalcitrant, and Passive NFFEs.  Effective date of FFI agreement for all PFFIs that have received a GIIN that establishes the PFFI’s FATCA status for withholding purposes and identifies the PFFI to the IRS for reporting obligations. March 31 st, 2015:  FATCA reports for calendar year 2013 and 2014 are due and should include account holder’s name, taxpayer TIN, number and balance. Forms 1042, 1042- S and 8966. January 1 st, 2016:  The transition period for expanded affiliated group (EAG) expires. “All or nothing’’ rule kicks in. January 1 st, 2017:  FATCA withholding on gross proceeds begins*  Withholding on foreign passthru payments will not begin before January 1 st, 2017. *Gross Proceeds withholding remains theoretical and the Final Regulations reserve on the implementation rules.

28. Transitional Relief for WH Agents Preexisting Obligations/Accounts*:  Withholding agents are not required to withhold on payments made before Jan. 1 st, 2015 with respect to a preexisting obligation to a payee that is not a “Prima Facie” FFI and for which a withholding agent does not have documentation indicating the payee’s status as a “Passive NFFE” with one or more substantial U.S. owners.  A withholding agent is not required to withhold on payment prior to Jan. 1 st, 2016 with respect to a preexisting obligation held by an FFI for which the withholding agent does not have documentation indicating the payee’s status as a NPFFI, unless “Prima Facie” FFI.  Participating FFIs and withholding agents can document their account holders that are not “Prima Facie” FFI until Dec. 31 st, 2015. “Prima Facie” FFI**:  Withholding agents will have to treat a “Prima Facie” FFI as a NPFFI beginning July 1 st, 2014 and begin withholding on payments until documentation is obtained to establish compliance. *Generally, a pre-existing obligation refers to a financial instrument that is held in account with the withholding agent on Dec. 31 st, 2013. **A “Prima Facie” FFI can include banks, brokerage securities and custodianship.

29. Implementation Strategies  Automation to implement an electronic due diligence system  Outsourcing to deal with the complexity in reporting  Operationalizing FATCA requirements  Setting Priorities – Establish a compliance program including the appointment of a Responsible Officer; – Create an account due diligence strategy and implement new account opening procedures; – Develop and implement a withholding solution or functionality; and – Evaluate reporting needs.

30. FATCA Matters In Motion

31. Forms W-8 series  Chapter 3 Withholding Rules  Chapter 4 - FATCA  W-8BEN  W-8IMY

32. Chapter 3 Withholding Rules on Nonresident Aliens & Foreign Corporations Foreign persons/entities are subject to US tax at generally a 30% flat tax rate on certain income received from US sources: Interest Dividends Rents Royalties Annuities Other fixed or determinable annual or periodic gains/profits or income “FDAP income” 32

33. Chapter 3 Withholding Rules (cont'd) Generally, the withholding agent is required to deduct and withhold 30% on payments made to persons of FDAP income unless: payee provides W-9 to establish US status; or foreign payee assumes withholding responsibility by providing withholding agent with a W-8IMY. Withholding agent may rely on forms provided by payee. Reduced withholding may apply to payments made to a foreign beneficial owner pursuant to applicable treaty provision 33

34. Chapter 3 Withholding Rules (cont'd) Withholding Agent Any person, US or foreign, who has control, receipt or custody of a payment or disbursement of an amount subject to withholding (FDAP income) is a “withholding agent”. individual Corporation, partnership, trust Certain foreign intermediaries Certain foreign banks and insurance companies If the withholding agent does not obtain documentation to show payees status, agent is liable for the taxes otherwise required to be withheld. 34

35. Chapter 3 Withholding Rules (cont'd) Withholding Agent Presumptions-- Absence any documentation, a withholding agent must use the following presumptions when making a ‘withholdable’ payment: Generally, payments made outside of the US are presumed to be made to a foreign payee. Payments for services outside the US are presumed to be made to a foreign payee (if not known to be ECI). 35

36. Chapter 4— “FATCA” Foreign Account Tax Compliance Act The concept behind the FATCA rules is to enforce tax compliance by US persons with overseas accounts. A participating FFI must identify all of its US accounts and comply with other due diligence. FFI must withhold on non-compliant FFIs/NFFE payments or other recalcitrant account holders. Withholding agent must withhold 30% of payment to non-participating FFIs or NFFEs. FATCA increases due diligence and account reporting far beyond prior reporting to withholding agent. 36

37. Chapter 4 FATCA—(cont'd) Due diligence and withholding requirements for withholding agents (including certain participating FFIs) will be determined by certification forms W-9, W-8 series. Generally, beneficial owners of payments are entitled to refunds for any overpayment actually due per the Code, but an FFI only receives refund if required by treaty. No credit/refund if account holder information not provided. 37

38. W-8BEN—Draft as of May 31, 2012 Only to be used by a foreign individual (not a citizen or resident alien of the US); DO NOT use the form if: An entity—use W-8BEN-E A US citizen or resident alien—use W-9 A foreign beneficial owner of income that is effectively connected to a US trade or business—use W-8ECI A foreign beneficial owner of income from compensation for personal services performed in the US—use Form 8233 or W-4 A foreign person acting as an intermediary—use W- 8IMY 38

39. W-8BEN—(cont'd) DO NOT use the form if: A Disregarded entity with single US person owner—use W-9 Receiving income effectively connected to a US trade or business—use W-8ECI Foreign trust or partnership—use W-8IMY 39

40. W-8BEN—(cont'd) Part I— Line 6: SSN or ITIN. Filer MUST provide ITIN if: Claiming exemption from withholding under § 871(f) for certain annuities; Foreign grantor trust with 5 or fewer grantors; Claiming benefits under an income tax treaty; or Submitting form to partnership that conducts a trade or business in the US. 40

41. W-8BEN—(cont'd) Part I— Line 7: enter tax ID number in country of tax residence. Line 8: referencing information for withholding agent, such as account number or other information to help withholding agent. Part II— Line 8 and 9: list country of tax residency. List article and paragraph and withholding amount pursuant to treaty. 41

42. W-8BEN—E Draft as of May 31, 2012 Only to be used by a foreign Entity Part I line 3—Chapter 3 status Grantor trust, partnership, estate, other entity Part I line 4—Chapter 4 status 22 separate status types: FFI—participating/ non-participating/ Registered deemed compliant/owner – documented—, etc. NFFE—publicly traded; affiliate; active; passive; etc. Generally, one box is checked for each chapter type. 42

43. W-8BEN—E (cont'd) Part II—Treaty Benefits Part III—notional principal contracts Part IV-XXIII—Chapter 4 status Certification under penalties of perjury. 43

44. W-8IMY Draft August 13, 2012 Form used to show intermediary status—not the beneficial owner of the payment. Form should not be used by: Beneficial owner –use W-8BEN Hybrid entity claiming treaty benefits—use W- 8BEN ECI income—use W-8ECI Disregarded entity—use W-8BEN of owner US taxpayer—use W-9 44

45. W-8IMY (cont'd) Part I –Identification of entity—Entity type Line 3—Chapter 3 status Line 4—Chapter 4 status Chapter 3 Definitions: Qualified Intermediary—has entered into a withholding agreement with IRS Will provide withholding agent with withholding statement May or may not take primary withholding responsibility (ck appropriate box). 45

46. W-8IMY (cont'd) Chapter 3 Definitions (cont'd): Nonqualified Intermediary—no agreement with IRS No withholding responsibility Will provide withholding certificates/statements for beneficial owners. US branch subject to certain regulatory requirements Branch of FFI will be treated as US person or Will provide withholding documentation/statements 46

47. W-8IMY (cont'd) Chapter 3 Definitions (cont'd) Withholding foreign partnership/trust Withholding—entered into agreement with IRS Will assume primary withholding responsibility Non-withholding foreign partnership/trust no agreement with IRS includes foreign simple trust/grantor trust. Income not ECI Will provide withholding certificates/statements to agent. 47

48. W-8IMY (cont'd) Chapter 4 definitions: Nonparticipating FFI—will provide withholding certificates/statement of BOs. Participating FFI/registered deemed compliant has FATCA ID Not a ltd branch or local FFI Assumed primary withholding Owner documented FFI US institution or participating FFI agrees with owner documented status Partnership or grantor trust Not intermediary Not a bank, etc. 48

49. W-8IMY (cont'd) Chapter 4 definitions (cont'd): Owner documented FFI (cont'd) Must provide valid documentation of each individual, specified US person owners, owner-documented FFI, etc. AND reporting statement providing required info on all persons with equity interest OR Will provide auditor’s letter signed within 1 year of date of payment from independent accounting firm or legal rep in US stating no US person owns direct/indirect interest in payment. 49

50. W-8IMY (cont'd) Chapter 4 Definitions (Cont.): Certified deemed-compliant nonregistered local bank/retirement plan/non-profit org (see instructions). Certified deemed-compliant FFI with low- value accounts No account >$50,000 FFI not > $50MM. Audited financial statements provided Restricted distributor Operates as distributor with debt/ equity interest of restricted fund Distribution agreement with prohibition. 50

51. W-8IMY (cont'd) Chapter 4 definitions (cont'd): Exempt beneficial owners Excepted nonfinancial holding co/start up co Holds substantially stock of subsidiary engaged in business No sub is financial institution Does not function as investment fund formation date (start up) not an investment/equity fund Not a FFI Other excepted entities Territory FFI/NFFE 51

52. W-8IMY (cont'd) Chapter 4 definitions (cont'd): Active NFFE Not a financial institution <50% gross income passive AND <50% assets held to produce passive income Passive NFFE Not a financial institution Includes territory passive NFFE AND Will provide withholding certificates/documentation and withholding statement. QI branch of US institution/other 52

53. W-8IMY (cont'd) Part XXIV—Certification Declaration with signature under penalty of perjury 53

54. Annex – Draft of New Form 1042 54 Chapter 3 and Chapter 4 Status encompassed in the new Form 1042 Are notably reported: - Total U.S. source FDAP Income not required to be withheld upon under Chapter 4 - Total U.S. source FDAP Income reportable under Chapter 4

55. Annex – Draft of New Form 1042-S 55 Chapter 3 and Chapter 4 authority for Exemption Chapter 3 and Chapter 4 for Type of Recipient, Withholding Agent or Intermediary

56. Colleen P. Waddell WeiserMazars LLP 212.315.6780 Colleen.Waddell@WeiserMazars.com & Dara S. Green Kaufman Rossin & Co. 305.646.6180 dgreen@kaufmanrossin.com