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I General

• A This Annex may be modified by a mutual written decision entered into between the Competent Authorities of Canada and the United States:

  • 1 To include additional Entities, accounts, and products that present a low risk of being used by U.S. Persons to evade U.S. tax and that have similar characteristics to the Entities, accounts, and products identified in this Annex as of the date of signature of the Agreement; or

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• B Procedures for reaching a mutual decision described in paragraph A of this section may be included in the mutual agreement or arrangement described in paragraph 6 of Article 3 of the Agreement.

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III Deemed-Compliant Financial Institutions

The following Financial Institutions are Non-Reporting Canadian Financial Institutions that shall be treated as deemed-compliant FFIs for the purposes of section 1471 of the U.S. Internal Revenue Code:

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• D Sponsored Investment Entity and Controlled Foreign Corporation

  A Financial Institution described in subparagraph D(1) or D(2) of this section having a sponsoring entity that complies with the requirements of subparagraph D(3) of this section.

  • 1 A Financial Institution is a sponsored investment entity if:

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    • b) An Entity has agreed with the Financial Institution to act as a sponsoring entity for the Financial Institution.

  • 2 A Financial Institution is a sponsored controlled foreign corporation if:

    • a) The Financial Institution is a controlled foreign corporationFootnote ¹ organized under the laws of Canada that is not a qualified intermediary, withholding foreign partnership, or withholding foreign trust pursuant to relevant U.S. Treasury Regulations;

      • Return to footnote ¹A controlled foreign corporation means any foreign (i.e., non-U.S.) corporation if more than 50 percent of the total combined voting power of all classes of stock of such corporation entitled to vote, or the total value of the stock of such corporation, is owned, or is considered as owned, by “United States shareholders” on any day during the taxable year of such foreign corporation. The term a United States shareholder means, with respect to any foreign corporation, a United States person who owns, or is considered as owning, 10 percent or more of the total combined voting power of all classes of stock entitled to vote of such foreign corporation.

  • 3 The sponsoring entity complies with the following requirements:

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    • d) The sponsoring entity agrees to perform, on behalf of the Financial Institution, all due diligence, reporting, and other requirements (including providing to any immediate payor the information described in subparagraph 1(e) of Article 4 of the Agreement), that the Financial Institution would have been required to perform if it were a Reporting Canadian Financial Institution;

• E Sponsored, Closely Held Investment Vehicle

  A Canadian Financial Institution satisfying the following requirements:

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  • 5 The sponsoring entity complies with the following requirements:

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    • b) The sponsoring entity agrees to perform, on behalf of the Financial Institution, all due diligence, reporting, and other requirements (including providing to any immediate payor the information described in subparagraph 1(e) of Article 4 of the Agreement), that the Financial Institution would have been required to perform if it were a Reporting Canadian Financial Institution and retains documentation collected with respect to the Financial Institution for a period of six years;

• F Restricted Fund

  A Financial Institution that qualifies as a restricted fund as described in relevant U.S. Treasury Regulations, applying the procedures set forth in, or required under, Annex I in lieu of the procedures set forth in, or required under, Treasury Regulation section 1.1471-4, and applying references to “report” or “reports” in lieu of references in relevant paragraphs in those regulations to “withhold and report” or “withholds and reports”, provided that the Financial Institution provides to any immediate payor the information described in subparagraph 1(e) of Article 4 of the Agreement, or fulfills the requirements described in subparagraph 1(d) of Article 4 of the Agreement, as applicable.

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• K Special Rules

  The following rules apply to an Investment Entity:

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  • 3 With respect to interests in an Investment Entity established in Canada that is not described in paragraph J or subparagraph K(2) of this section, consistent with paragraph 3 of Article 5 of the Agreement, the reporting obligations of all other Investment Entities with respect to such interests shall be deemed fulfilled if the information required to be reported by the first-mentioned Investment Entity pursuant to the Agreement with respect to such interests is reported by such Investment Entity or another person.

IV Accounts Excluded from Financial Accounts

The following accounts and products established in Canada and maintained by a Canadian Financial Institution shall be treated as excluded from the definition of Financial Accounts, and therefore shall not be treated as U.S. Reportable Accounts under the Agreement:

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• K Escrow Accounts. An account maintained in Canada established in connection with any of the following:

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  • 2 A sale, exchange, or lease of real or immovable property or of personal or movable property, provided that the account satisfies the following requirements:

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    • b) The account is established and used solely to secure the obligation of the purchaser to pay the purchase price for the property, the seller to pay any contingent liability, or the lessor or lessee to pay for any damages relating to the leased property as agreed under the lease;

• L An account maintained in Canada and excluded from the definition of Financial Account under an agreement between the United States and another Partner Jurisdiction to facilitate the implementation of FATCA, provided that such account is subject to the same requirements and oversight under the laws of such other Partner Jurisdiction as if such account were established in that Partner Jurisdiction and maintained by a Partner Jurisdiction Financial Institution in that Partner Jurisdiction.

I General

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• B For purposes of the Agreement,

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II Preexisting Individual Accounts

The following rules and procedures apply for purposes of identifying U.S. Reportable Accounts among Preexisting Accounts held by individuals (“Preexisting Individual Accounts”).

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• B Review Procedures for Preexisting Individual Accounts with a Balance or Value as of June 30, 2014, that Exceeds $50,000  ($250,000 for a Cash Value Insurance Contract or Annuity Contract), but Does Not Exceed $1,000,000 (“Lower Value Accounts”)

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  • 4 Notwithstanding a finding of U.S. indicia under subparagraph B(1) of this section, a Reporting Canadian Financial Institution is not required to treat an account as a U.S. Reportable Account if:

    • a) Where the Account Holder information unambiguously indicates a U.S. place of birth, the Reporting Canadian Financial Institution obtains, or has previously reviewed and maintains a record of:

      • (1) A self-certification that the Account Holder is neither a U.S. citizen nor a U.S. resident for tax purposes (which may be on an IRS Form W-8 or other similar agreed form);

    • b) Where the Account Holder information contains a current U.S. mailing or residence address, or one or more U.S. telephone numbers that are the only telephone numbers associated with the account, the Reporting Canadian Financial Institution obtains, or has previously reviewed and maintains a record of:

      • (1) A self-certification that the Account Holder is neither a U.S. citizen nor a U.S. resident for tax purposes (which may be on an IRS Form W-8 or other similar agreed form); and

    • c) Where the Account Holder information contains standing instructions to transfer funds to an account maintained in the United States, the Reporting Canadian Financial Institution obtains, or has previously reviewed and maintains a record of:

      • (1) A self-certification that the Account Holder is neither a U.S. citizen nor a U.S. resident for tax purposes (which may be on an IRS Form W-8 or other similar agreed form); and

    • d) Where the Account Holder information contains a currently effective power of attorney or signatory authority granted to a person with a U.S. address, has an “in-care-of” address or “hold mail” address that is the sole address identified for the Account Holder, or has one or more U.S. telephone numbers (if a non-U.S. telephone number is also associated with the account), the Reporting Canadian Financial Institution obtains, or has previously reviewed and maintains a record of:

      • (1) A self-certification that the Account Holder is neither a U.S. citizen nor a U.S. resident for tax purposes (which may be on an IRS Form W-8 or other similar agreed form); or

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• F Preexisting Individual Accounts That Have Been Documented for Certain Other Purposes

  A Reporting Canadian Financial Institution that has previously obtained documentation from an Account Holder to establish the Account Holder’s status as neither a U.S. citizen nor a U.S. resident in order to meet its obligations under a qualified intermediary, withholding foreign partnership, or withholding foreign trust agreement with the IRS, or to fulfill its obligations under chapter 61 of Title 26 of the United States Code, is not required to perform the procedures described in subparagraph B(1) of this section with respect to Lower Value Accounts or subparagraphs D(1) through D(3) of this section with respect to High Value Accounts.

III New Individual Accounts

The following rules and procedures apply for purposes of identifying U.S. Reportable Accounts among Financial Accounts held by individuals and opened on or after July 1, 2014 (“New Individual Accounts”).

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• B Other New Individual Accounts

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  • (2) If the self-certification establishes that the Account Holder is resident in the United States for tax purposes, the Reporting Canadian Financial Institution must treat the account as a U.S. Reportable Account and obtain a self-certification that includes the Account Holder’s U.S. TIN (which may be an IRS Form W-9 or other similar agreed form).

IV Preexisting Entity Accounts

The following rules and procedures apply for purposes of identifying U.S. Reportable Accounts and accounts held by Nonparticipating Financial Institutions among Preexisting Accounts held by Entities (“Preexisting Entity Accounts”).

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• C Entity Accounts with Respect to Which Reporting Is Required

  With respect to Preexisting Entity Accounts described in paragraph B of this section, only accounts that are held by one or more Entities that are Specified U.S. Persons, or by Passive NFFEs with one or more Controlling Persons who are U.S. citizens or residents, shall be treated as U.S. Reportable Accounts. In addition, accounts held by Nonparticipating Financial Institutions shall be treated as accounts for which aggregate payments as described in subparagraph 1(b) of Article 4 of the Agreement are reported to the Canadian Competent Authority.

• D Review Procedures for Identifying Entity Accounts with Respect to Which Reporting Is Required

  For Preexisting Entity Accounts described in paragraph B of this section, the Reporting Canadian Financial Institution must apply the following review procedures to determine whether the account is held by one or more Specified U.S. Persons, by Passive NFFEs with one or more Controlling Persons who are U.S. citizens or residents, or by Nonparticipating Financial Institutions:

  • 1 Determine Whether the Entity Is a Specified U.S. Person

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    • b) If the information indicates that the Account Holder is a U.S. Person, the Reporting Canadian Financial Institution must treat the account as a U.S. Reportable Account unless it obtains a self-certification from the Account Holder (which may be on an IRS Form W-8 or W-9, or a similar agreed form), or reasonably determines based on information in its possession or that is publicly available, that the Account Holder is not a Specified U.S. Person.

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  • 3 Determine Whether a Financial Institution Is a Nonparticipating Financial Institution Payments to Which Are Subject to Aggregate Reporting under Subparagraph 1(b) of Article 4 of the Agreement

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    • b) If the Account Holder is a Canadian Financial Institution or other Partner Jurisdiction Financial Institution treated by the IRS as a Nonparticipating Financial Institution, then the account is not a U.S. Reportable Account, but payments to the Account Holder must be reported as contemplated in subparagraph 1(b) of Article 4 of the Agreement.

    • c) If the Account Holder is not a Canadian Financial Institution or other Partner Jurisdiction Financial Institution, then the Reporting Canadian Financial Institution must treat the Account Holder as a Nonparticipating Financial Institution payments to which are reportable under subparagraph 1(b) of Article 4 of the Agreement, unless the Reporting Canadian Financial Institution:

      • (1) Obtains a self-certification (which may be on an IRS Form W-8 or similar agreed form) from the Account Holder that it is a certified deemed-compliant FFI, or an exempt beneficial owner, as those terms are defined in relevant U.S. Treasury Regulations; or

  • 4 Determine Whether an Account Held by an NFFE Is a U.S. Reportable Account

    With respect to an Account Holder of a Preexisting Entity Account that is not identified as either a U.S. Person or a Financial Institution, the Reporting Canadian Financial Institution must identify (i) whether the Account Holder has Controlling Persons, (ii) whether the Account Holder is a Passive NFFE, and (iii) whether any of the Controlling Persons of the Account Holder is a U.S. citizen or resident. In making these determinations the Reporting Canadian Financial Institution must follow the guidance in subparagraphs D(4)(a) through D(4)(d) of this section in the order most appropriate under the circumstances.

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    • b) For purposes of determining whether the Account Holder is a Passive NFFE, the Reporting Canadian Financial Institution must obtain a self-certification (which may be on an IRS Form W-8 or W-9, or on a similar agreed form) from the Account Holder to establish its status, unless it has information in its possession or that is publicly available, based on which it can reasonably determine that the Account Holder is an Active NFFE.

    • c) For purposes of determining whether a Controlling Person of a Passive NFFE is a U.S. citizen or resident for tax purposes, a Reporting Canadian Financial Institution may rely on:

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      • (2) A self-certification (which may be on an IRS Form W-8 or W-9, or on a similar agreed form) from the Account Holder or such Controlling Person in the case of a Preexisting Entity Account held by one or more NFFEs with an account balance or value that exceeds $1,000,000.

V New Entity Accounts

The following rules and procedures apply for purposes of identifying U.S. Reportable Accounts and accounts held by Nonparticipating Financial Institutions among Financial Accounts held by Entities and opened on or after July 1, 2014 (“New Entity Accounts”).

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• D If the Account Holder is a Canadian Financial Institution or other Partner Jurisdiction Financial Institution treated by the IRS as a Nonparticipating Financial Institution, then the account is not a U.S. Reportable Account, but payments to the Account Holder must be reported as contemplated in subparagraph 1(b) of Article 4 of the Agreement.

• E In all other cases, a Reporting Canadian Financial Institution must obtain a self-certification from the Account Holder to establish the Account Holder’s status. Based on the self-certification, the following rules apply:

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  • 4 If the Account Holder is a Nonparticipating Financial Institution (including a Canadian Financial Institution or other Partner Jurisdiction Financial Institution treated by the IRS as a Nonparticipating Financial Institution), then the account is not a U.S. Reportable Account, but payments to the Account Holder must be reported as contemplated in subparagraph 1(b) of Article 4 of the Agreement.

VI Special Rules and Definitions

The following additional rules and definitions apply in implementing the due diligence procedures described above:

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• B Definitions

  The following definitions apply for purposes of this Annex I:

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  • 4 Active NFFE

    An Active NFFE means any NFFE that meets any of the following criteria:

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    • j) The NFFE meets all of the following requirements:

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      • (3) It has no shareholders or members who have a proprietary or beneficial interest in its income or assets;

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• D Documentary Evidence

  For purposes of this Annex I, acceptable documentary evidence includes any of the following:

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  • 4 With respect to a Financial Account maintained in a jurisdiction with anti-money laundering rules that have been approved by the IRS in connection with a QI agreement (as described in relevant U.S. Treasury Regulations), any of the documents, other than a Form W-8 or W-9, referenced in the jurisdiction’s attachment to the QI agreement for identifying individuals or Entities.