Revenue Procedure 2000-12

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Rev. Proc. 2000-12; 2000-1 C.B. 387;
2000 IRB LEXIS 13, *; 2000-4 I.R.B. 387
Revenue Procedure 2000-12
Rev. Proc. 2000-12; 2000-1 C.B. 387; 2000 IRB LEXIS 13; 2000-4 I.R.B. 387
January 24, 2000
[*1]
SUBJECT MATTER: Application Procedures for Qualified Intermediary Status Under Section 1441;
Final Qualified Intermediary Withholding Agreement
TEXT:
* See Ann. 2000-12 p. 998
* See Ann. 2000-48 p. 1243
SECTION 1. PURPOSE AND SCOPE
.01 Purpose. This revenue procedure provides guidance for entering into a qualified intermediary
(QI) withholding agreement with the Internal Revenue Service (IRS) under §1.1441-1 (e) (5) of the
income tax regulations.n1 Section 3 of this revenue procedure provides the application procedures
for becoming a QI and Section 4 provides the final qualified intermediary withholding agreement
("QI withholding agreement"). The objective of the QI withholding agreement is to simplify
withholding and reporting obligations for payments of income (including interest, dividends,
royalties, and gross proceeds) made to an account holder through one or more foreign
intermediaries.
.02 Scope. This revenue procedure applies to persons described in §1.1441-1 (e) (5) (ii) (A) and
(B)-foreign financial institutions, foreign clearing organizations, and foreign branches of U.S.
financial institutions and U.S. clearing organizations. The principles of this agreement may, however,
be used to conclude QI withholding [*2] agreements with foreign corporations described in §
1.1441-1 (e) (5) (ii) (C) seeking to become a QI to present claims of benefits under an income tax
treaty on behalf of shareholders and to other persons that the IRS may accept to be qualified
intermediaries as authorized under §1.1441-1 (e) (5) (ii) (D). This revenue procedure does not
apply to a foreign partnership seeking to qualify as a withholding foreign partnership. See §1.1441-5
(c) (2) (ii). The IRS and Treasury will, however, consider applying the principles of the QI
withholding agreement provided in this revenue procedure to a foreign partnership acting on behalf
of its partners in appropriate circumstances. A person that is not within the scope of this revenue
procedure may seek QI status by contacting the Office of the Assistant Commissioner (International)
at the address or telephone number in Section 3.01 of this revenue procedure.
SECTION 2. BACKGROUND
.01 Withholding and reporting on payments to foreign persons. Under sections 1441 and 1442 of the
Internal Revenue Code (Code), a person that makes a payment of U.S. source interest, dividends,
royalties, and certain other types of income to a foreign person must generally [*3] deduct and
withhold 30 percent from the payment. A lower rate of withholding may apply under the Code (e.g.,
section 1443), the regulations, or an income tax treaty. Generally, a payor of these types of income
must also report the payments on Forms 1042-S. See §1.1461-1 (c).
Under sections 6041, 6042, 6045, 6049, and 6050N of the Code (the Form 1099 reporting

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provisions), payors of interest, dividends, royalties, gross proceeds from the sales of securities, and
other fixed or determinable income must report payments on Form 1099 unless an exception
applies. If a payment is reportable on Form 1099, a payor must generally obtain a Form W-9 from
the payee. If the payor does not receive the Form W-9, it must generally backup withhold at a 31
percent rate under section 3406 of the Code and report the payment on Form 1099. An exception to
the Form 1099 reporting provisions applies if the payee is a foreign person. A payor can treat a
person as foreign if the payor can reliably associate the payment with documentation that
establishes that the person is the beneficial owner of the income or a foreign payee. See §§1.6041-4
(a), 1.6042-3 (b) (1) (iii); 1.6045-1 (g) (1) (i); 1.6049-5 (b) (12); and [*4] 1.6050N-1 (c) (1) (i).
Moreover, a payor does not have to backup withhold on payments to foreign beneficial owners or
foreign payees because backup withholding applies only to amounts that the payor must report on
Form 1099.
.02 Responsibilities of intermediaries that enter into the QI withholding agreement. When the IRS
enters into a QI withholding agreement with a foreign person, that foreign person becomes a QI. A
QI is a withholding agent under chapter 3 of the Code and a payor under chapter 61 and section
3406 of the Code for amounts that it pays to its account holders. Except as otherwise provided in
the Agreement, a QI's obligations with respect to amounts it pays to account holders are governed
by chapter 3, chapter 61, and section 3406 of the Code and the regulations thereunder. A QI shall
act in its capacity as a QI pursuant to the Agreement only for those accounts the QI has with a
withholding agent that the QI has designated as accounts for which it acts as a QI. A QI is not
required to act as a QI for all accounts that it has with a withholding agent. However, if QI
designates an account as one for which it will act as a QI, it must act as a QI for all payments made
to that [*5] account.
SECTION 3. APPLICATION FOR QI STATUS
.01 Where to Apply. To apply for QI status, an eligible person must submit the information required
by this Section 3 to:Assistant Commissioner (International)
Foreign Payments Division
OP:IN:I:FP
950 L'Enfant Plaza South, SW
Washington , DC 20024
Telephone: (202) 874-1800
Fax: (202) 874-1797
.02 Contents of the Application. A prospective QI must submit an application to become a QI. The
application must establish to the satisfaction of the IRS that the applicant has adequate resources
and procedures to comply with the terms of the QI withholding agreement. An application must
include the information specified in this section 3.02, and any additional information and
documentation requested by the IRS:

(1) A statement that the applicant is an eligible person and that it requests to enter into a QI
withholding agreement with the IRS.
(2) The applicant's name, address, and employer identification number (EIN), if any.
(3) The country in which the applicant was created or organized and a description of the
applicant's business.

(4) A list of the position titles of those persons who will be the responsible parties for

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performance under the Agreement and the names, [*6] addresses, and telephone
numbers of those persons as of the date the application is submitted.
(5) An explanation and sample of the account opening agreements and other documents used
to open and maintain the accounts at each location covered by the Agreement.

(6) A list describing the type of account holders (e.g., U.S., foreign, treaty benefit claimant, or
intermediary), the approximate number of account holders within each type, and the
estimated value of U.S. investments that the QI agreement will cover.

(7) A general description of U.S. assets by type (e.g., U.S. securities, U.S. real estate),
including assets held by U.S. custodians, and their approximate aggregate value by type.
The applicant should provide separate information for assets beneficially owned by the
applicant and for assets it holds for others.
(8) A completed Form SS-4 (Application for Employer Identification Number) to apply for a QI
Employer Identification Number (QI-EIN) to be used solely for QI reporting and filing
purposes. An applicant must apply for a QI-EIN even if it already has another EIN. Each
legal entity governed by the QI withholding agreement must complete a Form SS-4.

(9) Completed appendices and attachments [*7] that appear at the end of the QI agreement
set forth in section 4.

The IRS will not enter into a QI withholding agreement that provides for the use of documentary
evidence obtained under a country's know-your-customer rules if it has not received the "knowyour-customer" practices and procedures for opening accounts and responses to the 18 specific
items presented below. If the information has already been provided to the IRS, it is not necessary
for a particular prospective QI to submit the information. The IRS may publish lists of countries for
which it has received know-your-customer information and for which the know-your-customer rules
are acceptable. A prospective QI applicant may also contact the IRS at the address or telephone
number provided in section 3.01 to obtain information. The 18 items are as follows:

1. An English translation of the laws and regulations ("know-your-customer" rules) governing
the requirements of a QI to obtain documentation confirming the identity of QI's account
holders. The translation must include the name of the law, and the appropriate citations to
the law and regulations.

2. The name of the organization (whether a governmental entity or private association) [*8]
responsible for enforcing the know-your-customer rules. Specify how those rules are
enforced (e.g., through audit) and the frequency of compliance checks.

3. The penalties that apply for failure to obtain, or evaluate, documentation under the knowyour-customer rules. 4. The definition of customer or account holder that is used under the
know-your-customer rules. Specify whether the definition encompasses direct and indirect
beneficiaries of an account if the activity in the account involves the receipt or disbursal of
funds. Specify whether the definition of customer or account holder includes a trust
beneficiary, a company whose assets are managed by an asset manager, a controlling

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shareholder of a closely held corporation or the grantor of a trust.

5. A statement regarding whether the documentation required under the know-your-customer
rules requires a financial institution to determine if its account holder is acting as an
intermediary for another person.

6. A statement regarding whether the documentation required under the know-your-customer
rules requires a financial institution to identify the account holder as a beneficial owner of
income credited to an account.

7. A list of the specific [*9] documentation required to be used under the know-yourcustomer rules, or if those rules do not require use of specific documentation, the
documentation that is generally accepted by the authorities responsible for enforcing those
rules.
8. A statement regarding whether the know-your-customer rules require that an account
holder provide a permanent residence address.

9. A summary of the rules that apply if an account is not opened in person (e.g.,
correspondence, telephone, Internet).
10.Whether an account holder's identity may be established, in whole or in part, by
introductions or referrals.

11.The circumstances under which new documentation must be obtained, or existing
documentation verified, under the know-your-customer rules.

12.A list of all the exceptions, if any, to the documentation requirements under the knowyour-customer rules.

13.A statement regarding whether the know-your-customer rules do not require
documentation from an account holder if a payment to or from that account holder is
cleared by another financial institution.n2

14.A statement regarding how long the documentation remains valid under the know-yourcustomer rules.

15.A statement regarding how long the documentation [*10] obtained under the knowyour-customer rules must be retained and the manner for maintaining that documentation.

16.Specify whether the rules require the maintenance of wire transfer records, the form of the
wire transfer records and how long those records must be maintained. State whether the
wire transfer records require information as to both the original source of the funds and the
final destination of the funds.

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17.A list of any payments or types of accounts that are not subject to the know-yourcustomer rules.

18.Specify whether there are special rules that apply for purposes of private banking activities.

SECTION 4. QUALIFIED INTERMEDIARY WITHHOLDING AGREEMENT
The text of the QI agreement is set forth below. Upon receipt and review of an application to
become a qualified intermediary, the IRS will complete the QI agreement (e.g., insertion of the QI's
name, etc.). A prospective QI should ensure that it has provided to the IRS all of the information
that is required to complete the agreement. It may be necessary for the IRS to contact the potential
qualified intermediary, or its authorized representative, to obtain additional information. Once the
IRS has obtained all the information [*11] required to complete the agreement, the IRS will send
two unsigned copies of the QI withholding agreement to the prospective QI for signature. Both
copies of the agreement should be signed by a person with the authority to sign the agreement and
returned to the IRS at the address specified in section 3.01. The IRS will sign the QI agreement and
return one of the originals to the qualified intermediary.
The IRS will consider changes to the text of the QI agreement as set forth below only in rare and
unusual circumstances. The IRS will not accept, however, any changes that it determines would
provide a potential QI with a competitive advantage over other similarly situated QIs.
COUNTRY-BY-COUNTRY REPORTING
The IRS and Treasury have decided that a QI that has executed a QI withholding agreement prior to
January 1, 2001, will not be required to provide a country-by-country break down of reporting pools
on Form 1042-S. See section 8.03 of the QI withholding agreement for a definition of reporting pool.
It was decided that requiring such information at this time would impede implementation of the QI
system since it is recognized that financial institutions will be required to commit substantial [*12]
information technology resources to address technology issues that have been delayed by the year
2000 problem. The IRS and Treasury, however, are continuing to study whether to require country
code information for reporting pools in the future. Therefore, the IRS and Treasury may require a
potential QI that enters into an agreement after December 31, 2000, or a QI that enters into an
agreement after the expiration of an agreement's initial term, to provide a country-by-country break
down of reporting pools.
SECTION 1. PURPOSE AND SCOPE
Sec. 1.01. General Obligations Sec. 1.02. Parties to the Agreement
SECTION 2. DEFINITIONS
Sec. 2.01. Account Holder
Sec. 2.02. Agreement
Sec. 2.03. Amounts Subject to NRA
Withholding
Sec. 2.04. Assumption of
Withholding Responsibility

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Sec. 2.05. Backup Withholding
Sec. 2.06. Beneficial Owner
Sec. 2.07. Broker Proceeds
Sec. 2.08. Chapter 3 of the Code
Sec. 2.09. Chapter 61 of the Code
Sec. 2.10. Deposit Interest
Sec. 2.11. Designated Broker
Proceeds
Sec. 2.12. Documentary Evidence
Sec. 2.13. Documentation
Sec. 2.14. Documented Account
Holder
Sec. 2.15. Exempt Recipient
Sec. 2.16. External Auditor
Sec. 2.17. Flow - Through Entity
Sec. 2.18. Foreign Person
Sec. 2.19. Form W-8
Sec. 2.20. [*13] FormW-9
Sec. 2.21. Form 945
Sec. 2.22. Form 1042
Sec. 2.23. Form 1042-S
Sec. 2.24. Form 1096
Sec. 2.25. Form 1099
Sec. 2.26. Form 1099 Reporting
Sec. 2.27. Intermediary
Sec. 2.28. Know-Your-Customer
Rules
Sec. 2.29. Marketable Securities
Sec. 2.30. Non-Exempt Recipient

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Sec. 2.31. Nonqualified Intermediary
Sec. 2.32. NRA Withholding
Sec. 2.33. Overwithholding
Sec. 2.34. Paid Outside the United
States
Sec. 2.35. Payment
Sec. 2.36. Payor
Sec. 2.37. Presume/Presumption
Sec. 2.38. Private Arrangement
Intermediary
Sec. 2.39. Qualified Intermediary
Sec. 2.40. Qualified Intermediary (or
QI) BIN
Sec. 2.41. Reduced Rate of
Withholding
Sec. 2.42. Reliably Associating a
Payment With Documentation
Sec. 2.43. Reportable Amount
Sec. 2.44. Reportable Payment
Sec. 2.45. Reporting Pool
Sec. 2.46. Short-Term Obligation
Sec. 2.47. TIN
Sec. 2.48. Underwithholding
Sec. 2.49. Undocumented Account
Holder
Sec. 2.50. U.S. Payor/Non-U.S.
Payor
Sec. 2.51. U.S. Person
Sec. 2.52. Withholding Agent
Sec. 2.53. Withholding Rate Pool

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Sec. 2.54. Withholding Statement
Sec. 2.55. Other Terms
SECTION 3. WITHHOLDING RESPONSIBILITY
Sec. 3.01. NRA Withholding
Responsibility
Sec. 3.02. Primary NRA Withholding
Responsibility Not Assumed
Sec. 3.03. Assumption of Primary
NRA [*14] Withholding Responsibility
Sec. 3.04. Backup Withholding
Responsibility
Sec. 3.05. Primary Form 1099
Reporting and Backup Withholding
Responsibility For Reportable
Payments Other Than Reportable
Amounts
Sec. 3.06. Primary Form 1099
Reporting and Backup Withholding
Responsibility For Reportable
Amounts Not Assumed
Sec. 3.07. Assumption of Primary
Form 1099 Reporting and Backup
Withholding Responsibility
Sec. 3.08. Deposit Requirements
SECTION 4. PRIVATE
ARRANGEMENT
INTERMEDIARIES
Sec. 4.01. In General Sec. 4.02. Modification of Obligations for PAI Agreements Sec. 4.03.
Termination of Arrangement
SECTION 5. DOCUMENTATION REQUIREMENTS

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Sec. 5.01. Documentation
Requirements
Sec. 5.02. Documentation For
Foreign Account Holders
Sec. 5.03. In General.
Sec. 5.04. Documentation for
International Organizations
Sec. 5.05. Documentation for Foreign
Governments and Foreign Central
Banks of Issue
Sec. 5.06. Documentation for Foreign
Tax-Exempt Organizations
Sec. 5.07. Documentation From
Intermediaries or Flow-Through
Entities
Sec. 5.08. Documentation For U.S.
Exempt Recipients
Sec. 5.09. Documentation for U.S.
Non-Exempt Recipients
Sec. 5.10. Documentation Validity
Sec. 5.11. Documentation Validity
Period
Sec. 5.12. Maintenance and Retention [*15] of Documentation
Sec. 5.13. Application of
Presumption Rules
SECTION 6. QUALIFIED INTERMEDIARY WITHHOLDING CERTIFICATE AND DISCLOSURE
OF ACCOUNT HOLDERS TO WITHHOLDING AGENT
Sec. 6.01. Qualified Intermediary
Withholding Certificate
Sec. 6.02. Withholding Statement

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Sec. 6.03. Withholding Rate Pools
Sec. 6.04. Legal Prohibitions Against
Disclosure of U.S. Non-Exempt
Recipients
SECTION 7. TAX RETURN OBLIGATIONS
Sec. 7.01. Form 1042 Filing
Requirement
Sec. 7.02. Form 945 Filing
Requirement
Sec. 7.03. Retention of Returns
SECTION 8. INFORMATION REPORTING OBLIGATIONS
Sec. 8.01. Form 1042-S Reporting
Sec. 8.02. Recipient Specific
Reporting
Sec. 8.03. Reporting Pools for Form
1042-S Reporting
Sec. 8.04. Form 1099 Reporting
Responsibility
SECTION 9. ADJUSTMENTS FOR OVER-AND UNDER-WITHHOLDING; REFUNDS
Sec. 9.01. Adjustments for NRA
Overwithholding by Withholding
Agent
Sec. 9.02. Adjustments for NRA
Overwithholding by QI
Sec. 9.03. Repayment of Backup
Withholding
Sec. 9.04. Collective Credit or
Refund Procedures for NRA
Overwithholding

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Sec. 9.05. Adjustments for NRA
Underwithholding
Sec. 9.06. NRA Underwithholding
After Form 1042 Filed
Sec. 9.07. Special Rule Regarding
Failure to Deposit Penalties
SECTION 10. EXTERNAL AUDIT PROCEDURES
Sec. 10.01. [*16] In General
Sec. 10.02. Designation of External
Auditor
Sec. 10.03. Timing and Scope of
External Audits
Sec. 10.04. Use of Statistical
Sampling
Sec. 10.05. External Auditor's Report
Sec. 10.06. Expanding Scope and
Timing of External Audit
SECTION 11. EXPIRATION, TERMINATION AND DEFAULT
Sec. 11.01. Term of Agreement
Sec. 11.02. Termination of
Agreement
Sec. 11.03. Significant Change in
Circumstances
Sec. 11.04. Events of Default
Sec. 11.05. Notice and Cure
Sec. 11.06. Renewal
SECTION 12. MISCELLANEOUS PROVISIONS
THIS AGREEMENT is made in duplicate under and in pursuance of section 1441 of the Internal
Revenue Code of 1986, as amended, (the "Code") and Treasury Regulation §1.1441-1 (e) (5) by
and between______________, any affiliated entities of______________ designated in
Appendix A of this Agreement that are signatories to this Agreement (individually and collectively

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referred to as "QI"), and the INTERNAL REVENUE SERVICE (the "IRS"):

WHEREAS, QI has submitted an application in accordance with Revenue Procedure
2000-12 to be a qualified intermediary for purposes of Treas. Reg. §1.1441-1 (e) (5);
WHEREAS, QI and the IRS desire to enter into an agreement to establish QI's rights
and obligations regarding documentation, [*17] withholding, information reporting,
tax return filing, deposits, and refund procedures under sections 1441, 1442, 1443,
1461, 3406, 6041, 6042, 6045, 6049, 6050N, 6302, 6402, and 6414
of the Code with respect to certain types of payments;
NOW, THEREFORE, in consideration of the following terms, representations, and
conditions, the parties agree as follows:

SECTION 1. PURPOSE AND SCOPE
Sec. 1.01. General Obligations. QI is a withholding agent under chapter 3 of the Code and a
payor under chapter 61 and section 3406 of the Code for amounts that it pays to its account
holders. Except as otherwise provided in this Agreement, QI's obligations with respect to amounts it
pays to account holders are governed by chapter 3, chapter 61, and section 3406 of the Code and
the regulations there under. QI shall act in its capacity as a qualified intermediary pursuant to this
Agreement only for those accounts QI has with a withholding agent that QI has designated as
accounts for which it acts as a qualified intermediary. QI is not required to act as a qualified
intermediary for all accounts that it has with a withholding agent. However, if QI designates an
account as one for which it will act as a qualified [*18] intermediary, it must act as a qualified
intermediary for all payments made to that account.
Sec. 1.02. Parties to the Agreement. This Agreement applies to:

(A) All offices of QI located in the countries described in Appendix A of this Agreement; and
(B) The Internal Revenue Service. Notwithstanding section 1.02 (A) of this Agreement, an
office of QI shall be subject to the provisions of this Agreement only to the extent it
receives a payment from a withholding agent with respect to an account that QI has
designated as an account for which it is acting as a qualified intermediary. See section 6.02
of this Agreement for the procedure to designate an account. QI may add any countries not
initially included in Appendix A without prior IRS approval if the country is one for which
the IRS will enter a model qualified intermediary agreement and QI provides the IRS an
amended Appendix A at the address described in section 12.06 of this Agreement. Offices
in the additional countries may begin to operate under this Agreement immediately after QI
satisfies the notification requirement of this section 1.02. Appendix A, as amended, shall
become part of this Agreement.

SECTION 2. DEFINITIONS
For purposes [*19] of this Agreement, the terms listed below are defined as follows:

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Sec. 2.01. Account Holder. An "account holder" means any person that is a direct
account holder or an indirect account holder and for which QI acts as a qualified
intermediary. A direct account holder is any person who has an account directly with QI
(including an intermediary or flow-through entity). An indirect account holder is any
person who receives amounts from a QI but who does not have a direct account
relationship with QI. For example, a person that has an account with a foreign
intermediary or an interest in a flow-through entity which, in turn, is a direct account
holder of QI is an indirect account holder. In addition, the person that is the sole owner
of an entity that is disregarded under Treas. Reg. §301.7701-2 (c) (2) as an entity
separate from its owner is an indirect account holder. A person is an indirect account
holder even if there are multiple tiers of intermediaries or flow-through entities between
the person and the QI.
Sec. 2.02. Agreement. "Agreement" means this Agreement, all appendices and
attachments to this Agreement, and QI's application to become a qualified intermediary.
All such appendices, [*20] attachments, and QI's application are incorporated into this
Agreement by reference.
Sec. 2.03. Amounts Subject to NRA Withholding. An "amount subject to NRA
withholding" is an amount described in Treas. Reg. §1.1441-2 (a). An amount subject to
NRA withholding shall not include interest paid as part of the purchase price of an
obligation sold between interest payment dates or original issue discount paid as part of
the purchase price of an obligation sold in a transaction other than the redemption of
such obligation, unless the sale is part of a plan the principal purpose of which is to
avoid tax and QI has actual knowledge or reason to know of such plan.
Sec. 2.04. Assumption of Withholding Responsibility. A QI that assumes primary
NRA withholding responsibility, or assumes primary Form 1099 reporting and backup
withholding responsibility, assumes the primary responsibility for deducting, withholding,
and depositing the appropriate amount from a payment. Generally, a qualified
intermediary's assumption of primary NRA withholding responsibility or the assumption
of primary backup withholding responsibility relieves the person who makes a payment
to the qualified intermediary from the [*21] responsibility to withhold. Under section
3.05 of this Agreement, QI generally has primary Form 1099 reporting and backup
withholding responsibility with respect to certain payments even though it does not
assume such responsibility for payments not described in that section.
Sec. 2.05. Backup Withholding. "Backup withholding" means the withholding required
under section 3406 of the Code.
Sec. 2.06. Beneficial Owner. A "beneficial owner" has the meaning given to that term
in Treas. Reg. §1.1441-1 (c) (6).
Sec. 2.07. Broker Proceeds. "Broker proceeds" means the gross proceeds from a sale
of an asset to the extent that the gross proceeds would be subject to Form 1099
reporting if paid to a U.S. non-exempt recipient. For purposes of this Agreement, broker
proceeds also include any proceeds paid by QI from the sale of assets pursuant to the
provisions of section 6.04 of this Agreement that are owned by a U.S. non-exempt
recipient and that produce, or could produce, reportable payments regardless of whether
the sale is effected at an office inside or outside the United States and regardless of
whether or not the sale is effected by QI or another person on instructions from QI.
Thus, the exception [*22] in Treas. Reg. §1.6045-1 (a), which excludes from Form
1099 reporting certain sales effected at an office outside the United States, shall not
apply in the case of U.S. non-exempt recipients whose identity is prohibited by law from
disclosure. In addition, the exception from backup withholding on certain payments
contained in Treas. Reg. §31.3406 (g)-1 (e) shall not apply to such broker proceeds.

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Sec. 2.08. Chapter 3 of the Code. Any reference to "chapter 3 of the Code" means
sections 1441, 1442, 1443, 1461, 1463, and 1464 of the Code.
Sec. 2.09. Chapter 61 of the Code. Any reference to "chapter 61 of the Code" means
sections 6041, 6042, 6045, 6049, and 6050 N of the Code.
Sec. 2.10. Deposit Interest. "Deposit interest" means interest described in section
871 (i) (2) (A)of the Code.
Sec. 2.11. Designated Broker Proceeds. "Designated broker proceeds" means-

(A) Any broker proceeds from the sale of assets that produce, or could produce,
reportable amounts if the sale is effected at an office inside the United States,
as defined in Treas. Reg. §1.6045-1 (g) (3), (unless an exception to reporting
applies under chapter 61 of the Code); and

(B) Any broker proceeds from the sale of an asset that produces, [*23] or could
produce, reportable amounts that are beneficially owned by a U.S. non-exempt
recipient whose identity and account information is prohibited from disclosure
as described in section 6.04 of this Agreement. For this purpose, it is irrelevant
whether the sale is effected by QI or another person upon instructions from QI.
It is also irrelevant whether the sale is effected at an office inside or outside
the United States. Thus, the exception in Treas. Reg. §1.6045-1 (a) (which
excepts sales effected at an office outside the United States by a non-U.S.
payor) and the exception in Treas. Reg. 31.3406 (g)-1 (e) (which excepts
certain payments made outside the United States from backup withholding) do
not apply in the case of an account holder whose identity is prohibited by law
from disclosure.

Sec. 2.12. Documentary Evidence. "Documentary evidence" means any
documentation obtained under the appropriate know-your-customer rules (as described
in the Attachments to this Agreement), any documentary evidence described in Treas.
Reg. §1.1441-6 sufficient to establish entitlement to a reduced rate of withholding under
an income tax treaty, or any documentary evidence described in Treas. Reg. §1.6049-5
(c) [*24] sufficient to establish an account holder's status as a foreign person for
purposes of chapter 61 of the Code. Documentary evidence does not include a Form W-8
or Form W-9 (or an acceptable substitute Form W-8 or Form W-9).
Sec. 2.13. Documentation. "Documentation" means any valid Form W-8, Form W-9
(or acceptable substitute Form W-8 or Form W-9) or documentary evidence as defined in
section 2.12 of this Agreement, including all statements or other information required to
be associated with the form or documentary evidence.
Sec. 2.14. Documented Account Holder. A "documented account holder" is an
account holder for whom QI holds valid documentation.
Sec. 2.15. Exempt Recipient. For purposes of Form 1099 reporting and backup
withholding, an "exempt recipient" means a person described in Treas. Reg. §1.6049-4
(c) (1) (ii) (for interest, dividends, and royalties), a person described in Treas, Reg.
§5f.6045-1 (c) (3) (i) (B) and §1.6045-2 (b) (2) (i) (for broker proceeds), and a person
described in Treas. Reg. §1.6041-3 (q) (for rents, amounts paid on notional principal
contracts, and other fixed or determinable income). Exempt recipients are not exempt
from NRA withholding.

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Sec. 2.16. External [*25] Auditor. An "external auditor" is any approved auditor
listed in Appendix B of this Agreement that QI (or any private arrangement intermediary
of QI) engages to perform the audits required by section 10 of this Agreement.
Sec. 2.17. Flow -Through Entity. A flow-through entity is a foreign partnership
described in Treas. Reg. §301.7701-2 or 3 (other than a withholding foreign
partnership), a foreign trust that is described in section 651 (a) of the Code, or a foreign
trust all or a portion of which is treated as owned by the grantor or other person under
sections 671 through 679 of the Code. For an item of income for which a treaty benefit
is claimed, an entity is also a flow-through entity to the extent it is treated as fiscally
transparent under section 894 and the regulations hereunder.
Sec. 2.18. Foreign Person. A "foreign person" is any person that is not a "United
States person" and includes a "nonresident alien individual," a "foreign corporation," a
"foreign partnership," a "foreign trust," and a "foreign estate," as those terms are
defined in section 7701 of the Code. For purposes of chapter 3 of the Code, the term
foreign person also means, with respect to a payment by a withholding [*26] agent
(including a qualified intermediary), a foreign branch of a U.S. person that provides a
valid Form W-8IMY on which it represents that it is a qualified intermediary. A foreign
branch of a U.S. person that is a qualified intermediary is, however, a U.S. payor for
purposes of chapter 61 and section 3406 of the Code.
Sec. 2.19. Form W-8. "Form W-8" means IRS Form W-8BEN, Certificate of Foreign
Status of Beneficial Owner for United States Tax Withholding; IRS Form W-8ECI,
Certificate of Foreign Person's Claim for Exemption From Withholding on Income
Effectively Connected With the Conduct of a Trade or Business in the United States; IRS
Form W-8EXP, Certificate of Foreign Governments and Other Foreign Organizations for
United States Tax Withholding; and IRS Form W-8IMY, Certificate of Foreign
Intermediary, Foreign Partnership, and Certain U.S. Branches for United States Tax
Withholding, as appropriate. It also includes any acceptable substitute form.
Sec. 2.20. Form W-9. "Form W-9" means IRS Form W-9, Request for Taxpayer
Identification Number and Certification, or any acceptable substitute.
Sec. 2.21. Form 945. "Form 945" means IRS Form 945, Annual Return of Withheld
Federal Income [*27] Tax.
Sec. 2.22. Form 1042. "Form 1042" means an IRS Form 1042, Annual Withholding Tax
Return for U.S. Source Income of Foreign Persons.
Sec. 2.23. Form 1042-S. "Form 1042-S" means an IRS Form 1042-S, Foreign Person's
U.S. Source Income Subject to Withholding.
Sec. 2.24. Form 1096. "Form 1096" means IRS Form 1096, Annual Summary and
Transmittal of U.S. Information Returns.
Sec. 2.25. Form 1099. "Form 1099" means IRS Form 1099-B, Proceeds From Broker
and Barter Exchange Transactions; IRS Form 1099-DIV, Dividends and Distributions;
IRS Form 1099-INT, Interest Income; IRS Form 1099-MISC, Miscellaneous Income; IRS
Form 1099-OID, Original Issue Discount, and any other form in the IRS Form 1099
series appropriate to the type of payment required to be reported.
Sec. 2.26. Form 1099 Reporting. "Form 1099 reporting" means the reporting
required on Form 1099.
Sec. 2.27. Intermediary. An "intermediary" means any person that acts on behalf of
another person such as a custodian, broker, nominee, or other agent.

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Sec. 2.28. Know-Your-Customer Rules. The phrase "know-your customer rules"
refers to the applicable laws, regulations, rules, and administrative practices and
procedures, identified in the Attachments [*28] to this Agreement, governing the
requirements of QI to obtain documentation confirming the identity of QI's account
holders.
Sec. 2.29. Marketable Securities. For purposes of this Agreement, the term
"marketable securities" means those securities described in Treas. Reg. §1.1441-6 for
which a TIN is not required to obtain treaty benefits.
Sec. 2.30. Non-Exempt Recipient. A "non-exempt recipient" means a person that is
not an exempt recipient under the definition in section 2.15 of this Agreement.
Sec. 2.31. Nonqualified Intermediary. A "nonqualified intermediary" is any
intermediary that is not a qualified intermediary. A nonqualified intermediary includes
any custodian, nominee, or other agent as well as any financial institution intermediary
unless such person enters an agreement to be a qualified intermediary and acts in such
capacity.
Sec. 2.32. NRA Withholding. "Nonresident alien (NRA) withholding" is any withholding
required under chapter 3 of the Code, whether the payment subject to withholding is
made to an individual or to an entity.
Sec. 2.33. Over withholding. The term "over withholding" means the excess of the
amount actually withheld under chapter 3 or section 3406 of the Code [*29] over the
amount required to be withheld.
Sec. 2.34. Paid Outside the United States. An amount is "paid outside the United
States" if it is paid outside the United States within the meaning of Treas. Reg. §1.60495 (e).
Sec. 2.35. Payment. A "payment" is considered made to a person if that person
realizes income whether or not such income results from an actual transfer of cash or
other property. See Treas. Reg. §1.1441-2 (e). For example, a payment includes
crediting an amount to an account.
Sec. 2.36. Payor. A "payor" is defined in Treas. Reg. §31.3406 (a)-2 and §1.6049-4 (a)
(2) and generally means any person required to make an information return under
chapter 61 of the Code. The term includes any person that makes a payment, directly or
indirectly, to QI and to whom QI provides information, pursuant to this Agreement, so
that such person can report a payment on Form 1099 and, if appropriate, backup
withhold. See sections 3.05 and 6 of this Agreement. Also see section 2.50 of this
Agreement for the definition of U.S. payor and non-U.S. payor.
Sec. 2.37. Presume/Presumption. The terms "presume" or "presumption" refer to
the presumption rules set forth in section 5.13 (C) [*30] of this Agreement.
Sec. 2.38. Private Arrangement Intermediary. A "private arrangement
intermediary" or "PAI" is an intermediary described in section 4 of this Agreement.
Sec. 2.39. Qualified Intermediary. A "qualified intermediary" is a person, described
in Treas. Reg. §1.1441-1 (e) (5) (ii), that enters into a withholding agreement with the
IRS to be treated as a qualified intermediary and acts in its capacity as a qualified
intermediary.
Sec. 2.40. Qualified Intermediary (or QI) EIN. A "qualified intermediary EIN" or
"QI-EIN" means the employer identification number assigned by the IRS to a qualified
intermediary. QI's QI-EIN is only to be used when QI is acting as a qualified
intermediary. For example, QI must give a withholding agent its non-QI EIN, if any,

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rather than its QI-EIN if it is receiving income as a beneficial owner and a taxpayer
identification number is required. QI must also use its non-QI EIN, if any, when acting
as a nonqualified intermediary. Each signatory to this agreement must have its own QIEIN.
Sec. 2.41. Reduced Rate of Withholding. A "reduced rate of withholding" means a
rate of withholding under chapter 3 of the Code that is less than 30 percent, including
[*31] an exemption from withholding, or not withholding 31 percent under section
3406 of the Code.
Sec. 2.42. Reliably Associating a Payment With Documentation. See section 5.13
(B) of this Agreement to determine whether QI can reliably associate a payment with
documentation.
Sec. 2.43. Reportable Amount. A "reportable amount" means an amount subject to
NRA withholding (as defined in section 2.03 of this Agreement); U.S. source deposit
interest (as defined in section 2.10 of this Agreement); and U.S. source interest or
original issue discount paid on the redemption of short-term obligations (as defined in
section 2.46 of this Agreement). The term does not include payments on deposits with
banks and other financial institutions that remain on deposit for two weeks or less. It
also does not include amounts of original issue discount arising from a sale and
repurchase transaction completed within a period of two weeks or less, or amounts
described in Treas. Reg. §1.6049-5 (b) (7), (10), or (11) (relating to certain foreign
targeted registered obligations and certain obligations issued in bearer form).
Sec. 2.44. Reportable Payment. For purposes of this Agreement, a reportable
payment means amounts [*32] described in section 2.44 (A) of this Agreement, in the
case of a U.S. payor, and amounts described in section 2.44 (B) of this Agreement, in
the case of a non-U.S. payor.

(A) U.S. Payor. If QI is a U.S. payor, a reportable payment means any reportable payment as
defined in section 3406 (b) of the Code, including any broker proceeds from the sale of assets
beneficially owned by a U.S. non-exempt recipient account holder that produce, or could produce,
reportable payments if the identity and account information of that account holder is prohibited by
law, including by contract, from disclosure as described in section 6.04 of this Agreement. For this
purpose, it is irrelevant whether the sale is effected by QI or QI instructs another person to effect
the sale. It is also irrelevant whether the sale is effected at an office inside or outside the United
States. Thus, the exception in Treas. Reg. § 1.6045-1 (a) (which excepts sales effected at an office
outside the United States by a non-U.S. payor) and the exception in Treas. Reg. 31.3406 (g)-1 (e)
(which excepts certain payments made outside the United States from backup withholding) do not
apply in the case of an account holder whose identity [*33] is prohibited by law from disclosure.
(B) Non-U.S. Payor. If QI is a non-U.S. payor a reportable payment means-

(1) Any reportable amount (unless an exception to reporting applies under chapter 61 of the
Code);

(2) Any broker proceeds from the sale of assets that produce, or could produce, reportable
amounts if the sale is effected at an office inside the United States, as defined in Treas.
Reg. § 1.6045-1 (g) (3), (unless an exception to reporting applies under chapter 61 of the
Code);

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(3) Any broker proceeds from the sale of an asset that produces, or could produce, reportable
amounts that are beneficially owned by a U.S. non-exempt recipient whose identity and
account information is prohibited by law, including by contract, from disclosure as
described in section 6.04 of this Agreement. For this purpose, it is irrelevant whether the
sale is effected by QI or another person upon instructions from QI. It is also irrelevant
whether the sale is effected at an office inside or outside the United States. Thus, the
exception in Treas. Reg. §1.6045-1 (a) (which excepts sales effected at an office outside
the United States by a non-U.S. payor) and the exception in Treas. Reg. 31.3406 (g)-1 (e)
(which [*34] excepts certain payments made outside the United States from backup
withholding) do not apply in the case of an account holder whose identity is prohibited by
law from disclosure; and

(4) Any foreign source interest, dividends, rents, royalties, or other fixed and determinable
income if such income is paid in the United States or to an account maintained in the
United States or any other amount presumed paid to a U.S. non-exempt recipient under
section 5.13 (C) (4) of this Agreement-(unless an exception to reporting applies under
chapter 61 of the Code).

Sec. 2.45. Reporting Pool. A reporting pool is defined in section 8.03 of this Agreement.
Sec. 2.46. Short-Term Obligation. A "short-term obligation" is any obligation described in section
871 (g) (1) (B) (i) of the Code.
Sec. 2.47. TIN. A "TIN" is a U.S. taxpayer identification number.
Sec. 2.48. Under withholding. "Under-withholding" means the excess of the amount required to
be withheld under chapter 3 or section 3406 of the Code over the amount actually withheld.
Sec. 2.49. Undocumented Account Holder. An "undocumented account holder" is an account
holder for whom QI does not hold valid documentation.
Sec. 2.50. [*35] U.S. Payor/Non-U.S. Payor. The terms "U.S. payor" and "non-U.S. payor"
have the same meaning as in Treas. Reg. §1.6049-5 (c).
Sec. 2.51. U.S. Person. A "United States (or U.S.) person" is a person described in section 7701
(a) (30) of the Code, the U.S. government (including an agency or instrumentality thereof), a State
of the United States (including an agency or instrumentality thereof), or the District of Columbia
(including an agency or instrumentality thereof).
Sec. 2.52. Withholding Agent. A "with holding agent" has the same meaning as set forth in Treas.
Reg. §1.1441-7 (a) and includes a payor (as defined in section 2.36 of this Agreement). As used in
this Agreement, the term generally refers to the person making a payment to a qualified
intermediary.
Sec. 2.53. Withholding Rate Pool. The term "withholding rate pool" is defined in section 6.03 of
this Agreement. Sec. 2.54. Withholding Statement The term "withholding statement" is defined in
section 6.02 of this Agreement. Sec. 2.55. Other Terms. Any term not defined in this section has
the same meaning that it has under the Code, the income tax regulations under the Code, or any
applicable income tax treaty.
SECTION 3. WITHHOLDING RESPONSIBILITY
Sec. 3.01. NRA Withholding Responsibility. QI [*36] is subject to the withholding and
reporting provisions applicable to withholding agents under chapter 3 of the Code. Under chapter 3,

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a withholding agent must withhold 30 percent of any payment of an amount subject to NRA
withholding made to an account holder that is a foreign person unless the withholding agent can
reliably associate the payment with documentation upon which it can rely to treat the payment as
made to a payee that is a U.S. person or as made to a beneficial owner that is a foreign person
entitled to a reduced rate of withholding. See section 5 of this Agreement regarding documentation
requirements.
Sec. 3.02. Primary NRA Withholding Responsibility Not Assumed. Notwithstanding sections
1.01 and 3.01 of this Agreement, QI shall not be required to withhold under chapter 3 of the Code if
it does not accept primary NRA withholding responsibility under section 3.03 of this Agreement and
it has provided a valid withholding certificate and correct withholding statements to a withholding
agent from which it receives an amount subject to NRA withholding in accordance with section 6 of
this Agreement. Notwithstanding its election not to assume primary NRA withholding responsibility,
[*37] QI shall, however, withhold the difference between the amount of NRA withholding required
under chapter 3 of the Code and the amount actually withheld by another withholding agent if QI-

(A) Actually knows that the appropriate amount has not been withheld by another withholding
agent; or

(B) Made an error which results in the withholding agent's failure to withhold the correct
amount due (e.g., QI fails to provide an accurate withholding statement with respect to the
payment) and QI has not corrected the under withholding under the reimbursement and
setoff procedures of section 9.05 of this Agreement. QI is not required to withhold under
chapter 3 of the Code on an amount subject to NRA withholding that it pays to another
qualified intermediary that has assumed primary NRA withholding responsibility with
respect to the payment or to a withholding foreign partnership. See section 8 of this
Agreement regarding QI's responsibility to report amounts subject to withholding on Form
1042-S.

Sec. 3.03. Assumption of Primary NRA Withholding Responsibility. QI, upon notification to a
withholding agent, may assume primary NRA withholding responsibility for an amount subject to
NRA withholding by providing [*38] a valid withholding certificate described in section 6 of this
Agreement to a withholding agent that makes a payment of an amount subject to NRA withholding
and by designating on the withholding statement associated with such certificate the account for
which QI assumes primary NRA withholding responsibility. QI may assume primary NRA withholding
responsibility without informing the IRS. QI is not required to assume primary NRA withholding
responsibility for all accounts it has with the withholding agent. However, if QI assumes primary
NRA withholding responsibility for any account, it must assume that responsibility for all payments
of amounts subject to NRA withholding made by the withholding agent to that account. To the
extent that QI assumes primary NRA withholding responsibility, QI shall withhold from amounts
subject to NRA withholding the amount required to be withheld under chapter 3 of the Code. QI is
not required, however, to withhold on amounts it pays to another qualified intermediary that has
certified to QI on Form W-8IMY that it has assumed primary withholding responsibility with respect
to the payment or to a withholding foreign partnership. See section 8 of this Agreement [*39]
regarding QI's responsibility to report amounts subject to withholding on Form 1042-S.
Sec. 3.04. Backup Withholding Responsibility. QI is a payor under section 3406 of the Code
with respect to reportable payments. Under section 3406, a payor is required to deduct and withhold
31 percent from the payment of a reportable payment to a U.S. non-exempt recipient if the U.S.
non-exempt recipient has not provided its TIN in the manner required under that section; the IRS
notifies the payor that the TIN furnished by the payee is incorrect; there has been a notified payee
under-reporting described in section 3406 (c); or there has been a payee certification failure
described in section 3406 (d). QI represents that there are no legal restrictions that prohibit it from

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complying with the Form 1099 reporting requirements of this Agreement or imposing backup
withholding and depositing the amounts withheld in accordance with section 3.08 of this Agreement.
Sec. 3.05. Primary Form 1099 Reporting and Backup Withholding Responsibility For
Reportable Payments Other Than Reportable Amounts. Under section 6.01 of this Agreement,
QI is only required to provide a withholding agent with information regarding [*40] reportable
amounts. Therefore, QI is primarily responsible for reporting on Form 1099 and, if required, backup
withholding on the payments described in section 3.05 (A) and (B) of this Agreement whether or not
QI assumes primary Form 1099 reporting and backup withholding responsibility with respect to
reportable amounts under section 3.07 of this Agreement. No provision of this Agreement which
requires QI to provide another withholding agent with information regarding reportable amounts
shall be construed as relieving QI of its Form 1099 reporting and backup withholding obligations
with respect to reportable payments that are not reportable amounts.
(A) U.S. Payor. Except as provided in section 3.05 (C) of this Agreement, if QI is a U.S. payor, QI
has primary Form 1099 reporting and backup withholding responsibility for reportable payments as
defined in section 3406 (b) of the Code other than reportable amounts. For example, if QI is a U.S.
payor, it has primary Form 1099 reporting and backup withholding responsibility for payments of
foreign source income as well as all broker proceeds paid to account holders that are, or are
presumed to be, U.S. non-exempt recipients, unless an exception [*41] to reporting or backup
withholding applies. QI also has primary Form 1099 reporting and backup withholding responsibility
for broker proceeds from the sale of assets beneficially owned by a U.S. non-exempt recipient
account holder that produce or could produce, reportable payments if the identity and account
information of that account holder is prohibited by law from disclosure as described in section 6.04
of this Agreement. See section 2.44 (A) of this Agreement for the instances in which certain
reporting and withholding exceptions do not apply.
(B) Non-U.S. Payor. Except as provided in section 3.05 (C) of this Agreement, if QI is a non-U.S.
payor, QI has primary Form 1099 reporting and backup withholding responsibility for broker
proceeds described in section 2.44 (B) (2) and (3) of this Agreement and foreign source income paid
in the United States or to an account maintained in the United States as described in section 2.44
(B) (4) of this Agreement, if such payments are made, or presumed made under section 5.13 (C)
(4) of this Agreement, to U.S. non-exempt recipients.
(C) Designated Broker Proceeds Procedure. Whether QI is a U.S. payor or non-U.S. payor, QI
may request another [*42] payor to report on Form 1099 and, if required, backup withhold on
designated broker proceeds (as defined in section 2.11 of this Agreement), provided the other payor
actually receives the broker proceeds. QI will not be primarily responsible for Form 1099 reporting
and for backup withholding if the other payor agrees to do the reporting and backup withholding and
QI provides all of the information necessary for the other payor to properly report, and backup
withhold on the designated broker proceeds. QI, however, remains primarily responsible for Form
1099 reporting and backup withholding if the other payor does not agree to report and backup
withhold, or QI knows that the other payor failed to do so.
Sec. 3.06. Primary Form 1099 Reporting and Backup Withholding Responsibility For
Reportable Amounts Not Assumed. Notwithstanding sections 1.01 and 3.04 of this Agreement,
QI shall not be required to backup withhold on a reportable amount if QI does not assume primary
Form 1099 reporting and backup withholding responsibility and it provides a payor from which it
receives a reportable amount the Forms W-9 of its U.S. non-exempt recipient account holders (or, if
a U.S. non-exempt recipient [*43] fails to provide a Form W-9, information regarding the account
holder's name, address, and TIN, if a TIN is available) together with the withholding rate pools (as
defined in section 6.03 of this Agreement) attributable to U.S. non-exempt recipient account
holders. Notwithstanding its election not to assume primary Form 1099 reporting and backup
withholding responsibility, QI shall backup withhold and report a reportable amount if-

(A) QI actually knows a reportable amount is subject to backup withholding and another payor
failed to apply backup or NRA withholding;

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(B) Another payor has not applied backup or NRA withholding to a reportable amount because
of an error made by QI (e.g., QI failed to provide the other payor with information
regarding the name, address, TIN, if available, and withholding rate pool for a U.S. nonexempt recipient account holder subject to backup withholding);

(C)QI pays a reportable amount to a U.S. non-exempt recipient whose identity and other
account information are prohibited by law from disclosure (see section 6.04 of this
Agreement) and another payor of the reportable amount has not backup withheld.

QI is not required to backup withhold, however, on a reportable [*44] amount it makes to a
withholding foreign partnership or to another qualified intermediary if the other qualified
intermediary has assumed primary Form 1099 reporting and backup withholding responsibility with
respect to the payment. See section 3.05 of this Agreement for backup withholding responsibility for
reportable payments other than reportable amounts. See section 8.04 of this Agreement regarding
QI's responsibility to report reportable payments on Form 1099.
[NOTE: A qualified intermediary that is not a U.S. payor must obtain IRS approval to assume
primary Form 1099 reporting and backup withholding responsibility with respect to reportable
amounts. The IRS will evidence its approval of a non-U.S. payor's assumption of primary Form 1099
reporting and backup withholding responsibility by the signature of the Commissioner, or his
delegate, in the margin of section 3.07 of this Agreement.]
Sec. 3.07. Assumption of Primary Form 1099 Reporting and Backup Withholding
Responsibility. QI may assume primary Form 1099 reporting responsibility under chapter 61 of the
Code and primary backup withholding responsibility under section 3406 of the Code with respect to
reportable amounts. See sections 3.05 [*45] and 8.04 of this Agreement for QI's obligations
regarding reportable payments other than reportable amounts. A qualified intermediary that
assumes such responsibility is subject to all of the obligations imposed by chapter 61 and section
3406 of the Code and shall be subject to any applicable penalties for failure to meet those
obligations. The exception from backup withholding under Treas. Reg. §31.3406 (g)-1 (e) shall not
apply, however, to payments of deposit interest, or interest or original issue discount on
redemptions of short-term obligations, to the extent QI must presume that an account holder is a
U.S. non-exempt recipient under section 5.13 (C) (2) of this Agreement. QI shall inform a
withholding agent from which it receives a reportable amount that it has assumed primary Form
1099 reporting and backup withholding responsibility by providing the withholding agent with a valid
withholding certificate described in section 6 of this Agreement and by designating on the
withholding statement associated with such certificate the account for which QI assumes primary
Form 1099 reporting and backup withholding responsibility. QI may assume primary Form 1099
reporting and backup withholding [*46] responsibility without informing the IRS, unless QI is a
non-U.S. payor. QI is not required to assume primary Form 1099 reporting and backup withholding
responsibility for all accounts it has with a withholding agent. However, if QI assumes primary Form
1099 reporting and backup withholding responsibility for any account, it must assume that
responsibility for all reportable amounts made by a payor to that account. QI shall not be required to
backup withhold on a reportable amount it makes to another qualified intermediary that has
assumed primary Form 1099 reporting and backup withholding responsibility with respect to the
reportable amount. See section 8 of this Agreement regarding QI's responsibility to report
reportable payments on Form 1099.
Sec. 3.08. Deposit Requirements. If QI is a U.S. payor or a non-U.S. payor that assumes primary
NRA withholding responsibility or primary Form 1099 and backup withholding responsibility, it must
deposit amounts withheld under chapter 3 or section 3406 of the Code with a Federal Reserve bank
or authorized financial institution at the time and in the manner provided under section 6302 of the
Code (see Treas. Reg. §1.6302-2 (a) or §31.6302-1 (h)). [*47] If QI is a non-U.S. payor that

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does not assume primary NRA withholding responsibility or primary Form 1099 and backup
withholding responsibility, QI must deposit amounts withheld by the 15th day following the month in
which the NRA or backup withholding occurred.
SECTION 4. PRIVATE ARRANGEMENT INTERMEDIARIES
Sec. 4.01. In General. QI may enter into a private arrangement with another intermediary under
which the other intermediary agrees to perform all of the obligations of QI under this Agreement,
except as provided in section 4.02 of this Agreement. Such agreement shall be between the QI and
all the offices of the other intermediary located in a specified country. The specified country must be
one for which this Agreement is available. Such an intermediary is referred to in this Agreement as a
private arrangement intermediary ("PAI"). By entering into a PAI agreement, QI is not assigning its
liability for the performance of any of its obligations under this Agreement. Therefore, QI shall
remain liable for any tax, penalties, interest, and any other sanction that may result from the failure
of the PAI to meet any of the obligations imposed by its agreement with QI. QI agrees not to assert
[*48] any defenses against the IRS for the failures of the PAI or any defenses that the PAI may
assert against QI. For poses of this Agreement, the PAI's actual knowledge or reason to know of
facts relevant to withholding or reporting shall be imputed to QI. QI's liability for the failures of the
PAI shall apply even though the PAI is itself a withholding agent under chapter 3 of the Code and a
payor under chapter 61 and section 3406 and is itself separately liable for its failure to meet its
obligations under the Internal Revenue Code. Notwithstanding the foregoing, QI shall not be liable
for tax, interest, or penalties for failure to withhold and report under chapters 3, 61, and section
3406 of the Code unless the under withholding or the failure to report amounts correctly on Forms
945, 1042, 1042-S or 1099 are due to QI's or its PAI's failure to properly perform its obligations
under this Agreement. The PAI is not required to enter into an agreement with the IRS. The IRS
may, however, in its sole discretion, refuse to permit an intermediary to operate as a PAI by
providing notice to QI at the address provided in section 12.06 of this Agreement. QI may, however,
appeal the IRS's determination [*49] by following the notice and cure provisions in section 11.05
of this Agreement. For purposes of this Agreement, an intermediary shall be considered a PAI only if
the following conditions are met:

(A) The PAI is, pursuant to a written agreement between QI and the PAI, subject to all the
obligations of QI under this Agreement, except to the extent modified by section 4.02 of
this Agreement;

(B) QI files a notice with the Commissioner, or his delegate, at the address set forth in section
12.06 of this Agreement, before the first payment for which the intermediary acts as a PAI
giving the name, address, taxpayer identification number of the intermediary, if any, and
the name of the country or countries in which the offices of the intermediary that are
subject to the PAI agreement are located;

(C)The PAI is subject to the identical external audit procedures that apply to QI under this
Agreement and the PAI uses an external auditor designated in Appendix B of this
Agreement, or another auditor approved by the IRS for that PAI; and

(D)The PAI furnishes QI with a Form W-8IMY described in section 6 of this Agreement as
modified by this section 4.01 (D). The PAI is required to provide QI with the [*50] Forms
W-9 (or, in absence of the form, the name, address and TIN, if available) of the PAI's U.S.
non-exempt recipient account holders and the withholding rate pool information for those
account holders as required by section 6.03 of this Agreement. In addition, the PAI is
required to disclose to QI the account holders of a nonqualified intermediary, or interest
holders in a flow-through entity, which has an account with the PAI and all of the

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information relating to those account holders that is required for the QI, or another
withholding agent, to report the payments made to those account holders as required by
sections 8.02 (B) and 8.04 of this Agreement. The PAI is not required to disclose to QI, or
another withholding agent, its direct account holders that are foreign persons.

Sec. 4.02. Modification of Obligations for PAI Agreements. The agreement between QI and a
PAI must provide that QI shall include all reportable payments made by the PAI in QI's Forms 945
and 1099 and all payments of amounts subject to NRA withholding made by the PAI in QI's Forms
1042 and 1042-S as if QI had made the payments directly to the PAI's account holders. Therefore,
QI shall report payments made [*51] to a PAI's direct foreign account holders (other than
intermediaries, custodians, nominees, agents or flow-through entities) using the reporting pools as
described in section 8.03 of this Agreement and shall report payments made to indirect foreign
account holders of the PAI by reporting the payments as made to specific recipients under the rules
of section 8.02 of this Agreement. QI shall also file Forms 1099 and, if required, backup withhold on
reportable payments made to U.S. non-exempt recipient direct or indirect account holders of a PAI
in accordance with the terms of this Agreement. QI shall require a PAI to provide QI with all the
information necessary for QI to meet its obligations under this Agreement. No provisions shall be
contained in the agreement between QI and a PAI that preclude, and no provisions of this
Agreement shall be construed to preclude, the PAI's joint and several liability for tax, penalties, and
interest under chapters 3, 61, and section 3406 of the Code to the extent that underwithholding,
penalties, and interest have not been collected from QI and the underwithholding or failure to report
amounts correctly on Forms 945, 1042, 1042-S or 1099 are due to [*52] a PAI's failure to
properly perform its obligations under its agreement with QI. QI's agreement with a PAI must
require the PAI to disclose information regarding U.S. non-exempt recipients to the same extent
that QI is required to disclose such information to the IRS or another payor under this Agreement.
Nothing in the agreement between QI and a PAI shall permit the PAI to assume primary NRA
withholding responsibility or primary Form 1099 reporting and backup withholding responsibility.
Sec. 4.03. Termination of Arrangement. QI shall cease to treat an intermediary as a PAI within
90 days from the day QI knows that the PAI is in default of its agreement with QI unless the PAI has
cured the event of default prior to the expiration of such 90 day period. QI must provide the IRS
with notice of any PAI agreement that has been terminated within 30 days of the termination.
SECTION 5. DOCUMENTATION REQUIREMENTS
Sec. 5.01. Documentation Requirements. QI shall apply the presumption rules to any account
holder that receives a reportable amount or reportable payment unless QI can reliably associate the
payment with valid documentation from the account holder. QI agrees to use its best efforts to
[*53] obtain documentation from account holders. If QI is obtaining documentary evidence, QI
also agrees to adhere to the know-your-customer rules that apply to QI with respect to the account
holder from whom the documentary evidence is obtained. As set forth in section 11.04 (F) of this
Agreement, failure to obtain documentation from a significant number of direct account holders
constitutes an event of default. QI agrees to review and maintain documentation in accordance with
this section 5 and, in the case of documentary evidence obtained from direct account holders, in
accordance with the know-your-customer rules set forth in the Attachments to this Agreement. QI
also agrees to make documentation (together with any associated withholding statements and other
documents or information) available upon request for inspection by QI's external auditor. QI
represents that none of the laws to which it is subject prohibits disclosure of the identity of any
account holder (including account holders subject to the provisions of section 6.04 of this
Agreement) or account information to QI's external auditor. QI may rely on the documentation it
obtains under this section 5 as the basis for the information [*54] it provides another withholding
agent under section 6 of this Agreement, as well as to determine its own withholding and reporting
obligations.
Sec. 5.02. Documentation For Foreign Account Holders. Except as otherwise provided in
section 5 of this Agreement, QI may treat an account holder (including an account holder that is a

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collective investment vehicle) as a foreign beneficial owner of an amount if the account holder
provides a valid Form W-8 (other than Form W-8IMY) or valid documentary evidence, as described
in section 2.12 of this Agreement, that supports the account holder's status as a foreign person. QI
may treat a documented foreign beneficial owner account holder as entitled to a reduced rate of
NRA withholding if all the requirements to a reduced rate are met and the documentation provided
by the account holder supports entitlement to a reduced rate. QI may not, however, reduce the rate
of NRA withholding or backup withholding required under the presumption rules of section 5.13 (C)
of this Agreement if QI knows that the account holder (including a collective investment vehicle) is
not the beneficial owner of a reportable amount or reportable payment. In addition, QI may [*55]
not treat an account holder that provides documentation indicating that it is a bank, broker,
intermediary, or agent (such as an attorney) as a beneficial owner unless QI receives a statement,
in writing and signed by a person with authority to sign such a statement, staring that such account
holder is the beneficial owner of the income. Further, QI may not reduce the rate of withholding that
applies under the presumption rules of section 5.13 (C) of this Agreement on the basis of a
collective or global certification that is made by any person (such as an intermediary or flow-through
entity) on behalf of others unless the certification is a valid Form W-8IMY, and then, only to the
extent that QI can reliably associate the payment with valid documentation that establishes the
account holder's entitlement to a reduced rate of withholding. See section 5.13 (B) of this
Agreement for rules regarding reliable association with documentation.
Sec. 5.03. In General. QI may not reduce the rate of withholding based on a beneficial owner's
claim of treaty benefits unless QI obtains the documentation required by section 5.03 (A) of this
Agreement. In addition, QI agrees to establish procedures to [*56] inform account holders of the
terms of limitation on benefits provisions of a treaty (whether or not those provisions are contained
in a separate article entitled Limitation on Benefits) under which the account holder is claiming
benefits.
(A) Treaty Documentation. The documentation required by this section 5.03 (A) is as follows:

(1) The account holder has provided a properly completed Form W-8BEN with part II of the
form completed, including the appropriate limitation on benefits and section 894
certifications. A TIN shall not be required, however, if the beneficial owner is a direct
account holder. An indirect account holder is required to have a TIN to claim treaty benefits
unless it is claiming treaty benefits on income from a marketable security;
(2) The account holder has provided documentary evidence that has been obtained pursuant to
the know-your-customer rules that apply to the account holder and the account holder has
made the treaty statement required by section 5.03 (B) of this Agreement, if applicable; or
(3) The account holder provides the type of documentary evidence required under Treas. Reg.
§1.1441-6 to establish entitlement to a reduced rate of withholding under a treaty [*57]
and the account holder has made the treaty statement required by section 5.03 (B) of this
Agreement, if applicable.

(B) Treaty Statement. The treaty statement required by this section 5.03 (B) is as follows:

[Name of account holder] meets all provisions of the treaty that are necessary to claim a
reduced rate of withholding, including any limitation on benefits provisions, and derives
the income within the meaning of section 894 of the Code, and the regulations
thereunder, as the beneficial owner. QI shall not be required to obtain a treaty

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statement required by this section 5.03 (B) from an individual who is a resident of an
applicable treaty country or from the government, or its political subdivisions, of a treaty
country.

(C) Transition Rule for Treaty Certification. QI may reduce the rate of withholding on a
payment made to a beneficial owner account holder that is otherwise entitled to a reduced rate of
withholding under an income tax treaty without obtaining the treaty statement required in sections
5.03 (B) of this Agreement provided that the account to which the payment is made was established
before January 1, 2001, and the payment to which a reduced rate of withholding under [*58] the
income tax treaty is applied is received on or before December 31, 2002.
Sec. 5.04. Documentation for International Organizations. QI may not treat an account holder
as an international organization entitled to an exemption from withholding under section 892 of the
Code unless the name provided on the documentation (including a Form W-8EXP) is the name of an
entity designated as an international organization by executive order pursuant to 22 United States
Code 288 through 288 (f) and the documentation is valid under section 5.10 of this Agreement. If
an international organization is not claiming benefits under section 892 of the Code but under
another Code exception, the provisions of sections 5.02 of this Agreement apply rather than the
provisions of this section 5.04. Sec. 5.05. Documentation for Foreign Governments and
Foreign Central Banks of Issue.
(A) Documentation From a Foreign Government or Foreign Central Bank of Issue Claiming
an Exemption From Withholding Under Section 892 or Section 895. QI may not treat an
account holder as a foreign government or foreign central bank of issue exempt from withholding
under section 892 or 895 of the Code unless-

(1) QI receives from the [*59] account holder a Form W-8EXP or documentary evidence
establishing that the account holder is a foreign government or foreign central bank of
issue;

(2) The income paid to the account holder is the type of income that qualifies for an exemption
from withholding under section 892 or 895; and

(3) QI does not know, or have reason to know, that the account holder is a controlled
commercial entity, that the income owned by the foreign government or foreign central
bank of issue is being received from a controlled commercial entity, or that the income is
from the disposition of an interest in a controlled commercial entity.

(B) Treaty Exemption. QI may treat an account holder as a foreign government or foreign central
bank of issue entitled to a reduced rate of withholding under an income tax treaty if it has valid
documentation that, under section 5.03 of this Agreement, is sufficient to obtain a reduced rate of
withholding under a treaty.
(C) Other Code Exception. If a foreign government or foreign central bank of issue is not claiming
benefits under section 892 of the Code but under another Code exception (e.g., the portfolio interest
exception under sections 871 (h) or 881 (c) of the Code), [*60] the provisions of sections 5.02 of
this Agreement apply rather than the provisions of this section 5.05.
Sec. 5.06. Documentation for Foreign Tax-Exempt Organizations.

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(A) Reduced Rate of Withholding Under Section 501. QI may not treat an account holder as a
foreign organization described under section 501 (c) of the Code, and therefore exempt from
withholding (or, if the account holder is a foreign private foundation, subject to withholding at a 4percent rate under section 1443 (b) of the Code) unless QI obtains a valid Form W-8EXP on which
Part III of the form is completed.
(B) Reduced Rate of Withholding Under Treaty. QI may not treat an account holder as a
foreign organization that is tax-exempt on an item of income pursuant to a treaty unless QI obtains
valid documentation as described under section 5.03 of this Agreement that is sufficient for
obtaining a reduced rate of withholding under a treaty and the documentation establishes that the
account holder is an organization exempt from tax under the treaty on that item of income.
(C) Other Exceptions. If a tax-exempt entity is not claiming a reduced rate of withholding because
it is an organization described under section 501 (c) of the Code [*61] or under a treaty article
that applies to exempt certain organizations from tax, but is claiming a reduced rate of withholding
under another Code or treaty exception, the provisions of section 5.02 of this Agreement shall apply
rather than the provisions of this section 5.06.
Sec. 5.07. Documentation From Intermediaries or Flow-Through Entities. QI shall apply the
presumption rules of section 5.13 of this Agreement to a reportable amount or reportable payment
made to a nonqualified intermediary or flow-through entity except to the extent QI follows the
documentation procedures set forth below.
(A) Nonqualified Intermediaries and Flow-Through Entities. QI shall not apply the
presumption rules on a payment made to a nonqualified intermediary or flow-through entity to the
extent-

(1) QI receives a valid Form W-8IMY provided by the nonqualified intermediary or the flowthrough entity; and

(2) QI can reliably associate the payment, within the meaning of section 5.13 (B) of this
Agreement, with valid documentation described in this section 5 provided by account
holders that are not themselves nonqualified intermediaries or flow through entities.

(B) Qualified Intermediaries and Withholding Foreign [*62] Partnerships. QI shall not
apply the presumption rules to a payment made to a qualified intermediary or withholding foreign
partnership to the extent QI can reliably associate the payment with a valid Form W-8IMY provided
by the qualified intermediary or withholding foreign partnership and, for those payments for which a
qualified intermediary has not assumed primary NRA withholding responsibility or primary Form
1099 reporting and backup withholding responsibility, QI can reliably associate the payment with a
withholding rate pool, as described in section 6.03 of this Agreement.
(C) Private Arrangement Intermediaries. QI shall not apply the presumption rules of section
5.13 of this Agreement if QI has an agreement with a PAI, QI obtains from the PAI a Form W-8IMY
completed as if the PAI were a qualified intermediary (with the exception that the PAI must not
provide a QI-EIN on the Form W-8IMY) and QI can reliably associate the payment with reporting
pools as described under section 8 of this Agreement, or with withholding rate pool information
relating to U.S. non-exempt recipients and indirect foreign account holders.
Sec. 5.08. Documentation For U.S. Exempt Recipients. QI shall not [*63] treat an account
holder as a U.S. exempt recipient unless QI obtains from the account holder-

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(A) A valid Form W-9 on which the account holder writes "Exempt" in Part II of the Form;
(B) Documentary evidence that is sufficient to establish both the account holder's U.S. and
exempt recipient status; or

(C)Documentary evidence that is sufficient to establish the account holder's status as a U.S.
person and QI can treat the person as an exempt recipient under the rules of Treas. Reg.
§§1.6041-3 (q), 5f.6045-1 (c) (3) (i) (B), 1.6045-2 (b) (2) (i), or 1.6049-4 (c) (1) (ii), as
appropriate, without obtaining documentation.

Sec. 5.09. Documentation for U.S. Non-Exempt Recipients. QI shall not treat an account
holder as a U.S. non-exempt recipient unless QI obtains a valid Form W-9 from the account holder,
QI knows an account holder is a U.S. non-exempt recipient, or QI must presume a person is a U.S.
non-exempt recipient under sections 5.13 (C) (2) or (4) of this Agreement. See section 6.04 of this
Agreement for rules that apply if the identity of a U.S. non-exempt recipient is prohibited by law
from being disclosed.
Sec. 5.10. Documentation Validity.
(A) In General. QI may not rely on documentation [*64] if QI has actual knowledge, or reason
to know as described in section 5.10 (B) and (C) of this Agreement, that the information or
statements contained in the documentation are unreliable or incorrect. Once QI knows, or has
reason to know, that documentation provided by an account holder is unreliable or incorrect, it can
no longer reliably associate a payment with valid documentation and, therefore, shall treat the
account holder as an undocumented account holder and shall apply the presumption rules of section
5.13 of this Agreement until it obtains valid documentation. In addition, if QI discovers that
information contained in documentation is unreliable or incorrect, QI agrees that it will promptly
provide a withholding agent with corrected information (e.g., corrected withholding rate pools,
corrected Forms W-9, or correct TINs), if necessary for the withholding agent to perform its
obligations, within 30 days after QI discovers that the documentation upon which it has relied is
unreliable or incorrect. If QI receives notification from the IRS that documentation provided by an
account holder is unreliable or incorrect (e.g., that the TIN provided by an account holder is
incorrect) [*65] QI shall follow the procedures set forth in Treas. Reg. §31.3406 (d)-5.
(B) Reason to Know-Direct Account Holders. QI shall be considered to have reason to know
that documentation provided by a direct account holder is unreliable or incorrect only if one or more
of the circumstances described in this section 5.10 (B) apply. If an account holder has provided
documentation that is not reliable under the rules of this section 5.10 (B), QI may require new
documentation. Alternatively, QI may rely on the documentation originally provided if the rules of
this section 5.10 (B) permit such reliance based on additional statements and documentation.
(1) General Rules.
(i) To the extent QI has primary Form 1099 and backup withholding responsibility, QI shall not rely
on a Form W-9 if it is not permitted to do so under the rules of Treas. Reg. §31.3406 (h)-3 (e).
(ii) QI shall not treat documentary evidence provided by an account holder as valid if the
documentary evidence does not reasonably establish the identity of the person presenting the
documentary evidence. For example, documentary evidence is not valid if it is provided in person by
an account holder that is a natural person and the photograph [*66] on the documentary
evidence, if any, does not match the appearance of the person presenting the document.
(iii) QI may not rely on documentation to reduce the withholding rate that would otherwise apply

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under the presumption rules if the account holder's documentation is incomplete, contains
information that is inconsistent with the account holder's claim, QI has other account information
that is inconsistent with the account holder's claim, or the documentation lacks information
necessary to establish entitlement to a reduced rate of withholding. For example, if an account
holder provides documentary evidence to claim treaty benefits and the documentary evidence
establishes the account holder's status as a foreign person and a resident of a treaty country, but
fails to provide the treaty statement in section 5.03 of this Agreement, if required, the documentary
evidence does not establish the account holder's entitlement to a reduced rate of withholding.
However, for purposes of establishing an account holder's status as a foreign person or residency
under an income tax treaty, documentation shall be considered inconsistent only if it is not reliable
under the rules of section 5.10 (B) (2) [*67] and (3) of this Agreement.
(2) Rules Regarding Establishment of Foreign Status.
(i) QI shall not treat documentary evidence provided by an account holder after December 31, 2000,
as valid for purposes of establishing the account holder's foreign status if the only mailing or
residence address that is available to QI is an address at a financial institution (unless the financial
institution is a beneficial owner), an in-care-of address, or a P.O. Box. In this case, QI must obtain
additional documentation that is sufficient to establish the account holder's identity as a foreign
person. QI shall not treat documentary evidence provided by an account holder before January 1,
2001, as valid for purposes of establishing an account holder's status as a foreign person if it has
actual knowledge that a person is a U.S. person or if it has a mailing or residence address for the
account holder in the United States. If QI has an address for the account holder in the United
States, QI may treat the account holder as a foreign person if it can so treat the account holder
under the rules of section 5.10 (B) (2) (ii) of this Agreement.
(ii) QI shall not treat documentation as valid for purposes of establishing [*68] an account
holder's status as a foreign person if QI has a mailing or residence address (whether or not on the
documentation) for the account holder in the United States or if the account holder notifies QI of a
new address in the United States. If the account holder is a natural person, QI may nevertheless
treat the account holder as a foreign person if QI-

(a) Has in its possession or obtains additional documentary evidence (which does not contain a
U.S. address) supporting the claim of foreign status and a reasonable explanation in writing
supporting the account holder's foreign status;

(b) Has in its possession or obtains a valid Form W-8, if the initial documentation provided was
not a Form W-8, and the Form W-8 contains a permanent residence address outside the
United States and a mailing address outside the United States (or if a mailing address is
inside the United States the account holder provides a reasonable explanation in writing
supporting the account holder's foreign status); or

(c) Is required to report annually a payment to the account holder on a tax information
statement in the country in which QI, or a branch of QI, is located; QI is required to file a
copy of that statement [*69] with the tax authority of that country; and that country has
an income tax treaty in effect with the United States.If the documentation is provided by
an entity (other than a flow-through entity), QI may nevertheless treat the account holder
as a foreign person if QI-

(d) Has in its possession, or obtains, documentation that substantiates that the entity is
actually organized or created under the laws of a foreign country;

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(e) Obtains a valid Form W-8, if the initial documentation provided was not a Form W-8, and
the Form W-8 contains a permanent residence outside the United States and a mailing
address outside the United States (or if a mailing address is inside the United States the
account holder provides additional documentary evidence sufficient to establish the account
holder's foreign status); or

(f) Is required to report annually a payment to the account holder on a tax information
statement in the country in which QI, or a branch of QI, is located; QI is required to file a
copy of that statement with the tax authority of that country; and that country has an
income tax treaty in effect with the United States.

(iii) QI shall not treat documentation as valid for purposes of establishing [*70] an account
holder's status as a foreign person if the account holder has standing instructions directing QI to pay
amounts from its account to an address or an account maintained in the United States. QI may treat
documentation as valid for establishing foreign status even though the account holder has such
standing instructions if the account holder provides a reasonable explanation in writing that supports
its foreign status.
(3) Rules for Establishing Residency Under An Income Tax Treaty.
(i) QI shall not treat an account holder as a resident under an income tax treaty if the permanent
residence address on a Form W-8 is not in the applicable treaty country. QI may, however, rely on
the Form W-8 if the account holder provides a reasonable explanation for the permanent residence
address outside the treaty (e.g., the address is the address of a branch located outside the treaty
country in which the entity is a resident) or QI has in its possession, or obtains, documentary
evidence that establishes residency in a treaty country.
(ii) QI shall not treat an account holder as a resident under an income tax treaty if the permanent
residence address on a Form W-8 is in the applicable treaty [*71] country but QI has a mailing or
residence address for the account holder (whether or not contained on the Form W-8) outside the
applicable treaty country. A mailing address that is a P.O. Box, in-care-of address, or address at a
financial institution (if the financial institution is not a beneficial owner) shall not preclude QI from
treating the account holder as a resident of an applicable treaty country if such address is in the
applicable treaty country. If QI has a mailing or residence address for the account holder outside the
applicable treaty country, QI may nevertheless rely on the form if-

(a) QI has in its possession, or obtains, additional documentation supporting the account
holder's claim of residence in the applicable treaty country (and the additional
documentation does not contain an address outside the treaty country);

(b) QI has in its possession, or obtains, documentation that establishes that the account holder
is an entity organized in a treaty country (or an entity managed and controlled in a treaty
country, if the applicable treaty so requires);

(c) QI knows that the address outside the applicable treaty country (other than a P.O. Box, or
in-care-of address) is a branch [*72] of a bank or insurance company; or

(d) QI obtains a written statement from the account holder that reasonably establishes
entitlement to treaty benefits.

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(iii) QI shall not treat documentary evidence as valid for purposes of establishing residency in a
treaty country if QI has a mailing or residence address for the account holder (whether or not on the
documentary evidence) that is outside the applicable treaty country, or the only address that QI has
(whether in or outside of the applicable treaty country) is a P.O. Box, an in-care-of address, or the
address of a financial institution (if the financial institution is not the beneficial owner). QI may
nevertheless rely on the documentary evidence if-

(a) QI has in its possession, or obtains, additional documentary evidence supporting the
account holder's claim of residence in the applicable treaty country (and the documentary
evidence does not contain an address outside the applicable treaty country, a P.O. Box, an
in-care-of address, or the address of a financial institution);

(b) QI has in its possession, or obtains, documentary evidence that establishes that the
account holder is an entity organized in a treaty country (or an entity managed [*73]
and controlled in a treaty country, if the applicable treaty so requires); or

(c) QI obtains a valid Form W-8 that contains a permanent residence address and a mailing
address in the applicable treaty country.

(iv) QI shall not treat documentation as valid for purposes of establishing an account holder's
residence in an applicable treaty country if the account holder has standing instructions for QI to pay
amounts from its account to an address or an account outside the treaty country unless the account
holder provides a reasonable explanation, in writing, establishing the account holder's residence in
the applicable treaty country.
(C) Reason to know-Indirect Account Holders. QI shall be considered to have reason to know
that relevant information or statements contained in documentation provided by an indirect account
holder are unreliable or incorrect if a reasonably prudent person in the position of a qualified
intermediary would question the claims made. QI shall have reason to know that indirect account
holder documentary evidence provided by a nonqualified intermediary or a flow-through entity is
unreliable or incorrect if a nonqualified intermediary or flow-through entity does not [*74] provide
QI with the names of the indirect account holders, their addresses, allocation information allocating
payments to each indirect account holder, and sufficient information for QI to report payments on
Forms 1042-S and Forms 1099. In addition, QI shall have reason to believe that an indirect account
holder is not entitled to a reduced rate of withholding under an income tax treaty if the nonqualified
intermediary or flow-through entity has not provided sufficient information so that QI can verify that
the indirect account holder has provided a TIN, if required, and made the necessary statements
regarding limitations on benefits provisions and deriving the income under section 894 of the Code
and the regulations thereunder.
Sec. 5.11. Documentation Validity Period.
(A) Documentation Other than Form W-9. QI may rely on valid documentary evidence obtained
from account holders in accordance with applicable know-your-customer rules as long as the
documentary evidence remains valid under those rules or until QI knows, or has reason to know,
that the information contained in the documentary evidence is incorrect. QI may rely on the
representations described in section 5.03 of this Agreement [*75] obtained in connection with
such documentation for the same period of time as the documentation. QI may rely on a Form W-8
until its validity expires under Treas. Reg. §1.1441-1 (e) (4) (ii) and may rely on documentary
evidence (other than documentary evidence obtained pursuant to applicable know-your-customer

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rules) until its validity expires under Treas. Reg. § 1.6049-5 (c) (2).
(B) Form W-9. QI may rely on a valid Form W-9 as long as it has not been informed by the IRS or
another withholding agent that the form is unreliable. If QI has primary Form 1099 reporting and
backup withholding responsibility, it may rely on a Form W-9 unless one of the conditions of Treas.
Reg. §31.3406 (h)-3 (e) (2) (i) through (v) apply.
Sec. 5.12. Maintenance and Retention of Documentation.
(A) Maintaining Documentation. QI shall maintain documentation by retaining the original
documentation, a certified copy, a photocopy, a microfiche, or by electronic storage or similar
means of record retention. For accounts opened prior to January 1, 2001, if QI was not required
under its know-your-customer rules to maintain originals or copies of documentation, QI may rely
on its account information if it has complied [*76] with all other aspects of its know-yourcustomer rules regarding establishment of an account holder's identity, it has a record that the
documentation required under the know-your-customer rules was actually examined by an
employee of QI in accordance with the know-your-customer rules, and it has no information in its
possession that would require QI to treat the documentation as invalid under the rules of section
5.10 (B) of this Agreement.
(B) Retention Period. QI shall retain an account holder's documentation obtained under this
section 5 for as long as documentation is required to be retained under know-your-customer rules
identified in the relevant Attachment(s) to this Agreement, whether or not the documentation was
obtained pursuant to those rules.
Sec. 5.13. Application of Presumption Rules.
(A) In General. QI shall apply the presumption rules of section 5.13 (C) of this Agreement if QI
cannot reliably associate a payment with valid documentation from an account holder other than a
nonqualified intermediary or a flow-through entity. The presumption rules cannot be used to grant a
reduced rate of withholding. For example, the portfolio interest exception of sections 871 (h) and
[*77] 881 (c) of the Code shall not apply to a person that is presumed to be foreign. Further, QI
must apply the presumption rules when required and may not rely on its actual knowledge regarding
an account holder's status as a U.S. or foreign person. For example, if the account holder is
presumed to be a U.S. non-exempt recipient, QI must treat the account holder as subject to 31%
backup withholding on a reportable payment even though QI actually knows that the account holder
is a foreign person. Notwithstanding the preceding sentence, QI must rely on its actual knowledge
regarding an account holder rather than what is presumed under section 5.13 (C) of this Agreement
if, based on such knowledge, it should withhold an amount greater than the withholding rate under
the presumption rules or it should report on Form 1042-S or Form 1099 an amount that would
otherwise not be reported. Thus, if an account holder is presumed to be a foreign person with
respect to an amount subject to withholding, QI must treat the account holder as subject to 30
percent withholding and report the payment on Form 1042-S unless QI has actual knowledge that
the account holder is a U.S. non-exempt recipient, in which [*78] case it must withhold 31
percent from the gross amount of the payment and report the payment on Form 1099. Failure to
follow the presumption rule's may result in liability for underwithholding, penalties, and interest.
(B) Reliably Associating a Payment With Documentation. A payment can be reliably
associated with documentation if it is considered reliably associated with documentation under the
rules of Treas. Reg. §1.1441-1 (b) (2) (vii). Generally, QI can reliably associate a payment with
documentation if, for that payment, it holds valid documentation, as described in section 5 of the
Agreement, from an account holder other than a nonqualified intermediary or flow-through entity; it
can reliably determine how much of the payment relates to the valid documentation provided by
such an account holder; and it has no actual knowledge or reason to know that any of the
information or statements in the documentation are incorrect. Sections 5.13 (B) (1)-(5) of this
Agreement describe whether a payment is reliably associated with documentation if the payment is
made to an intermediary or flow-through entity.
(1) Reliably Associating a Payment With Documentation Provided by a Nonqualified

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Intermediary [*79] or a Flow-Through Entity. Generally, QI can reliably associate a payment
with documentation provided by a nonqualified intermediary or a flow-through entity only to the
extent it can reliably associate the payment with a valid Form W-8IMY; it can determine the portion
of the payment that relates to valid documentation, associated with the Form W-8IMY, from an
account holder other than a nonqualified intermediary or flow-through entity; and the nonqualified
intermediary or flow-through entity provides sufficient information for QI to report the payments on
Form 1042-S or Form 1099, if reporting is required. Notwithstanding the preceding sentence, to the
extent a payment is not subject to reporting on Form 1042-S or Form 1099, QI can reliably
associate the payment with valid documentation provided it can determine the portion of the
payment allocable to a group of documented account holders (other than nonqualified intermediaries
or flow-through entities) for whom withholding and reporting is not required. For example, a QI can
treat a payment of deposit interest allocable to a group of documented foreign account holders and
documented U.S. exempt recipients as reliably associated with [*80] valid documentation. If the
documentation attached to a nonqualified intermediary or flow-through entity's Form W-8IMY is
documentation from another nonqualified intermediary or flow-through entity, then the qualified
intermediary must apply the rules of this paragraph to that other nonqualified intermediary or flowthrough entity.
(2) Reliably Associating a Payment With a Withholding Certificate Provided By a Qualified
Intermediary. Generally, QI can reliably associate a payment with documentation provided by
another qualified intermediary that does not assume either primary NRA withholding responsibility
or primary Form 1099 reporting and backup withholding responsibility to the extent the other
qualified intermediary provides a valid Form W-8IMY and a withholding statement that allocates the
payment among withholding rate pools for foreign account holders and withholding rate pools
attributable to each U.S. non-exempt recipient account holder for which the other qualified
intermediary has provided a valid Form W-9. The presumption rules shall not apply, however, even
if a payment cannot be allocated to each U.S. non-exempt recipient account holder to the extent the
alternative procedures [*81] of section 6.03 (B) of this Agreement apply.
(3) Reliably Associating a Payment with Documentation Provided by a Qualified
Intermediary That Assumes Primary NRA Withholding Responsibility. Generally, QI can
reliably associate a payment with valid documentation provided by another qualified intermediary
that assumes primary NRA withholding responsibility, but not primary Form 1099 reporting and
backup withholding responsibility, to the extent it can associate the payment with a valid Form W8IMY and the withholding statement associated with the Form W-8IMY allocates the payment
between a single withholding rate pool attributable to all foreign persons for which the qualified
intermediary assumes primary NRA withholding responsibility and to withholding rate pools
attributable to each U.S. non-exempt recipient account holder for which the other qualified
intermediary has provided a valid Form W-9. The presumption rules shall not apply, however, even
if a payment cannot be allocated to each U.S. non-exempt recipient account holder to the extent the
alternative procedures of section 6.03 (B) of this Agreement apply.
(4) Reliably Associating a Payment With Documentation Provided by a Qualified [*82]
Intermediary that Assumes Primary Form 1099 Reporting and Backup Withholding
Responsibility. Generally, QI can reliably associate a payment with valid documentation provided
by another qualified intermediary that assumes primary Form 1099 reporting and backup
withholding responsibility, but not primary NRA withholding responsibility, to the extent it can
associate the payment with a valid Form W-8IMY and a withholding statement that allocates the
payment among withholding rate pools for foreign account holders.
(5) Reliably Associating a Payment With Documentation Provided by a Qualified
Intermediary that Assumes Both Primary NRA Withholding Responsibility and Primary
Form 1099 Reporting and Backup Withholding Responsibility. Generally, QI can reliably
associate a payment with valid documentation provided by another qualified intermediary that
assumes both primary NRA withholding responsibility and primary Form 1099 reporting and backup
withholding responsibility if QI can associate the payment with a valid Form W-8IMY and a
withholding statement that designates the accounts for which the other qualified intermediary is
acting as a qualified intermediary and is assuming primary NRA [*83] withholding and primary
Form 1099 reporting and backup withholding responsibility.

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(C) Presumption Rules. The presumption rules are as follows:

(1) Payments Made Outside the United States to an Offshore Account of Amounts
Subject to NRA Withholding. An amount that is subject to NRA withholding that is paid
outside the United States to an account that is maintained outside the United States is
presumed made to an undocumented foreign account holder. Therefore, QI must treat the
amount as subject to withholding at a rate of 30 percent on the gross amount paid and
report the payment to an unknown account holder on Form’ 1042-S.

(2) Payments of Deposit Interest and OID on Short-Term Obligations. An amount of
U.S. source deposit interest (other than an amount that is part of the purchase price of a
certificate of deposit sold in a transaction other than a redemption) or an amount of U.S.
source interest or original issue discount on the redemption of a short-term obligation that
is paid outside the United States to an offshore account is presumed made to an
undocumented U.S. non-exempt recipient account holder. QI must backup withhold at 31
percent and report such amounts on Form 1099 unless [*84] it has provided sufficient
information for another payor from which it receives such amounts to backup withhold and
report the payments and QI does not know that the other payor has failed to backup
withhold or report.

(3) Foreign Source Income, Broker Proceeds, and Certain Other Amounts. QI shall
presume that the following payments are made to an exempt recipient provided that such
amounts are paid outside the United States to an account maintained outside the United
States:
(i) Foreign source income;
(ii) Broker proceeds;
(iii) Original issue discount paid in a sale other than a redemption;
(iv) Interest paid as part of the purchase price of an obligation when the instrument
is sold between interest payment dates;
(v) Amounts held on deposit with banks or other financial institutions for two weeks
or less;

(vi) Amounts of original issue discount arising from a sale and repurchase transaction
that is completed within two weeks or less; or

(vii) Amounts described in Treas. Reg. §§1.6049-5 (b) (7), (10), and (11). Such
amounts are not subject to withholding or reporting.

(4) Other Payments. Any payment not covered in sections 5.13 (C) (1), (2) or (3) of this
Agreement shall be presumed made to a U.S. non-exempt [*85] recipient and therefore

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shall be subject to Form 1099 reporting and to backup withholding. Backup withholding
shall not be required, however, if the exception provided in Treas. Reg. §31.3406 (g)-1 (e)
applies. For example, any reportable payment paid inside the United States or paid to a
U.S. account is presumed made to a U.S. non-exempt recipient and shall be subject to
backup withholding and reporting on Form 1099 as paid to an unknown owner.

SECTION 6. QUALIFIED INTERMEDIARY WITHHOLDING CERTIFICATE AND DISCLOSURE OF
ACCOUNT HOLDERS TO WITHHOLDING AGENT
Sec. 6.01. Qualified Intermediary Withholding Certificate. QI agrees to furnish a qualified
intermediary withholding certificate to each withholding agent from which it receives a reportable
amount as a qualified intermediary. The qualified intermediary withholding certificate is a Form W8IMY (or acceptable substitute form) that certifies that QI is acting as a qualified intermediary,
contains QI's QI-EIN, and provides all other information required by the form. QI also agrees to
furnish each withholding agent to whom it provides a Form W-8IMY the withholding statement
described in section 6.02 of this Agreement. QI is not required [*86] to disclose, as part of its
Form W-8IMY or its withholding statement, any information regarding the identity of an account
holder that is a foreign person or a U.S. exempt recipient. However, to the extent it does not
assume primary Form 1099 reporting and backup withholding responsibility, QI must provide to a
withholding agent the Forms W-9 obtained from each U.S. non-exempt recipient account holder on
whose behalf QI receives a reportable amount. If a U.S. non-exempt recipient that must be
disclosed has not provided a Form W-9, QI must, to the extent it has not assumed primary Form
1099 reporting and backup withholding, disclose the name, address, and TIN (if available) to the
withholding agent. QI is not required, however, to disclose the identity of a U.S. non-exempt
recipient if QI is prohibited by law from making the disclosure and QI follows the procedures of
section 6.04 of this Agreement.
Sec. 6.02. Withholding Statement.
(A) In General. QI agrees to provide to each withholding agent from which QI receives reportable
amounts as a qualified intermediary a written statement (the "withholding statement") described in
this section 6.02. The statement forms an integral part of the [*87] Form W-8IMY. The
withholding statement may be provided in any manner, and in any form, to which QI and the
withholding agent mutually agree. For example, QI and the withholding agent may agree to
establish a procedure to furnish withholding statement information electronically. The procedure
must contain sufficient safeguards to ensure that the information received by the withholding agent
is the information sent by
QI and must also document all occasions of user access that result in the submission or modification
of withholding statement information. In addition, the QI and the withholding agent must be capable
of providing a hard copy of all withholding statements provided by the QI. The withholding
statement shall be updated as often as necessary for the withholding agent to meet its reporting
and withholding obligations under this Agreement.
(B) Content of Withholding Statement. The withholding statement must contain sufficient
information for a withholding agent to apply the correct rate of withholding on payments from the
accounts identified on the statement and to properly report such payments on Forms 1042-S and
Forms 1099, as applicable. The withholding statement must-

(1) Designate [*88] those accounts for which QI acts as a qualified intermediary;
(2) Designate those accounts for which QI assumes primary NRA withholding responsibility

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and/or primary Form 1099 reporting and backup withholding responsibility; and

(3) Provide information regarding withholding rate pools, as described in section 6.03 of this
Agreement, if necessary.

Sec. 6.03. Withholding Rate Pools.
(A) In General. QI shall provide as part of its withholding statement withholding rate pool
information in a manner sufficient for the withholding agent to meet its NRA and backup withholding
responsibilities and its Form 1042-S and Form 1099 reporting responsibilities. Withholding rate pool
information is not required to the extent QI has assumed both primary NRA withholding
responsibility and primary Form 1099 reporting and backup withholding responsibility and all the
information required for the withholding agent to report payments on Form 1042-S (e.g., the type of
income) are within the knowledge of the withholding agent. A withholding rate pool is a payment of
a single type of income (e.g., interest, dividends) determined in accordance with the categories of
income reported on Form 1042-S or Form 1099, as [*89] applicable, that is subject to a single
rate of withholding (e.g., 0%, 10%, 15%, or 30%). To the extent QI does not assume primary Form
1099 and backup withholding responsibility, QI's withholding statement must establish a separate
withholding rate pool for each U.S. nonexempt recipient account holder that QI has disclosed to the
withholding agent unless QI uses the alternative procedures in section 6.03 (B) of this Agreement.
QI shall determine withholding rate pools based on valid documentation obtained under section 5 of
this Agreement, or if a payment cannot be reliably associated with valid documentation, on the
presumption rules of section 5.13 (C) of this Agreement. If QI has an account holder that is another
intermediary (whether a qualified intermediary, a non-qualified intermediary, or a private
arrangement intermediary) or a flow-through entity, QI may combine the account holder information
provided by the intermediary or flow-through entity with QI's direct account holder information to
determine QI's withholding rate pools.
(B) Alternative Procedure for U.S. Non-Exempt Recipients. QI may, by mutual agreement
with the withholding agent, establish a single withholding rate [*90] pool (not subject to backup
withholding) for all U.S. non-exempt recipient account holders for whom QI has provided Forms W-9
prior to the withholding agent paying any reportable amounts or, if applicable, designated broker
proceeds. Alternatively, QI may include such U.S. non-exempt recipients in a zero rate withholding
pool that includes U.S. exempt recipients and foreign persons exempt from NRA withholding
provided that all the conditions of this paragraph 6.03 (B) are met. QI may establish a separate
withholding rate pool (subject to 31% withholding) for all U.S. non-exempt recipient account holders
for whom QI has not provided Forms W-9 prior to the withholding agent paying any reportable
amounts or, if applicable, designated broker proceeds. If QI chooses the alternative procedure of
this section 6.03 (B), QI must provide sufficient information to the withholding agent no later than
January 15 of the year following the year in which the reportable amounts and designated broker
proceeds, if applicable, are paid that allocates such payments to each U.S. non-exempt recipient
account holder. Failure to provide such information will result in the application of penalties to the
QI [*91] under sections 6721 and 6722 of the Code and shall constitute an event of default under
section 11.04 of this Agreement.
Sec. 6.04. Legal Prohibitions Against Disclosure of U.S. Non-Exempt Recipients.
(A) Accounts Established Prior to January 1, 2001. If QI knows an account holder is a U.S.
non-exempt recipient and the account holder's account was established with QI prior to January 1,
2001 (a pre-2001 account), QI agrees to the following procedures:

(1) If QI is prohibited by law, including by contract, from disclosing to a withholding agent or
to the IRS on Form 1099 the account holder's name, address, and TIN, for reportable

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payments paid to the account holder, then QI must-

(i) Request from the account holder the authority to make such a disclosure;
(ii) Request from the account holder the authority to sell any assets that generate,
or could generate, reportable payments; or

(iii) Request that the account holder disclose himself by mandating QI to provide a
Form W-9 completed by the account holder.

(2) QI must make the requests described in section 6.04 (A) (1) at least two times during each
calendar year and in a manner consistent with QI's normal communications with the
account holder (e.g., [*92] by mail, telephone, etc.). If QI is not authorized to initiate
communications with the account holder (e.g., QI can only communicate with the account
holder in person), QI must make the request at the time and in the manner that QI is
authorized to communicate with the account holder.

(3) Until QI receives a waiver of all prohibitions against disclosure or authorization to sell all
assets that generate, or could generate, reportable payments, or a mandate from the
account holder to provide a Form W-9, QI shall backup withhold on all reportable payments
paid to the account holder and report those payments on Form 1099 or, in the case of
reportable amounts and designated proceeds, provide another withholding agent with all
the information required for that withholding agent to backup withhold and report the
payments on Form 1099. If the account holder disposes of any assets that generate, or
could generate, reportable payments prior to providing QI with a waiver of all prohibitions
against disclosure or authorization to sell all such assets, QI shall apply backup withholding
and Form 1099 reporting in accordance with sections 3 and 8 of this Agreement.
(4) If QI has not assumed primary Form [*93] 1099 reporting and backup withholding
responsibility but is authorized, or is mandated, to disclose the account holder's name,
address, TIN and reportable amounts (and, designated broker proceeds if section 3.05 (C)
of this Agreement applies) to a withholding agent, QI must provide the account holder's
Form W-9 (or, if a Form W-9 was not obtained, the account holder's name, address, and
TIN, if available) to the withholding agent together with appropriate withholding rate pool
information within 30 days of the date QI receives such authorization.

(5) If QI is authorized to dispose of the account holder's assets that generate, or could
generate, reportable payments, QI must sell or exchange all such assets within 60 days of
receiving authorization. In addition, if QI later discovers that an account contains such
assets, QI must sell such assets within 60 days of the discovery. See sections 3 and 8 of
this Agreement for backup withholding and Form 1099 reporting responsibilities.

(6) If QI is not authorized to disclose the account holder's identity or to sell or exchange all of
the account holder's assets that generate or could generate reportable payments, but QI is
not prohibited by law, [*94] including by contract, from disposing of the account holder's
assets even though it has not obtained specific authorization, QI must sell or exchange all
such assets on or before December 31, 2002, and apply backup withholding and Form
1099 reporting in accordance with sections 3 and 8 of this Agreement.

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(B) Account Holder Discovered to be U.S. Non-Exempt Recipient. If QI's records indicate that
the account holder of a pre-2001 account is a foreign person and the QI discovers that the account
holder is a U.S. non-exempt recipient, QI shall follow the procedures of section 6.04 (A) of this
Agreement, except that if QI may legally sell or exchange the account holder's assets that generate,
or could generate, reportable payments without authorization, QI must sell or exchange all such
assets on or before the date that is 365 days after QI learns that the account holder is a U.S. nonexempt recipient, or, if later, December 31, 2002.
(C) Accounts Opened on or After January 1, 2001. QI agrees to the following procedures for
accounts opened by U.S. non-exempt recipients on or after January 1, 2001 (post-2000 accounts):

(1) If QI is prohibited by law, including by contract, from disclosing to [*95] a withholding
agent or to the IRS on Form 1099 the account holder's name, address, and TIN, for
reportable payments paid to the account holder, then QI must-

(i) Request from the account holder the authority to make such a disclosure;
(ii) Request from the account holder, prior to opening the account, the authority to
exclude from the account holder's account any assets that generate, or could
generate, reportable payments; or (iii) Request that the account holder disclose
himself by mandating QI to transfer a Form W-9 completed by the account
holder.

(2) If QI is authorized to disclose the account holder's name, address, TIN (if available) and
reportable amounts (and designated broker proceeds, if section 3.05 (C) of this Agreement
applies), QI must obtain a valid Form W-9 from the account holder and, to the extent QI
does not have primary Form 1099 and backup withholding responsibility, provide the Form
W-9 to the appropriate withholding agent promptly after obtaining the Form W-9. If a Form
W-9 is not obtained, then QI must provide the account holder's name, address, and TIN, if
any, to the withholding agents from whom QI receives reportable amounts (and, if
applicable, designated broker [*96] proceeds) on behalf of the account holder together
with appropriate withholding rate pool information relating to the account holder. To the
extent QI has assumed primary Form 1099 reporting and backup withholding, it must
backup withhold on all reportable payments until it receives a valid Form W-9.

(3) If QI is not authorized to disclose an account holder's name and other required information
but is authorized to exclude from the account holder's account any assets that generate, or
could generate, reportable payments, QI must follow procedures designed to ensure that it
will not hold any assets that generate, or could generate, reportable payments in the
account holder's account.

(4) If QI is authorized to exclude from the account holder's account any assets that generate,
or could generate, reportable payments and QI discovers that the account contains such
assets, QI must sell such assets within 60 days of discovering such assets and apply
backup withholding and Form 1099 reporting in accordance with sections 3 and 8 of this
Agreement. (5) QI agrees that if any account holder in a post-2000 account is discovered,
after the opening of the account, to be a U.S. non-exempt recipient [*97] then QI will-(i)
Immediately correct the withholding statement information provided to the withholding
agent, if necessary, and (ii) Either obtain a Form W-9 within 60 days of discovering that
the account holder is a U.S. non-exempt recipient, and, if QI has not assumed primary

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Form 1099 reporting and backup withholding responsibility, provide the Form W-9 to the
appropriate withholding agents together with appropriate withholding pool information
promptly after obtaining the Form W-9 or, if QI is not authorized to disclose account holder
information, sell all of the account holder's assets that generate or could generate
reportable payments within 60 calendar days from the day that QI discovers the account
holder is a U.S. non-exempt recipient. QI must backup withhold, or instruct a withholding
agent to backup withhold on any reportable payments made after the time QI discovers the
account holder's U.S. non-exempt recipient status and before obtaining a valid Form W-9
from the account holder.

SECTION 7. TAX RETURN OBLIGATIONS
Sec. 7.01. Form 1042 Filing Requirement.
(A) In general. QI shall file a return on Form 1042, whether or not QI withheld any amounts under
chapter 3 of the Code, [*98] on or before March 15 of the year following any calendar year in
which QI acts as a qualified intermediary. A separate Form 1042 must be filed by each legal entity
that is a qualified intermediary covered by this Agreement. Form 1042 shall be filed at the address
indicated on the form or at any other address at which the IRS notifies QI under the provisions of
section 12.06 of this Agreement. In addition to the information specifically requested on Form 1042
and the accompanying instructions, QI shall attach to the form the following information:

(1) A statement setting forth the amounts of any overwithholding or underwithholding
adjustments made under Treas. Reg. §1.1461-2 and sections 9.02 and 9.05 of this
Agreement, and an explanation of the circumstances that resulted in the over- or underwithholding.
(2) A statement that sets forth the aggregate amounts of reportable payments paid to U.S.
non-exempt recipient account holders, and the number of such account holders, whose
identity is prohibited by foreign law, including by contract, from disclosure. QI must
separately report each type of reportable payment (determined by reference to the types
of income reported on Forms 1099) and [*99] the number of undisclosed account
holders receiving such payments. See section 6.04 of this Agreement.

(B) Extensions For Filing Returns. QI may request an extension of the time for filing Form 1042,
or any of the information required to be attached to the form, by submitting Form 2758, Application
for Extension of Time to File Certain Excise, Income, Information, and Other Returns on or before
the due date of the return. The application must be in writing, properly signed by a duly authorized
agent of QI, and shall clearly set forth the following:

(1) The calendar year for which the extension is requested; and
(2) A full explanation of the reasons for requesting the extension to assist the IRS in
determining the period of extension, if any, that will be granted.

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Sec. 7.02. Form 945 Filing Requirement. QI shall file a return on Form 945 on or before January
31 following the calendar year in which QI backup withheld any amount under section 3406 of the
Code. Separate Forms 945 must be filed by each legal entity that is a qualified intermediary covered
by this Agreement. The form must be filed at the address specified in the instructions for Form 945
or at any other address at which the IRS [*100] notifies QI under the provisions of section 12.06
of this Agreement.
Sec. 7.03. Retention of Returns. QI shall retain Forms 945 and 1042 for the applicable statute of
limitations on assessments and collection under section 6501 of the Code.
SECTIONS 8. INFORMATION REPORTING OBLIGATIONS
Sec. 8.01. Form 1042-S Reporting. Except as otherwise provided in section 8.02 of this
Agreement, QI is not required to file Forms 1042-S for amounts paid to each separate account
holder for whom such reporting would otherwise be required. Instead, QI shall file a Form 1042-S
reporting the pools of income ("reporting pools") as determined in section 8.03 of this Agreement.
QI must file its Forms 1042-S in the manner required by the regulations under chapter 3 of the Code
and the instructions to the form, including any requirement to file the forms magnetically or
electronically. Separate Forms 1042-S must be filed by each legal entity that is a qualified
intermediary covered by this Agreement. Each qualified intermediary covered by this Agreement
may, however, allow its individual branches to file Forms 1042-S provided that all Forms 1042-S
contain the QI-EIN of the legal entity of which the branch forms [*101] a part. Any Form 1042-S
required by this section 8 shall be filed on or before March 15 following the calendar year in which
the payment reported on the form was made. QI may request an extension of time to file Forms
1042-S by submitting Form 8809, Request for Extension of Time to File Information Returns, by the
due date of Forms 1042-S in the manner required by Form 8809.
Sec. 8.02. Recipient Specific Reporting. QI (whether or not it assumes primary NRA withholding
responsibility) is required to file separate Forms 1042-S for amounts paid to each separate account
holder as described in this section 8.02. QI must file separate Forms 1042-S by income code,
exemption code, recipient code, and withholding rate.
(A) QI must file separate Forms 1042-S for each qualified intermediary or withholding foreign
partnership account holder that receives an amount subject to NRA withholding from QI (or from a
PAI of QI), whether such account holder is a direct or indirect account holder.
(B) QI must file separate Forms 1042-S for each foreign account holder of a nonqualified
intermediary or foreign interest holder of a flow-through entity receiving an amount subject to NRA
withholding (whether the [*102] nonqualified intermediary or flow-through entity is a direct or
indirect account holder) to the extent QI can reliably associate such amounts with valid
documentation from an account holder that is not itself a nonqualified intermediary or flow-through
entity. In addition, QI must file separate Forms 1042-S for each foreign account holder of a
nonqualified intermediary or foreign interest holder of a flow-through entity that is an account
holder of a PAI of QI (whether the nonqualified intermediary or flow-through entity is a direct or
indirect account holder of the PAI) to the extent QI can reliably associate the amounts subject to
NRA withholding with valid documentation from an account holder that is not itself a nonqualified
intermediary or flow-through entity.
(C) QI must file separate Forms 1042-S made out to an unknown recipient for amounts subject to
withholding paid to a nonqualified intermediary or flow-through entity (whether the nonqualified
intermediary or flow-through entity is a direct or indirect account holder), to the extent that QI
cannot reliably associate such amounts with valid documentation from the account holders of the
nonqualified intermediary or the interest [*103] holders of the flow-through entity. In addition, QI
must file separate Forms 1042-S made out to unknown recipient for amounts subject to withholding
paid to a nonqualified intermediary or flow-through entity that is a direct or indirect account holder
of a PAI of QI to the extent that QI cannot reliably associate such amounts with valid documentation
from the account holders of such nonqualified intermediary or the interest holders of the flowthrough entity.

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Sec. 8.03. Reporting Pools for Form 1042-S Reporting. Except for amounts required to be
reported under section 8.02 of this Agreement, QI shall report all amounts subject to NRA
withholding by reporting pools on a Form 1042-S if those amounts are paid to direct account holders
of QI or to direct account holders of a PAI of QI that are (or are presumed to be) foreign persons. A
separate Form 1042-S shall be filed for each type of reporting pool. A reporting pool consists of
income that falls within a particular withholding rate and within a particular income code, exemption
code, and recipient code as determined on Form 1042-S. QI may use a single recipient code for all
reporting pools except for amounts paid to foreign tax-exempt [*104] recipients, for which a
separate recipient code must be used. For this purpose, a foreign tax-exempt recipient includes any
organization that is not subject to NRA withholding and is not liable to tax in its country of residence
because it is a charitable organization, a pension fund, or a foreign government.
Sec. 8.04. Form 1099 Reporting Responsibility. QI shall file Forms 1099 and, unless filing
magnetically, Form 1096, for reportable payments made to the persons specified in this section
8.04. Forms 1099 shall be filed on or before the date prescribed for the particular Form 1099 under
chapter 61 of the Code and in the manner required by regulations under chapter 61 of the Code and
the instructions to the forms, including any requirement to file the forms magnetically or
electronically. Extensions of the time to file Forms 1099 may be requested by submitting Form
8809, Request for Extension of Time to File Information Returns, in the manner required by the
form. If QI is required to file Forms 1099, it must file the appropriate form for the type of income
paid (e.g., Form 1099-DIV for dividends, Form 1099-INT for interest, Form 1099-B for broker
proceeds). QI must file Forms 1099 [*105] in the situations listed in sections 8.04 (A) through (E)
of this Agreement regardless of whether it assumes primary Form 1099 reporting and backup
withholding responsibility unless otherwise provided in those sections.
(A) QI must file a Form 1099 made out to an unknown owner for the aggregate amount of a
particular type of reportable amount paid to account holders that are U.S. nonexempt recipients
(whether direct or indirect account holders) whose identity and account information are prohibited
by law, including by contract, from being disclosed. However, QI is not required to file a Form 1099
for, or backup withhold on, a reportable amount to the extent QI has provided sufficient information
to another payor for that payor to report the reportable amount as paid to an unknown owner and to
backup withhold on the reportable amount and QI does not know that the other payor has failed to
report or backup withhold.
(B) QI must file a Form 1099 made out to an unknown owner on the aggregate amount of a
reportable payment that is not a reportable amount paid to a U.S. non-exempt recipient (whether a
direct or indirect account holder) whose identity and account information are prohibited [*106] by
law, including by contract, from disclosure. Notwithstanding the previous sentence, QI is not
required to report on Form 1099 and backup withhold on designated broker proceeds to the extent
the designated broker proceeds provisions of section 3.05 of this Agreement apply and QI does not
know that the other payor has failed to report or backup withhold.
(C) QI must file a Form 1099 for a reportable amount paid to each U.S. nonexempt recipient
account holder (whether a direct or indirect account holder) whose identity and account information
are not prohibited by foreign law, including by contract, from disclosure and for whom QI has not
provided a Form W-9 to a withholding agent or has not provided the account holder's name,
address, TIN (if available) and withholding rate pool information to a withholding agent.
(D) QI must file a Form 1099 for a reportable payment (other than a reportable amount) paid to
each U.S. non-exempt recipient (whether a direct or indirect account holder), or to any account
holder that is presumed to be a U.S. non-exempt recipient, whose identity and account information
are not prohibited by foreign law, including by contract, from disclosure. Notwithstanding [*107]
the previous sentence, QI is not required to report on Form 1099 or backup withhold on designated
broker proceeds paid to a U.S. non-exempt recipient if the procedures of section 3.05 of this
Agreement apply and QI does not know that the other payor has failed to report or backup withhold.
(E) QI must file a Form 1099 for account holders (whether direct or indirect) that are, or are
presumed to be, U.S. non-exempt recipients that receive reportable amounts for which QI has

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assumed primary Form 1099 reporting and backup withholding responsibility.
(F) QI must file a Form 1099 for an account holder (whether direct or indirect) that is a U.S. person
(whether exempt or non-exempt) if QI has made a reportable payment to which it applied backup
withholding and QI has not reported the amount under section 8.04 (A)-(E) of this Agreement.
SECTION 9. ADJUSTMENTS FOR OVER-AND UNDER-WITHHOLDING; REFUNDS
Sec. 9.01. Adjustments for NRA Over-withholding by Withholding Agent. QI may request a
withholding agent to make an adjustment for amounts paid to QI on which the withholding agent
has overwithheld under chapter 3 of the Code by applying either the reimbursement procedure
described in section 9.01 (A) [*108] of this Agreement or the set-off procedure described in
section 9.01 (B) of this Agreement within the time period prescribed for those procedures. Nothing
in this section shall be interpreted to require a withholding agent to apply the reimbursement or set
off procedures under sections 9.01 (A) or (B) of this Agreement.
(A) Reimbursement Procedure. QI may request a withholding agent to repay QI for any amount
overwithheld under chapter 3 of the Code and for the withholding agent to reimburse itself under
the reimbursement procedures of Treas. Reg. §1.1461-2 (a) (2) (i) by making the request to the
withholding agent prior to the due date for filing the Form 1042 and Form 1042-S (without regard to
extensions) for the calendar year of overwithholding.
(B) Set-off Procedure. QI may request a withholding agent to repay QI by applying the amount
overwithheld against any amount which otherwise would be required to be withheld under chapter 3
of the Code from income paid by the withholding agent to QI. QI must make the request before the
earlier of the due date (without regard to extensions) for the withholding agent to file Form 1042-S
for the calendar year of overwithholding or the date that [*109] the Form 1042-S is actually filed
with the IRS.
Sec. 9.02. Adjustments for NRA Overwithholding by QI. QI may make an adjustment for
amounts paid to its account holders that it has overwithheld under chapter 3 of the Code by
applying either the reimbursement or set-off procedures described in this section within the time
period prescribed for those procedures.
(A) Reimbursement Procedure. QI may repay its account holders for an amount overwithheld
and reimburse itself by reducing, by the amount of tax actually repaid to the account holders, the
amount of any subsequent deposit of tax required to be made by QI under section 3.08 of this
Agreement. For purposes of this section 9.02 (A), an amount that is overwithheld shall be applied in
order of time to each of the QI's subsequent deposit periods in the same calendar year to the extent
that the withholding taxes required to be deposited for a subsequent deposit period exceed the
amount actually deposited. An amount overwithheld in a calendar year may be applied to deposit
periods in the calendar year following the calendar year of overwithholding only if:

(1) QI states on a Form 1042-S (issued, if applicable, to the account holders of the [*110]
income or otherwise to a reporting pool), filed by March 15 of the calendar year following
the calendar year of overwithholding, the amount of tax withheld and the amount of any
actual repayments; and

(2) QI states on a Form 1042, filed by March 15 of the calendar year following the calendar
year of overwithholding, that the filing of the Form 1042 constitutes a claim for credit in
accordance with Treas. Reg. §1.6414-1.

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(B) Set-Off Procedure. QI may repay its account holders by applying the amount overwithheld
against any amount which otherwise would be required under chapter 3 of the Code to be withheld
from a payment made by QI to the account holders before the earlier of March 15 of the calendar
year following the calendar year of overwithholding or the date that the Form 1042-S is actually filed
with the IRS. For purposes of making a return on Form 1042 or 1042-S for the calendar year of
overwithholding, and for purposes of making a deposit of the amount with-held, the reduced amount
shall be considered the amount required to be withheld from such income under chapter 3 of the
Code.
Sec. 9.03. Repayment of Backup Withholding. If QI erroneously withholds, as defined under
Treas. Reg. §31.6413 (a)-3, [*111] an amount under section 3406 of the Code from an account
holder, QI may refund the amount erroneously withheld as provided in Treas. Reg. §31.6413 (a)-3.
Sec. 9.04. Collective Credit or Refund Procedures for NRA Overwithholding. If there has
been overwithholding under chapter 3 of the Code on amounts subject to NRA withholding paid to
QI's account holders during a calendar year and the amount has not been recovered under the
reimbursement or set-off procedures under sections 9.01 or 9.02 of this Agreement, QI may request
a credit or refund of the total amount overwithheld by following the procedures of this section 9.04.
QI shall not include in its collective refund claim payments made to an indirect account holder or to
a direct account holder that is a nonqualified intermediary or flow-through entity. QI shall follow the
procedures set forth under sections 6402 and 6414 of the Code, and the regulations thereunder, to
claim the credit or refund. No credit or refund will be allowed after the expiration of the statutory
period of limitation for refunds under section 6511 of the Code. QI may use the collective refund
procedures under this section 9.04 only if the following conditions are [*112] met:

(A) QI must not have issued Forms 1042-S to the account holders that received the payment
that was subject to overwithholding;

(B) QI must submit together with its amended return on which it claims a credit or refund a
statement of the reason for the overwithholding;

(C)QI must submit together with its amended return on which it claims a credit or refund a
statement that it has repaid the amount of overwithholding to the appropriate account
holders prior to filing the claim for credit or refund; and

(D)QI must retain a record showing that it repaid the account holders the amount of the
overwithholding.

Sec. 9.05. Adjustments for NRA Under-withholding. If QI knows that an amount should have
been withheld under chapter 3 of the Code from a previous payment to an account holder but was
not withheld, QI may either withhold from future payments made to the same account holder or
satisfy the tax from property that it holds in custody for the account holder or property over which it
has control. The additional withholding or satisfaction of the tax owed may only be made before the
due date of the Form 1042 (not including extensions) for the calendar year in which the
underwithholding occurred. [*113] QI's responsibilities will be met if it informs a withholding
agent from which it received the payment of the underwithholding and the withholding agent
satisfies the under-withholding.
Sec. 9.06. NRA Underwithholding After Form 1042 Filed. If, after a Form 1042 has been filed
for a calendar year, QI, QI's external auditor, or the IRS determines that, due to QI's failure to carry
out its obligations under this Agreement, QI has under-withheld tax for such year, QI shall file an

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amended Form 1042 to report and pay the underwithheld tax. QI shall pay the underwithheld tax,
the interest due on the underwithheld tax, and any applicable penalties, at the time of filing the
amended Form 1042. If QI fails to file an amended return, the IRS shall make such return under
section 6020 of the Code. See section 10.04 of this Agreement for procedures that apply if
underwithholding is discovered as part of a statistical sampling of accounts.
Sec. 9.07. Special Rule Regarding Failure to Deposit Penalties. Solely for purposes of applying
section 6656 of the Code (failure to make deposit of taxes), neither QI nor its withholding agent will
be considered to have made an underpayment of a deposit of NRA [*114] withholding taxes if the
conditions of this paragraph are met. The conditions of this paragraph are that-

(A) The withholding agent or QI makes its deposits within the time (deposit period) required by
section 6302 of the Code, or if applicable, section 3.08 of this Agreement;

(B) The deposit is not less than 90 percent of the aggregate amount of the tax required to be
withheld under chapter 3 of the Code during the deposit period applicable to the
withholding agent or QI; and

(C)QI and the withholding agent determine the difference between the total amount required
to be deposited and the amount actually deposited as of the end of the 3rd, 6th, 9th, and
12th months of the calendar year and the difference is deposited no later than the 15th
day of the second following month (i.e., May 15, August 15, November 15 and February
15, respectively). In determining whether there has been an underpayment,
reimbursements and set-offs shall be taken into account.

SECTION 10. EXTERNAL AUDIT PROCEDURES
Sec. 10.01. In General. Unless QI requests an IRS audit in lieu of an external audit, the IRS
agrees not to conduct an onsite audit of QI, or any PAI with which QI has an agreement, with
respect to withholding [*115] and reporting obligations covered by this Agreement provided that
an external auditor designated in Appendix B of this Agreement conducts an audit of QI, and any
PAI, in accordance with this section 10. QI shall permit the external auditor to have access to all
relevant records of QI for purposes of performing the external audit, including information regarding
specific account holders. QI shall permit the IRS to communicate directly with the external auditor
and to review the audit procedures followed by the external auditor. QI represents that there are no
legal prohibitions that prevent the external auditor from examining any information relevant to the
external audit to be performed under this section 10 and that there are no legal prohibitions that
prevent the IRS from communicating directly with the auditor. QI shall permit the IRS to examine
the external auditor's work papers and reports. However, the external auditor is not required to
divulge the identity of QI's account holders to the IRS.
Sec. 10.02. Designation of External Auditor. QI's external auditor must be one of the auditors
listed in Appendix B of this Agreement, unless QI and the IRS agree, prior to the audit, to [*116]
substitute another auditor. QI shall not propose an external auditor unless it has a reasonable belief
that the auditor is subject to laws, regulations, or rules that impose sanctions for failure to exercise
its independence and to perform the audit competently. The IRS has the right to reject a proposed
external auditor, or to revoke its acceptance of an external auditor, if the IRS, in its sole discretion,
reasonably believes that the auditor is not independent or cannot perform an effective audit under
this Agreement.
Sec. 10.03. Timing and Scope of External Audits. QI shall have the external auditor conduct an

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audit of the second full calendar year and the fifth full calendar year that this Agreement is in effect,
subject to section 10.06 of this Agreement. The external auditor shall verify whether QI is in
compliance with this Agreement by conducting an audit that meets the requirements of this section
10.03. The external auditor shall verify whether QI is in compliance with its QI agreement by
providing a report to the IRS. The report must be received by the IRS, at the address set forth in
section 12.06 of this Agreement, no later than June 30 of the year following the year being [*117]
audited. The IRS may, however, upon request by the external auditor, extend the due date of the
audit report upon good cause. The report must disclose that the external auditor has, at a minimum,
performed the following checks listed in this paragraph 10.03, and set forth how each of those
checks was performed and the results of the checks. QI's (or a PAI's) external auditor is encouraged
to contact the IRS at the address set forth in section 12.06 of this Agreement and submit an audit
plan (which includes, if relevant, the extent to which the external auditor proposes to rely on QI's
internal audit procedures) prior to performing the audit so that the audit may be conducted in the
most efficient and least costly manner possible.
(A) Documentation. The external auditor must-

(1) Verify that QI has training materials, manuals, and directives that instruct the appropriate
QI employees how to request, collect, review, and maintain documentation in accordance
with this Agreement;

(2) Review QI's account opening procedures and interview QI's employees, to determine if
appropriate documentation is requested from account holders and, if obtained, that it is
reviewed and maintained in accordance [*118] with this Agreement;

(3) Verify that QI follows procedures designed to inform account holders that claim a reduced
rate of withholding under an income tax treaty about any applicable limitation on benefits
procedures;

(4) Review QI's accounts, using a valid sample of accounts for which treaty benefits are
claimed, to ensure that QI is obtaining the treaty statements required by section 5.03 (B);

(5) Review information, using a valid sample, contained in account holder files to determine if
the documentation validity standards of section 5.10 of this Agreement are being met. For
example, the external auditor must verify that changes in account holder information (e.g.,
a change of address to a U.S. address or change of account holder status from foreign to
U.S.) are being conveyed to QI's withholding agent, or, if QI assumes primary NRA
withholding responsibility or primary Form 1099 reporting and backup withholding
responsibility, that QI is applying the appropriate withholding rate;

(6) Review accounts, using a valid sample of U.S. non-exempt recipient account holders, to
determine if QI is obtaining Forms W-9 from those customers whose identity is not
prohibited by law from disclosure, and [*119] that QI is transmitting those forms to a
withholding agent to the extent QI does not assume primary Form 1099 reporting and
backup withholding responsibility with respect to reportable amounts and, if applicable,
designated broker proceeds;

(7) Review accounts, using a valid sample of U.S. non-exempt recipient account holders whose
identity and account information is prohibited by law, including by contract, from
disclosure, to verify that-

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(i) Such accounts exist in only rare and unusual circumstances (and detailing in the
audit report the nature of such circumstances); and

(ii) The procedures of section 6.04 have been, and are being, followed.
(8) Review QI's agreements with its PAIs to ensure that the obligations imposed on the PAIs
are identical to the obligations imposed on QI under this Agreement, except as otherwise
provided in section 4.02.

(9) State in its external audit report if the auditor is aware that QI is in material violation or is
under investigation for violation of any of the know-your-customer rules, practices, or
procedures applicable to the offices audited.

(10)State in its external audit report if the auditor is aware that QI removes U.S. non-exempt
recipients from accounts [*120] covered by this Agreement for the purpose of
circumventing the Form 1099 reporting and backup withholding provisions of this
Agreement.

(B) Withholding Rate Pools. The external auditor must-

(1) Verify that QI has training materials, manuals, and directives that instruct the appropriate
QI employees how to determine withholding rate pools based on documentation and the
presumption rules;

(2) Interview employees responsible for determining withholding rate pools to ascertain if they
are adequately trained to determine those pools and that they follow adequate procedures
for determining those pools;

(3) Review QI's procedures for preparing the withholding statements associated with QI's
Forms W-8IMY and verify that the withholding statements provided to withholding agents
convey complete and correct information on a timely basis;

(4) Perform test checks, using a valid sample of account holders assigned to each withholding
rate pool, and cross check that assignment against the documentation provided by, or
presumption rules that apply to, the account holder, the type of income earned, and the
withholding rate applied;

(5) Perform test checks, using a valid sample of accounts of U.S. non-exempt recipients,
[*121] to verify that appropriate withholding rate pools are established for U.S. nonexempt recipients; and

(6) Verify, if QI is using the alternative procedure for U.S. non-exempt recipients contained in
section 6.03 (B) of this Agreement, that QI is providing sufficient and timely information to

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withholding agents that allocates reportable payments to U.S. non-exempt recipients.

(C) Withholding Responsibilities. The external auditor must-

(1) To the extent QI has assumed primary NRA withholding responsibility, perform test checks,
using a valid sample of foreign account holders, to verify that QI is withholding the proper
amounts;

(2) To the extent QI has not assumed primary NRA withholding responsibility, verify that QI
has fulfilled its responsibilities under section 3.02 of this Agreement;

(3) To the extent QI has assumed primary Form 1099 reporting and backup withholding
responsibility, perform test checks using a valid sample of U.S. non-exempt recipient
account holders to verify that QI backup withheld when required;

(4) To the extent QI has not assumed primary Form 1099 reporting and backup withholding
responsibility, perform test checks using a valid sample of U.S. non-exempt account
holders [*122] to verify that QI has fulfilled its backup withholding responsibilities under
sections 3.04, 3.05 and 3.06 of this Agreement;

(5) Review the accounts of U.S. non-exempt recipient account holders whose identity is
prohibited by law, including by contract, from disclosure and verify that QI or another
payor is backup withholding on reportable payments made to such account holders;

(6) Review a valid sample of accounts of U.S. non-exempt recipient account holders and
determine if assets that generate or could generate reportable payments are held in an
account of any U.S. non-exempt recipient account holders whose identity is prohibited by
law, including by contract, from disclosure, and ascertain the reason why such assets have
not been disposed of or the account holder disclosed; and

(7) Verify that amounts withheld were timely deposited in accordance with section 3.08 of this
Agreement.

(D) Return Filing and Information Reporting. The external auditor must-

(1) Obtain copies of original and amended Forms 1042 and Forms 945, and any schedules,
statements, or attachments required to be filed with those forms, and determine whether
the amounts of income, taxes, and other information reported on [*123] those forms are
accurate by-

(i) Reviewing work papers;

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(ii) Reviewing Forms W-8IMY, together with the associated withholding statements,
that QI has provided to withholding agents;

(iii) Reviewing copies of Forms 1042-S that withholding agents have provided QI;
(iv) Reviewing account statements from withholding agents;
(v) Reviewing correspondence between QI and withholding agents; and (vi)
Interviewing personnel responsible for preparing the Forms 1042 and 945 and the
work papers used to prepare those forms.

(2) Obtain copies of original and corrected Forms 1042-S and Forms 1099 together with the
work papers used to prepare those forms and determine whether the amounts reported on
those forms are accurate by-

(i) Reviewing the Forms 1042-S received from withholding agents;
(ii) Reviewing the Forms W-8IMY, and the associated withholding statements, that
QI has provided withholding agents;

(iii) Reviewing a valid sample of account statements issued by QI to account holders;
and

(iv) Interviewing QI's personnel responsible for preparing the Forms 1042-S and, if
applicable, Forms 1099, and the work papers used to prepare those forms.
(3) Thoroughly review the statements attached to amended Forms 1042 filed [*124] to
claim a refund, ascertain their veracity, and determine the causes of any overwithholding
reported and ensure QI did not issue Forms 1042-S to persons whom it included as part of
its collective credit or refund.

(4) Determine, in the case of collective credits or refunds, that QI repaid the appropriate
account holders prior to requesting a collective refund or credit.

(E) Change in Circumstances. The external auditor must verify that in the course of the audit it
has not discovered any significant change in circumstances, as described in section 11.03 (A), (D),
or (E) of this Agreement.
Sec. 10.04. Use of Statistical Sampling. If the external auditor is required to make a
determination based on a valid sample of accounts, it shall use a statistical sampling whenever an
examination of all of accounts within a particular class of accounts would be prohibitive in terms of
time and expense. If it is reasonable to examine all accounts in connection with a particular issue,
statistical sampling techniques shall not be used. If statistical sampling techniques are required, the
external auditor must determine a sample size that provides a 95 percent confidence level. If
statistical sampling [*125] has been used and the auditor determines that underwithholding has
occurred with respect to the sampled accounts, the IRS will determine the total amount of

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underwithheld tax by projecting the underwithholding over the entire population of similar accounts.
For this purpose, QI agrees to provide the IRS with the information (e.g., number of accounts and
amounts) required to project the underwithholding. QI shall either report and pay, in accordance
with section 9.06 of this Agreement, the underwithheld tax determined under the IRS projection or
propose another amount of underwithholding based on a more accurate population, a more accurate
projection technique, or an examination of all similar accounts. If the IRS does not agree with the
amount proposed by QI, the IRS shall assess a tax by making a return under section 6020 of the
Code.
Sec. 10.05. External Auditor's Report. Upon completion of the audit of QI and any PAI, the
external auditor shall issue a report, or reports, of audit findings directly to the IRS by sending the
original report to the IRS at the address set forth in section 12.06 of this Agreement by June 30
following the calendar year being audited, or if that date falls [*126] on a Saturday or Sunday,
the next U.S. business day. The report must be in writing, in English, and currency amounts must
be stated in U.S. dollars. The report must fully describe the scope of the audit, the methodologies
(including sampling techniques) used to determine whether QI is in compliance with the provisions
of this Agreement, and the result of each such determination. The report must also specifically
address each of the items in section 10.03 of this Agreement.
Sec. 10.06. Expanding Scope and Timing of External Audit. Upon review of the external
auditor's report, the IRS may request, and QI must permit, the external auditor to perform
additional audit procedures, or to expand the external audit to cover some or all of the calendar
years for which the period of limitations for assessment of taxes has not expired. In addition, the
IRS may request, and QI agrees to permit, the external auditor to perform an audit for one or more
calendar years not scheduled for audit under section 10.03 of this Agreement.
SECTION 11. EXPIRATION, TERMINATION AND DEFAULT
Sec. 11.01. Term of Agreement. This Agreement shall be in effect on and shall expire on
December 31 of the fifth full calendar [*127] year after the year in which this Agreement first
takes effect. This Agreement may be renewed as provided in section 11.06 of this Agreement.
Sec. 11.02. Termination of Agreement. This Agreement may be terminated by either the IRS or
QI prior to the end of its term by delivery of a notice of termination to the other party in accordance
with section 12.06 of this Agreement. The IRS, however, shall not terminate the Agreement unless
there has been a significant change in circumstances, as defined in section 11.03 of this Agreement,
or an event of default has occurred, as defined in section 11.04 of this Agreement, and the IRS
determines, in its sole discretion, that the significant change in circumstances or the event of default
warrants termination of this Agreement. In addition, the IRS shall not terminate this Agreement in
the event of default if QI can establish to the satisfaction of the IRS that all events of default for
which it has received notice have been cured within the time period agreed upon. The IRS shall
notify QI, in accordance with section 11.05 of this Agreement, that an event of default has occurred
and that the IRS intends to terminate the Agreement unless QI cures [*128] the default. A notice
of termination sent by either party shall take effect on the date specified in the notice.
Sec. 11.03. Significant Change in Circumstances. For purposes of this Agreement, a significant
change in circumstances includes, but is not limited to-

(A) An acquisition of all, or substantially all, of QI's assets in any transaction in which QI is not
the surviving legal entity;
(B) A change in U.S. federal law or policy, or applicable foreign law or policy, that affects the
validity of any provision of this Agreement, materially affects the procedures contained in
this Agreement, or affects QI's ability to perform its obligations under this Agreement;

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(C)A ruling of any court that affects the validity of any provision of this Agreement;
(D)A material change in the know-your-customer rules and procedures set forth in any
Attachment to this Agreement; or

(E) A significant change in QI's business practices that affects QI's ability to meet its
obligations under this Agreement.

Sec. 11.04. Events of Default. For purposes of this Agreement, an event of default occurs if QI
fails to perform any material duty or obligation required under this Agreement, and includes, but is
not limited [*129] to, the occurrence of any of the following:

(A) QI fails to implement adequate procedures, accounting systems, and internal controls to
ensure compliance with this Agreement;
(B) QI underwithholds an amount that QI is required to withhold under chapter 3 of the Code
and fails to correct the underwithholding or to file an amended Form 1042 reporting, and
paying, the appropriate tax;
(C)QI underwithholds an amount that QI is required to backup withhold under section 3406 of
the Code;

(D)QI makes a misrepresentation on Forms W-8IMY or the associated withholding statement
that results in underwithholding by a withholding agent;

(E) QI makes excessive refund claims;
(F) Documentation described in section 5 of this Agreement is lacking, incorrect, or unreliable
for a significant number of direct account holders;

(G)QI fails to timely file Forms 945, 1042, 1042-S, or 1099 or files forms that are materially
incorrect or fraudulent or fails to provide information necessary for a withholding agent or
payor to file Forms 1099 with respect to disclosed U.S. persons;

(H)QI fails to have an external audit performed when required, QI's external auditor fails to
provide its report directly to the IRS on a timely [*130] basis, QI fails to cooperate with
the external auditor, or QI or its external auditor fails to cooperate with the IRS;

(I) QI fails to disclose to a withholding agent, or to the IRS, U.S. nonexempt recipient account
holders to the extent the disclosure is not prohibited by foreign law, including by contract;

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(J) QI fails to inform the IRS of any change in the know-your-customer rules described in any
Attachment to this Agreement within 90 days of the change becoming effective;

(K)QI fails to inform the IRS within 90 days of any significant change in its business practices
to the extent that change affects QI's obligations under this Agreement;

(L) QI fails to inform the IRS of any private arrangement, as described in section 4 of this
Agreement;
(M)QI fails to cure a default identified by the IRS or by an external auditor;
(N)QI makes any fraudulent statement or a misrepresentation of material fact with regard to
this Agreement to the IRS, a withholding agent, or QI's external auditor;

(O)The IRS determines that QI's external auditor is not sufficiently independent to adequately
perform its audit function or the external auditor fails to provide an audit report that
complies with section 10 [*131] of this Agreement;

(P) An intermediary with which QI has a PAI agreement is in default with that agreement and
QI fails to meet its obligation to terminate that agreement within the time period specified
in section 4.03 of this Agreement;

(Q)QI has not complied with the procedures of section 6.04 of this Agreement or has any
undisclosed U.S. non-exempt recipients (except in rare and unusual circumstances) whose
accounts contain assets that generate, or could generate, reportable payments;

(R)QI is prohibited by any law from disclosing the identity of an account holder or account
information to QI's external auditor;

(S) QI, to the extent it has primary Form 1099 reporting and backup withholding responsibility,
fails to comply with the requirements of chapter 61 and section 3406 of the Code;

(T) QI, to the extent that it elects the alternative withholding rate pool procedures of section
6.03 (B) of this Agreement (regarding U.S. non-exempt recipient account holders) fails to
provide allocation information by January 15th as required by that section;

(U)QI fails to make deposits in the time and manner required by section 3.08 of this
Agreement or fails to make adequate deposits, taking into account [*132] the
procedures of 9.07 of this Agreement; (V) QI fails to permit the external auditor to perform
additional audit procedures, or to expand the external audit to cover some or all of the
calendar years for which the period of limitations for assessment of taxes has not expired
under the provisions of section 10.06 of this Agreement; or
(W)QI removes U.S. non-exempt recipients from accounts covered by this Agreement for the
purpose of circumventing the Form 1099 reporting and backup withholding provisions of
this Agreement.

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Sec. 11.05. Notice and Cure. Upon the occurrence of an event of default, the IRS may deliver to
QI a notice of default specifying the event of default that has occurred. QI shall respond to the
notice of default within 60 days (60-day response) from the date of the notice of default. The 60day response shall contain an offer to cure the event of default and the time period in which the
cure will be accomplished or shall state the reasons why QI does not agree that an event of default
has occurred. If QI does not provide a 60-day response, the IRS may deliver a notice of termination
as provided in section 11.02 of this Agreement. If QI provides a 60-day response, the [*133] IRS
shall either accept or reject QI's statement that no default has occurred or accept or reject QI's
proposal to cure an event of default. If the IRS rejects QI's contention that no default has occurred
or rejects QI's proposal to cure a default, the IRS will offer a counter-proposal to cure the event of
default. Within 30 days of receiving the IRS's counter-proposal, QI shall notify the IRS (30-day
response) whether it continues to maintain that no default has occurred or whether it rejects the
IRS's counter-proposal to cure an event of default. If QI's 30-day response states that no default
has occurred or it rejects the IRS's counter-proposal to cure, the parties shall seek to resolve their
disagreement within 30 days of the IRS's receipt of QI's 30-day response. If a satisfactory resolution
has not been achieved at the end of this latter 30-day period, or if QI fails to provide a 30-day
response, the IRS may terminate this Agreement by providing a notice of termination in accordance
with section 11.02 of this Agreement. If QI receives a notice of termination from the IRS, it may
appeal the determination within 30 days of the date of the notice of termination by sending a written
[*134] notice to the address specified in section 12.06 of this Agreement. If QI appeals the notice
of termination, this Agreement shall not terminate until the appeal has been decided. If an event of
default is discovered in the course of an external audit, the QI may cure the default, without
following the procedures of this section 11.05, if the external auditor's report describes the default
and the actions that QI took to cure the default and the IRS determines that the cure procedures
followed by QI were sufficient. If the IRS determines that QI's actions to cure the default were not
sufficient, the IRS shall issue a notice of default and the procedures described in this section 11.05
shall be followed.
Sec. 11.06. Renewal. If QI intends to renew this Agreement, it shall submit an application for
renewal to the IRS no earlier than one year and no later than six months prior to the expiration of
this Agreement. Any such application for renewal must contain an update of the information
provided by QI to the IRS in connection with the application to enter into this Agreement, and any
other information the IRS may request in connection with the renewal process. This Agreement shall
be renewed [*135] only upon the signatures of both QI and the IRS. Either the IRS or QI may
seek to negotiate a new qualified intermediary agreement rather than renew this Agreement.
SECTION 12. MISCELLANEOUS PROVISIONS
Sec. 12.01. QI's application to become a qualified intermediary and all the Appendices and
Attachments to this Agreement are hereby incorporated into and made an integral part of this
Agreement. This Agreement, QI's application, and the Appendices and Attachments to this
Agreement constitute the complete agreement between the parties.
Sec. 12.02. This Agreement may be amended by the IRS if the IRS determines that such
amendment is needed for the sound administration of the internal revenue laws or internal revenue
regulations. The agreement may also be modified by either QI or the IRS upon mutual agreement.
Such amendments or modifications shall be in writing.
Sec. 12.03. Any waiver of a provision of this Agreement is a waiver solely of that provision. The
waiver does not obligate the IRS to waive other provisions of this Agreement or the same provision
at a later date.
Sec. 12.04. This Agreement shall be governed by the laws of the United States. Any legal action
brought under this Agreement [*136] shall be brought only in a United States court with
jurisdiction to hear and resolve matters under the internal revenue laws of the United States. For
this purpose, QI agrees to submit to the jurisdiction of such United States court.

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Sec. 12.05. QI's rights and responsibilities under this Agreement cannot be assigned to another
person.
Sec. 12.06. Notices provided under this Agreement shall be mailed registered, first class airmail.
Notice shall be directed as follows:To the IRS
Assistant Commissioner (International)
Foreign Payments Division
OP:IN:I:FP
950 L'Enfant Plaza South, SW
Washington , DC 20024
All notices sent to the IRS must include the QI's QI-EIN.
To QI:

Sec. 12.07. QI, acting in its capacity as a qualified intermediary or in any other capacity, does not
act as an agent of the IRS, nor does it have the authority to hold itself out as an agent of the IRS.
IN WITNESS WHEREOF, the above parties have subscribed their names to these presents,
in duplicate.
Signed this day of
(name and title of person signing for QI)
(name and title of person signing for IRS)
ATTACHMENTS:
Appendix A
[Name of QI]
[Name of country] (see Attachment 1, for description of know-your customer rules).
[Name of country] (see Attachment [*137] 2, for description of know-your customer rules).
[Name of entity affiliated with QI]
[Name of country] (see Attachment, for description of know-your customer rules).
[Name of country] (see Attachment, for description of know-your customer rules).
Appendix B

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QI and the IRS agree that any of the following auditors may be used by QI, or any PAI with which
QI has an agreement, to perform the external audits required by section 10 of this Agreement.
[Names, addresses, telephone, and fax numbers of external auditors]
ATTACHMENT
1. QI is subject to the following laws and regulations of [name of country] governing the
requirements of QI to obtain documentation confirming the identity of QI's account holders.
2. QI represents that [name and citations to laws and regulations identified in item 1, above] are
enforced by [name of enforcement body] and QI shall provide the IRS with an English translation of
any reports or other documentation issued by [name of enforcement body] that relates to QI's
failure to comply with [laws and regulations identified in 1, above].
3. QI represents that the following penalties apply for failure to obtain, maintain, and evaluate
documentation obtained under [name and citations [*138] to laws and regulations identified in
item 1].
4. QI shall use the following specific documentary evidence to comply with section 5 of this
Agreement:

a. For natural persons:
b. For legal persons:

5. QI shall follow the procedures set forth below to confirm the identity of account holders that do
not open accounts in person.
SECTION 5. EFFECTIVE DATE
This revenue procedure is effective on January 24, 2000. The IRS may conclude agreements under
this revenue procedure at any time after that date, but such agreements will not have effect before
the date specified in the agreement.
SECTION-6. EFFECT ON OTHER REVENUE PROCEDURES
This revenue procedure supersedes Rev. Proc. 98-27, 1998-15 I.R.B. 30. In addition, Notice 99-8,
1999-5 I.R.B. 26 is obsoleted.
SECTION 7. FURTHER INFORMATION
For further information regarding this revenue procedure, telephone the Office of Assistant
Commissioner (International) at (202) 874-1800 (not a toll-free number).
FOOTNOTES:

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n1 All citations to income tax regulations in this revenue procedure are to the regulations as
amended by T.D. 8734 (62 FR 53387), T.D. 8804 (63 FR 72183), and T.D. 8856 (64 FR 73408).All
citations to income tax regulations in this revenue procedure are to the regulations as amended by
T.D. 8734 (62 FR 53387), T.D. 8804 (63 FR 72183), and T.D. 8856 (64 FR 73408).

n1

n2 n2 Generally, the IRS will not permit a QI to establish the identity of an account holder without
obtaining documentation directly from the account holder.

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