TaxTMI 
TaxTMI 
Agreement between the Government of the Republic of India and the Government of the United States of America for the Exchange of Information with respect to taxes
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....wers conferred by section 90 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies that all the provisions of the said Agreement between the Government of the Republic of India and the Government of the United States of America for the exchange of information with respect to taxes, as set out in the said Agreement, shall be given effect to in the Union of India with effect from the 31^st August, 2015, that is, the date of entry into force of the said Agreement. [Notification No. 77/2015 /F. No. 500/137/2011-FTD-I] AKHILESH RANJAN, Jt. Secy. Agreement between the Government of the Republic of India and the Government of the United States of America to Improve International Tax Compliance and to Implement FATCA Whereas, the Government of the Republic of India and the Government of the United States of America (each, a "Party," and together, the "Parties") desire to conclude an agreement to improve international tax compliance through mutual assistance in tax matters based on an effective infrastructure for the automatic exchange of information; Whereas, Article 28 of the Convention between the Government of the Republic of India and the Gover....
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....erica, including the States thereof, and, when used in a geographical sense, means the territory of the United States of America, including inland waters, the air space, the territorial sea thereof and any maritime area beyond the territorial sea within which the United States may exercise sovereign rights or jurisdiction in accordance with international law; the term, however, does not include the U.S. Territories. Any reference to a "State" of the United States includes the District of Columbia. b) The term "U.S. Territory" means American Samoa, the Commonwealth of the Northern Mariana Islands, Guam, the Commonwealth of Puerto Rico, or the U.S. Virgin Islands. c) The term "IRS" means the U.S. Internal Revenue Service. d) The term "India" means the Republic of India, and when used in a geographical sense, means the territory of India and includes the territorial sea and airspace above it, as well as any other maritime zone in which India has sovereign rights, other rights and jurisdiction, according to the Indian law and in accordance with international law, including the U.N. Convention on the Law of the Sea. e) The term "Partner Jurisdiction" ....
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.... the holding company of an insurance company) that issues, or is obligated to make payments with respect to, a Cash Value Insurance Contract or an Annuity Contract. l) The term "Indian Financial Institution" means (i) any Financial Institution resident in India, but excluding any branch of such Financial Institution that is located outside India, and (ii) any branch of a Financial Institution not resident in India, if such branch is located in India. m) The term "Partner Jurisdiction Financial Institution" means (i) any Financial Institution established in a Partner Jurisdiction, but excluding any branch of such Financial Institution that is located outside the Partner Jurisdiction, and (ii) any branch of a Financial Institution not established in the Partner Jurisdiction, if such branch is located in the Partner Jurisdiction. n) The term "Reporting Financial Institution" means a Reporting Indian Financial Institution or a Reporting U.S. Financial Institution, as the context requires. o) The term "Reporting Indian Financial Institution" means any Indian Financial Institution that is not a Non-Reporting Indian Financial Institution. p) Th....
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....Cash Value Insurance Contract and any Annuity Contract issued or maintained by a Financial Institution, other than a noninvestment-linked, nontransferable immediate life annuity that is issued to an individual and monetizes a pension or disability benefit provided under an account that is excluded from the definition of Financial Account in Annex II. Notwithstanding the foregoing, the term "Financial Account" does not include any account that is excluded from the definition of Financial Account in Annex II. For purposes of this Agreement, interests are "regularly traded" if there is a meaningful volume of trading with respect to the interests on an ongoing basis, and an "established securities market" means an exchange that is officially recognized and supervised by a governmental authority in which the market is located and that has a meaningful annual value of shares traded on the exchange. For purposes of this subparagraph 1(s), an interest in a Financial Institution is not "regularly traded" and shall be treated as a Financial Account if the holder of the interest (other than a Financial Institution acting as an intermediary) is registered on the books of such Financia....
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.... mortality, morbidity, accident, liability, or property risk. x) The term "Annuity Contract" means a contract under which the issuer agrees to make payments for a period of time determined in whole or in part by reference to the life expectancy of one or more individuals. The term also includes a contract that is considered to be an Annuity Contract in accordance with the law, regulation, or practice of the jurisdiction in which the contract was issued, and under which the issuer agrees to make payments for a term of years. y) The term "Cash Value Insurance Contract" means an Insurance Contract (other than an indemnity reinsurance contract between two insurance companies) that has a Cash Value greater than $50,000. z) The term "Cash Value" means the greater of (i) the amount that the policyholder is entitled to receive upon surrender or termination of the contract (determined without reduction for any surrender charge or policy loan), and (ii) the amount the policyholder can borrow under or with regard to the contract. Notwithstanding the foregoing, the term "Cash Value" does not include an amount payable under an Insurance Contract as: (1) a per....
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.... other person is treated as holding the account. For purposes of the immediately preceding sentence, the term "Financial Institution" does not include a Financial Institution organized or incorporated in a U.S. Territory. In the case of a Cash Value Insurance Contract or an Annuity Contract, the Account Holder is any person entitled to access the Cash Value or change the beneficiary of the contract. If no person can access the Cash Value or change the beneficiary, the Account Holder is any person named as the owner in the contract and any person with a vested entitlement to payment under the terms of the contract. Upon the maturity of a Cash Value Insurance Contract or an Annuity Contract, each person entitled to receive a payment under the contract is treated as an Account Holder. ee) The term "U.S. Person" means a U.S. citizen or resident individual, a partnership or corporation organized in the United States or under the laws of the United States or any State thereof, a trust if (i) a court within the United States would have authority under applicable law to render orders or judgments concerning substantially all issues regarding administration of the trust, and (ii) o....
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.... ii) The term "U.S. Source Withholdable Payment" means any payment of interest (including any original issue discount), dividends, rents, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, and other fixed or determinable annual or periodical gains, profits, and income, if such payment is from sources within the United States. Notwithstanding the foregoing, a U.S. Source Withholdable Payment does not include any payment that is not treated as a withholdable payment in relevant U.S. Treasury Regulations. jj) An Entity is a "Related Entity" of another Entity if either Entity controls the other Entity, or the two Entities are under common control. For this purpose control includes direct or indirect ownership of more than 50 percent of the vote or value in an Entity. Notwithstanding the foregoing, India may treat an Entity as not a Related Entity of another Entity if the two Entities are not members of the same expanded affiliated group as defined in section 1471(e)(2) of the U.S. Internal Revenue Code. kk) The term "U.S. TIN" means a U.S. federal taxpayer identifying number. ll) The term "Indian TIN" means an Indian taxpayer ....
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.... relevant calendar year or other appropriate reporting period or, if the account was closed during such year, immediately before closure; (5) in the case of any Custodial Account: (A) the total gross amount of interest, the total gross amount of dividends, and the total gross amount of other income generated with respect to the assets held in the account, in each case paid or credited to the account (or with respect to the account) during the calendar year or other appropriate reporting period; and (B) the total gross proceeds from the sale or redemption of property paid or credited to the account during the calendar year or other appropriate reporting period with respect to which the Reporting Indian Financial Institution acted as a custodian, broker, nominee, or otherwise as an agent for the Account Holder; (6) in the case of any Depository Account, the total gross amount of interest paid or credited to the account during the calendar year or other appropriate reporting period; and (7) in the case of any account not described in subparagraph 2(a)(5) or 2(a)(6) of this Article, the total gross amount paid or credited to the Account Hold....
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....reement, except for gross proceeds described in subparagraph 2(a)(5)(B) of Article 2 of this Agreement; and (3) the information to be obtained and exchanged with respect to 2016 and subsequent years is the information described in subparagraphs 2(a)(1) through 2(a)(7) of Article 2 of this Agreement; b) In the case of the United States, the information to be obtained and exchanged with respect to 2014 and subsequent years is all of the information identified in subparagraph 2(b) of Article 2 of this Agreement. 4. Notwithstanding paragraph 3 of this Article, with respect to each Reportable Account that is maintained by a Reporting Financial Institution as of June 30, 2014, and subject to paragraph 4 of Article 6 of this Agreement, the Parties are not required to obtain and include in the exchanged information the Indian TIN or the U.S. TIN, as applicable, of any relevant person if such taxpayer identifying number is not in the records of the Reporting Financial Institution. In such a case, the Parties shall obtain and include in the exchanged information the date of birth of the relevant person, if the Reporting Financial Institution has such date of birth in its....
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....NSTITUTIONS 1. Treatment of Reporting Indian Financial Institutions. Each Reporting Indian Financial Institution shall be treated as complying with, and not subject to withholding under, section 1471 of the U.S. Internal Revenue Code if India complies with its obligations under Articles 2 and 3 of this Agreement with respect to such Reporting Indian Financial Institution, and the Reporting Indian Financial Institution: a) identifies U.S. Reportable Accounts and reports annually to the Indian Competent Authority the information required to be reported in subparagraph 2(a) of Article 2 of this Agreement in the time and manner described in Article 3 of this Agreement; b) for each of 2015 and 2016, reports annually to the Indian Competent Authority the name of each Nonparticipating Financial Institution to which it has made payments and the aggregate amount of such payments; c) complies with the applicable registration requirements on the IRS FATCA registration website; d) to the extent that a Reporting Indian Financial Institution is (i) acting as a qualified intermediary (for purposes of section 1441 of the U.S. Internal Revenue Code) that has e....
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....r located in, and regulated by, India, or a predetermined contractual or legal arrangement, operated to provide pension or retirement benefits or earn income for providing such benefits under the laws of India and regulated with respect to contributions, distributions, reporting, sponsorship, and taxation. 4. Identification and Treatment of Other Deemed-Compliant FFIs and Exempt Beneficial Owners. The United States shall treat each Non-Reporting Indian Financial Institution as a deemed-compliant FFI or as an exempt beneficial owner, as appropriate, for purposes of section 1471 of the U.S. Internal Revenue Code. 5. Special Rules Regarding Related Entities and Branches That Are Nonparticipating Financial Institutions. If an Indian Financial Institution, that otherwise meets the requirements described in paragraph 1 of this Article or is described in paragraph 3 or 4 of this Article, has a Related Entity or branch that operates in a jurisdiction that prevents such Related Entity or branch from fulfilling the requirements of a participating FFI or deemed-compliant FFI for purposes of section 1471 of the U.S. Internal Revenue Code or has a Related Entity or branch that is treated ....
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.... year that is prior to the first calendar year with respect to which India is required to obtain and exchange information; and d) the United States shall not be obligated to begin exchanging information prior to the date by which India is required to begin exchanging information. 7. Coordination of Definitions with U.S. Treasury Regulations. Notwithstanding Article 1 of this Agreement and the definitions provided in the Annexes to this Agreement, in implementing this Agreement, India may use, and may permit Indian Financial Institutions to use, a definition in relevant U.S. Treasury Regulations in lieu of a corresponding definition in this Agreement, provided that such application would not frustrate the purposes of this Agreement. ARTICLE 5 COLLABORATION ON COMPLIANCE AND ENFORCEMENT 1. Minor and Administrative Errors. A Competent Authority shall notify the Competent Authority of the other Party when the first-mentioned Competent Authority has reason to believe that administrative errors or other minor errors may have led to incorrect or incomplete information reporting or resulted in other infringements of this Agreement. The Competent Authority of such other....
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....e approach to achieve the policy objectives of foreign passthru payment and gross proceeds withholding that minimizes burden. 3. Development of Common Reporting and Exchange Model. The Parties are committed to working with Partner Jurisdictions and the Organisation for Economic Co-operation and Development on adapting the terms of this Agreement and other agreements between the United States and Partner Jurisdictions to a common model for automatic exchange of information, including the development of reporting and due diligence standards for financial institutions. 4. Documentation of Accounts Maintained as of June 30, 2014. With respect to Reportable Accounts maintained by a Reporting Financial Institution as of June 30, 2014: a) The United States commits to establish, by January 1, 2017, for reporting with respect to 2017 and subsequent years, rules requiring Reporting U.S. Financial Institutions to obtain and report the Indian TIN of each Account Holder of an Indian Reportable Account as required pursuant to subparagraph 2(b)(1) of Article 2 of this Agreement; and b) India commits to establish, by January 1, 2017, for reporting with respect to 2017 and s....
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....rth in Article 6 of this Agreement. In witness whereof, the undersigned, being duly authorized thereto by their respective Governments, have signed this Agreement. Done at the Government of the Republic of India Ministry of Finance, North Block, New Delhi, India, in duplicate, this 9th day of July, 2015, in the Hindi and English languages, both texts being equally authentic. In case of divergence between the two texts, the English text shall be the operative one. FOR THE GOVERNMENT OF THE REPUBLIC OF INDIA : Shaktikanta Das Revenue Secretary FOR THE GOVERNMENT OF THE UNITED STATES OF AMERICA : Richard R Verma Ambassador ANNEX I DUE DILIGENCE OBLIGATIONS FOR IDENTIFYING AND REPORTING ON U.S. REPORTABLE ACCOUNTS AND ON PAYMENTS TO CERTAIN NONPARTICIPATING FINANCIAL INSTITUTIONS I. General. A. India shall require that Reporting Indian Financial Institutions apply the due diligence procedures contained in this Annex I to identify U.S. Reportable Accounts and accounts held by Nonparticipating Financial Institutions. B. For purposes of the Agreement, 1. All dollar amounts are in U.S. dollars and shall be read to include the equi....
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....tively prevent the sale of such a Cash Value Insurance Contract or an Annuity Contract to U.S. residents (e.g., if the relevant Financial Institution does not have the required registration under U.S. law, and the law of India requires reporting or withholding with respect to insurance products held by residents of India). 4. A Depository Account with a balance of $50,000 or less. B. Review Procedures for Preexisting Individual Accounts With a Balance or Value as of 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"). 1. Electronic Record Search. The Reporting Indian Financial Institution must review electronically searchable data maintained by the Reporting Indian Financial Institution for any of the following U.S. indicia: a) Identification of the Account Holder as a U.S. citizen or resident; b) Unambiguous indication of a U.S. place of birth; c) Current U.S. mailing or residence address (including a U.S. post office box); d) Current U.S. telephone number; e) Standing instructions to transfer funds to a....
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....n the Account Holder did not obtain U.S. citizenship at birth. b) Where the Account Holder information contains a current U.S. mailing or residence address, or one or more U.S. telephone numbers that are the only telephone numbers associated with the account, the Reporting Indian Financial Institution obtains, or has previously reviewed and maintains a record of: (1) A self-certification that the Account Holder is neither a U.S. citizen nor a U.S. resident for tax purposes (which may be on an IRS Form W-8 or other similar agreed form); and (2) Documentary evidence, as defined in paragraph D of section VI of this Annex I, establishing the Account Holder's non-U.S. status. c) Where the Account Holder information contains standing instructions to transfer funds to an account maintained in the United States, the Reporting Indian Financial Institution obtains, or has previously reviewed and maintains a record of: (1) A self-certification that the Account Holder is neither a U.S. citizen nor a U.S. resident for tax purposes (which may be on an IRS Form W-8 or other similar agreed form); and (2) Documentary evidence, as defined in para....
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.... If the Reporting Indian Financial Institution's electronically searchable databases include fields for, and capture all of the information described in, subparagraph D(3) of this section, then no further paper record search is required. If the electronic databases do not capture all of this information, then with respect to a High Value Account, the Reporting Indian Financial Institution must also review the current customer master file and, to the extent not contained in the current customer master file, the following documents associated with the account and obtained by the Reporting Indian Financial Institution within the last five years for any of the U.S. indicia described in subparagraph B(1) of this section: a) The most recent documentary evidence collected with respect to the account; b) The most recent account opening contract or documentation; c) The most recent documentation obtained by the Reporting Indian Financial Institution pursuant to AML/KYC Procedures or for other regulatory purposes; d) Any power of attorney or signature authority forms currently in effect; and e) Any standing instructions to transfer funds currently....
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....less it elects to apply subparagraph B(4) of this section and one of the exceptions in such subparagraph applies with respect to that account. c) Except for Depository Accounts described in subparagraph A(4) of this section, any Preexisting Individual Account that has been identified as a U.S. Reportable Account under this section shall be treated as a U.S. Reportable Account in all subsequent years, unless the Account Holder ceases to be a Specified U.S. Person. E. Additional Procedures Applicable to High Value Accounts. 1. If a Preexisting Individual Account is a High Value Account as of June 30, 2014, the Reporting Indian Financial Institution must complete the enhanced review procedures described in paragraph D of this section with respect to such account by June 30, 2015. If based on this review such account is identified as a U.S. Reportable Account on or before December 31, 2014, the Reporting Indian Financial Institution must report the required information about such account with respect to 2014 in the first report on the account and on an annual basis thereafter. In the case of an account identified as a U.S. Reportable Account after December 31....
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....the appropriate documentation from the Account Holder. F. Preexisting Individual Accounts That Have Been Documented for Certain Other Purposes. A Reporting Indian 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"). A. Accounts Not Required to Be Reviewed, Identified, or Reported. Unless the Reporting Indian Financial Institution elects otherwise, either with respect to....
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....or U.S. tax purposes. If the Reporting Indian Financial Institution is unable to obtain a valid self-certification, the Reporting Indian Financial Institution must treat the account as a U.S. Reportable Account. IV. Preexisting Entity Accounts. The following rules and procedures apply for purposes of identifying U.S. Reportable Accounts and accounts held by Nonparticipating Financial Institutions among Preexisting Accounts held by Entities ("Preexisting Entity Accounts"). A. Entity Accounts Not Required to Be Reviewed, Identified or Reported. Unless the Reporting Indian Financial Institution elects otherwise, either with respect to all Preexisting Entity Accounts or, separately, with respect to any clearly identified group of such accounts, where the implementing rules in India provide for such an election, a Preexisting Entity Account with an account balance or value that does not exceed $250,000 as of June 30, 2014, is not required to be reviewed, identified, or reported as a U.S. Reportable Account until the account balance or value exceeds $1,000,000. B. Entity Accounts Subject to Review. A Preexisting Entity Account that has an account balance or value tha....
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....ther a Non-U.S. Entity Is a Financial Institution. a) Review information maintained for regulatory or customer relationship purposes (including information collected pursuant to AML/KYC Procedures) to determine whether the information indicates that the Account Holder is a Financial Institution. b) If the information indicates that the Account Holder is a Financial Institution, or the Reporting Indian Financial Institution verifies the Account Holder's Global Intermediary Identification Number on the published IRS FFI list, then the account is not a U.S. Reportable Account. 3. Determine Whether a Financial Institution Is a Nonparticipating Financial Institution Payments to Which Are Subject to Aggregate Reporting Under Subparagraph 1(b) of Article 4 of the Agreement. a) Subject to subparagraph D(3)(b) of this section, a Reporting Indian Financial Institution may determine that the Account Holder is an Indian Financial Institution or other Partner Jurisdiction Financial Institution if the Reporting Indian Financial Institution reasonably determines that the Account Holder has such status on the basis of the Account Holder's Global Intermediary Ide....
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.... b) For purposes of determining whether the Account Holder is a Passive NFFE, the Reporting Indian 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 Indian Financial Institution may rely on: (1) Information collected and maintained pursuant to AML/KYC Procedures in the case of a Preexisting Entity Account held by one or more NFFEs with an account balance or value that does not exceed $1,000,000; or (2) A self-certification (which may be on an IRS Form W-8 or W-9, or on a similar agreed form) from the Account Holder or such Controlling Person in the case of a Preexisting Entity Account held by one or more NFFEs with an account balance or value that exceeds $1,000,000. d) If any Controlling Person of a Passive NFFE is a U.S. citize....
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....ial Institution; (iii) a participating FFI, a deemed-compliant FFI, or an exempt beneficial owner, as those terms are defined in relevant U.S. Treasury Regulations; or (iv) an Active NFFE or Passive NFFE. 1. Subject to subparagraph B(2) of this section, a Reporting Indian Financial Institution may determine that the Account Holder is an Active NFFE, an Indian Financial Institution, or other Partner Jurisdiction Financial Institution if the Reporting Indian Financial Institution reasonably determines that the Account Holder has such status on the basis of the Account Holder's Global Intermediary Identification Number or other information that is publicly available or in the possession of the Reporting Indian Financial Institution, as applicable. 2. If the Account Holder is an Indian Financial Institution or other Partner Jurisdiction Financial Institution treated by the IRS as a Nonparticipating Financial Institution, then the account is not a U.S. Reportable Account, but payments to the Account Holder must be reported as contemplated in subparagraph 1(b) of Article 4 of the Agreement. 3. In all other cases, a Reporting Indian Financial Institution must ob....
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....Procedures" means the customer due diligence procedures of a Reporting Indian Financial Institution pursuant to the anti-money laundering or similar requirements of India to which such Reporting Indian Financial Institution is subject. 2. NFFE. An "NFFE" means any Non-U.S. Entity that is not an FFI as defined in relevant U.S. Treasury Regulations or is an Entity described in subparagraph B(4)(j) of this section, and also includes any Non-U.S. Entity that is established in India or another Partner Jurisdiction and that is not a Financial Institution. 3. Passive NFFE. A "Passive NFFE" means any NFFE that is not (i) an Active NFFE, or (ii) a withholding foreign partnership or withholding foreign trust pursuant to relevant U.S. Treasury Regulations. 4. Active NFFE. An "Active NFFE" means any NFFE that meets any of the following criteria: a) Less than 50 percent of the NFFE's gross income for the preceding calendar year or other appropriate reporting period is passive income and less than 50 percent of the assets held by the NFFE during the preceding calendar year or other appropriate reporting period are assets that produce or are held for the produc....
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....siness other than that of a Financial Institution; i) The NFFE is an "excepted NFFE" as described in relevant U.S. Treasury Regulations; or j) The NFFE meets all of the following requirements: i. It is established and operated in its jurisdiction of residence exclusively for religious, charitable, scientific, artistic, cultural, athletic, or educational purposes; or it is established and operated in its jurisdiction of residence and it is a professional organization, business league, chamber of commerce, labor organization, agricultural or horticultural organization, civic league or an organization operated exclusively for the promotion of social welfare; ii. It is exempt from income tax in its jurisdiction of residence; iii. It has no shareholders or members who have a proprietary or beneficial interest in its income or assets; iv. The applicable laws of the NFFE's jurisdiction of residence or the NFFE's formation documents do not permit any income or assets of the NFFE to be distributed to, or applied for the benefit of, a private person or non-charitable Entity other than pursuant to the conduct of the NFFE's charitable activ....
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....orting Indian Financial Institution is also required, in the case of any Financial Accounts that a relationship manager knows, or has reason to know, are directly or indirectly owned, controlled, or established (other than in a fiduciary capacity) by the same person, to aggregate all such accounts. 4. Currency Translation Rule. For purposes of determining the balance or value of Financial Accounts denominated in a currency other than the U.S. dollar, a Reporting Indian Financial Institution must convert the U.S. dollar threshold amounts described in this Annex I into such currency using a published spot rate determined as of the last day of the calendar year preceding the year in which the Reporting Indian Financial Institution is determining the balance or value. D. Documentary Evidence. For purposes of this Annex I, acceptable documentary evidence includes any of the following: 1. A certificate of residence issued by an authorized government body (for example, a government or agency thereof, or a municipality) of the jurisdiction in which the payee claims to be a resident. 2. With respect to an individual, any valid identification issued by an ....
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....ay permit Reporting Indian Financial Institutions to rely on due diligence procedures performed by third parties, to the extent provided in relevant U.S. Treasury Regulations. G. Alternative Procedures for New Accounts Opened Prior to Entry Into Force of this Agreement. 1. Applicability. If India has provided a written notice to the United States prior to entry into force of this Agreement that, as of July 1, 2014, India lacked the legal authority to require Reporting Indian Financial Institutions either: (i) to require Account Holders of New Individual Accounts to provide the self-certification specified in section III of this Annex I, or (ii) to perform all the due diligence procedures related to New Entity Accounts specified in section V of this Annex I, then Reporting Indian Financial Institutions may apply the alternative procedures described in subparagraph G(2) of this section, as applicable, to such New Accounts, in lieu of the procedures otherwise required under this Annex I. The alternative procedures described in subparagraph G(2) of this section shall be available only for those New Individual Accounts or New Entity Accounts, as applicable, opened prio....
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....al Institution, as applicable. The information required to be reported with respect to such a New Account is any information that would have been reportable under this Agreement if the New Account had been identified as a U.S. Reportable Account or as an account held by a Nonparticipating Financial Institution, as applicable, as of the date the account was opened. c) By the date that is one year after the date of entry into force of this Agreement, Reporting Indian Financial Institutions must close any New Account described in subparagraph G(1) of this section for which it was unable to collect the required self-certification or other documentation pursuant to the procedures described in subparagraph G(2)(a) of this section. In addition, by the date that is one year after the date of entry into force of this Agreement, Reporting Indian Financial Institutions must: (i) with respect to such closed accounts that prior to such closure were New Individual Accounts (without regard to whether such accounts were High Value Accounts), perform the due diligence procedures specified in paragraph D of section II of this Annex I, or (ii) with respect to such closed accounts that prior ....
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....cs to the Entities and accounts described in this Annex II as of the date of signature of the Agreement; or (2) to remove Entities and accounts that, due to changes in circumstances, no longer present a low risk of being used by U.S. Persons to evade U.S. tax. Any such addition or removal shall be effective on the date of signature of the mutual decision, unless otherwise provided therein. Procedures for reaching such a mutual decision may be included in the mutual agreement or arrangement described in paragraph 6 of Article 3 of the Agreement. I. Exempt Beneficial Owners other than Funds. The following Entities shall be treated as Non-Reporting Indian Financial Institutions and as exempt beneficial owners for purposes of sections 1471 and 1472 of the U.S. Internal Revenue Code, other than with respect to a payment that is derived from an obligation held in connection with a commercial financial activity of a type engaged in by a Specified Insurance Company, Custodial Institution, or Depository Institution. A. Governmental Entity. The government of India, any political subdivision of India (which, for the avoidance of doubt, includes a state, province, county, or ....
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....s; (2) that has in effect a headquarters agreement with India; and (3) the income of which does not inure to the benefit of private persons. C. Central Bank. An institution that is by law or government sanction the principal authority, other than the government of India itself, issuing instruments intended to circulate as currency. Such an institution may include an instrumentality that is separate from the government of India, whether or not owned in whole or in part by India. II. Funds that Qualify as Exempt Beneficial Owners. The following Entities shall be treated as Non-Reporting Indian Financial Institutions and as exempt beneficial owners for purposes of sections 1471 and 1472 of the U.S. Internal Revenue Code. A. Treaty-Qualified Retirement Fund. A fund established in India, provided that the fund is entitled to benefits under an income tax treaty between India and the United States on income that it derives from sources within the United States (or would be entitled to such benefits if it derived any such income) as a resident of India that satisfies any applicable limitation on benefits requirement, and is operated principally to administer or p....
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.... 3. The employee and employer contributions to the fund (other than transfers of assets from treaty-qualified retirement funds described in paragraph A of this section or retirement and pension accounts described in subparagraph A(1) of section V of this Annex II) are limited by reference to earned income and compensation of the employee, respectively; 4. Participants that are not residents of India are not entitled to more than 20 percent of the fund's assets; and 5. The fund is subject to government regulation and provides annual information reporting about its beneficiaries to the relevant tax authorities in India. D. Pension Fund of an Exempt Beneficial Owner. A fund established in India by an exempt beneficial owner to provide retirement, disability, or death benefits to beneficiaries or participants that are current or former employees of the exempt beneficial owner (or persons designated by such employees), or that are not current or former employees, if the benefits provided to such beneficiaries or participants are in consideration of personal services performed for the exempt beneficial owner. E. Investment Entity Wholly Owned by Exemp....
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.... Indian Financial Institutions that shall be treated as deemed-compliant FFIs for purposes of section 1471 of the U.S. Internal Revenue Code. A. Financial Institution with a Local Client Base. A Financial Institution satisfying the following requirements: 1. The Financial Institution must be licensed and regulated as a financial institution under the laws of India; 2. The Financial Institution must have no fixed place of business outside of India. For this purpose, a fixed place of business does not include a location that is not advertised to the public and from which the Financial Institution performs solely administrative support functions; 3. The Financial Institution must not solicit customers or Account Holders outside India. For this purpose, a Financial Institution shall not be considered to have solicited customers or Account Holders outside India merely because the Financial Institution (a) operates a website, provided that the website does not specifically indicate that the Financial Institution provides Financial Accounts or services to nonresidents, and does not otherwise target or solicit U.S. customers or Account Holders, or (b) ad....
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....o Preexisting Accounts to identify any U.S. Reportable Account or Financial Account held by a Nonparticipating Financial Institution, and must report such Financial Account as would be required if the Financial Institution were a Reporting Indian Financial Institution (including by following the applicable registration requirements on the IRS FATCA registration website) or close such Financial Account; 9. Each Related Entity of the Financial Institution that is a Financial Institution must be incorporated or organized in India and, with the exception of any Related Entity that is a retirement fund described in paragraphs A through D of section II of this Annex II, satisfy the requirements set forth in this paragraph A; and 10. The Financial Institution must not have policies or practices that discriminate against opening or maintaining Financial Accounts for individuals who are Specified U.S. Persons and residents of India. B. Local Bank. A Financial Institution satisfying the following requirements: 1. The Financial Institution operates solely as (and is licensed and regulated under the laws of India as) (a) a bank or (b) a credit union or simil....
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....s deposits only when a customer makes a payment in excess of a balance due with respect to the card and the overpayment is not immediately returned to the customer; and 2. Beginning on or before July 1, 2014, the Financial Institution implements policies and procedures to either prevent a customer deposit in excess of $50,000, or to ensure that any customer deposit in excess of $50,000, in each case applying the rules set forth in Annex I for account aggregation and currency translation, is refunded to the customer within 60 days. For this purpose, a customer deposit does not refer to credit balances to the extent of disputed charges but does include credit balances resulting from merchandise returns. IV. Investment Entities that Qualify as Deemed-Compliant FFIs and Other Special Rules. The Financial Institutions described in paragraphs A through E of this section are Non-Reporting Indian Financial Institutions that shall be treated as deemed-compliant FFIs for purposes of section 1471 of the U.S. Internal Revenue Code. In addition, paragraph F of this section provides special rules applicable to an Investment Entity. A. Trustee-Documented Trust. A trust ....
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....entity with the IRS on the IRS FATCA registration website; c) If the sponsoring entity identifies any U.S. Reportable Accounts with respect to the Financial Institution, the sponsoring entity registers the Financial Institution pursuant to applicable registration requirements on the IRS FATCA registration website on or before the later of December 31, 2015 and the date that is 90 days after such a U.S. Reportable Account is first identified; d) The sponsoring entity agrees to perform, on behalf of the Financial Institution, all due diligence, withholding, reporting, and other requirements that the Financial Institution would have been required to perform if it were a Reporting Indian Financial Institution; e) The sponsoring entity identifies the Financial Institution and includes the identifying number of the Financial Institution (obtained by following applicable registration requirements on the IRS FATCA registration website) in all reporting completed on the Financial Institution's behalf; and f) The sponsoring entity has not had its status as a sponsor revoked. C. Sponsored, Closely Held Investment Vehicle. An Indian Financial Instit....
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....ages portfolios for, and acts on behalf of, or (3) executes trades on behalf of a customer for the purposes of investing, managing, or administering funds or securities deposited in the name of the customer with a Financial Institution other than a Nonparticipating Financial Institution. E. Collective Investment Vehicle. An Investment Entity established in India that is regulated as a collective investment vehicle, provided that all of the interests in the collective investment vehicle (including debt interests in excess of $50,000) are held by or through one or more exempt beneficial owners, Active NFFEs described in subparagraph B(4) of section VI of Annex I, U.S. Persons that are not Specified U.S. Persons, or Financial Institutions that are not Nonparticipating Financial Institutions. F. Special Rules. The following rules apply to an Investment Entity: 1. With respect to interests in an Investment Entity that is a collective investment vehicle described in paragraph E of this section, the reporting obligations of any Investment Entity (other than a Financial Institution through which interests in the collective investment vehicle are held) shall be de....
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....al information reporting is required to the tax authorities in India with respect to the account; d) Withdrawals are conditioned on reaching a specified retirement age, disability, or death, or penalties apply to withdrawals made before such specified events; and e) Either (i) annual contributions are limited to $50,000 or less, or (ii) there is a maximum lifetime contribution limit to the account of $1,000,000 or less, in each case applying the rules set forth in Annex I for account aggregation and currency translation. 2. Non-Retirement Savings Accounts. a) An account maintained in India (other than an insurance or Annuity Contract) that satisfies the following requirements under the laws of India. i. The account is subject to regulation as a savings vehicle for purposes other than for retirement; ii. The account is tax-favored (i.e., contributions to the account that would otherwise be subject to tax under the laws of India are deductible or excluded from the gross income of the account holder or taxed at a reduced rate, or taxation of investment income from the account is deferred or taxed at a reduced rate); iii. W....
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....exchange, or lease of the property; b) The account is established and used solely to secure the obligation of the purchaser to pay the purchase price for the property, the seller to pay any contingent liability, or the lessor or lessee to pay for any damages relating to the leased property as agreed under the lease; c) The assets of the account, including the income earned thereon, will be paid or otherwise distributed for the benefit of the purchaser, seller, lessor, or lessee (including to satisfy such person's obligation) when the property is sold, exchanged, or surrendered, or the lease terminates; d) The account is not a margin or similar account established in connection with a sale or exchange of a financial asset; and e) The account is not associated with a credit card account. 3. An obligation of a Financial Institution servicing a loan secured by real property to set aside a portion of a payment solely to facilitate the payment of taxes or insurance related to the real property at a later time. 4. An obligation of a Financial Institution solely to facilitate the payment of taxes at a later time. E. Partner Jur....
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....of information between such non-U.S. government or agency thereof and the IRS. MEMORANDUM OF UNDERSTANDING REGARDING THE AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF INDIA AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA TO IMPROVE INTERNATIONAL TAX COMPLIANCE AND TO IMPLEMENT FATCA At the signing today of the Agreement Between the Government of the Republic of India and the Government of the United States of America to Improve International Tax Compliance and to Implement FATCA (hereinafter the "Agreement"), the representatives of the Republic of India and the United States of America wish to confirm their understanding of the following: In reference to paragraph 1 of Article 10 (Term of Agreement), the Government of the United States of America understands that the Government of the Republic of India plans to propose implementing legislation and formulation of relevant regulations in 2015 with the goal of having the Agreement enter into force by September 30, 2015. Based on this understanding, as of the date of signature of the Agreement, the United States Department of the Treasury intends to continue to treat each Indian Financial Institution, as that term is ....