Paweł Zegarłowicz January 08, 2016 - PowerPoint Presentation

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Paweł ZegarłowiczJanuary 08, 2016

Poland – new Government, key changes

in the media and officially available analysis

www.citihandlowy.plBank Handlowy w Warszawie S.A.

How to determine customer status when filling out a FATCA certification

www.citihandlowy.pl

Bank Handlowy w Warszawie S.A. Slide2

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Support material for the clients of Bank Handlowy w Warszawie S.A.

This document has been prepared solely for information purposes

and shall not be construed as tax advice within the meaning of US FATCA and the Polish tax legislation.Bank Handlowy w Warszawie S.A. / Dom Maklerski Banku Handlowego shall not be held liable for an entity’s decision about its FATCA status.The tables on the following slides will help you determine the status of your activity for the purpose of FATCA certificationSlide3

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FATCA status determination criteria (1)

Criteria

FATCA status

Partnerships or corporations registered in the United States

The entity is a partnership or a corporation formed/registered in the United States or under the US law

or:

The entity is a trust

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that meets the following criteria (which should be interpreted in accordance with the US Internal Revenue Code):

a court within the United States would have authority under applicable laws to render orders or judgments concerning substantially all issues regarding administration of the trust, and

one or more U.S. persons have the authority to control all substantial decisions of the trust

or concerns the control over an estate of a decedent that was a citizen or resident of the United States.

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Trusts are entities that do not exist in the Polish legal system

If the criteria are met, you have the status of a

U.S. TAX RESIDENT

(U.S. person)

Please fill in Section

1 of the Certification and go directly to Section 4

Financial institutions

The conducted business is financial in nature, in particular:

Accepting deposits (e.g. Credit Union, bank)

Safekeeping financial assets for third parties (e.g. a brokerage house)

The core business is investing in different assets on behalf of/for your clients (e.g. a mutual fund)

Entering into insurance agreements (e.g. an insurance company)

If you meet these criteria, in most of the cases your activity will have the status of a

FINANCIAL INSTITUTION.

However, please make sure this status is correct by checking:

Definitions of subtypes of the financial institution in the dictionary to the Certification, particularly the definition of the

Deemed-Compliant FFI

and

Exceptions

to the definition in the description of the

Exempt Beneficial OwnerSlide4

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FATCA status determination criteria (2)

Criteria

FATCA status

Entities selling goods and non-financial services

Sale of goods or provision of services other than financial services

and

at the same time:

Most (more than 50%) of the gross income from the activity is not passive income and most (more than 50%) of the assets held by the entity produce or are held for production of passive income

(passive income is e.g. dividends, interest, license fees, capital gains)

If you meet these criteria, in most cases your activity will have the status of:

ACTIVE NFFE

(see paragraph 9a of the Certification for a detailed definition)

Listed companies

The shares of your entity or the entity that is your direct/indirect owner (i.e. holds more than 50% stake in your entity) are listed on a reputable stock exchange (primary market in an EU state or a primary market of an equivalent state)

If you meet these criteria, in most cases your activity will have the status of:

ACTIVE NFFE

(see paragraph 9b of the Certification for a detailed definition)

Government or local authorities

If you are a government or a local authority body or an entity whose sole owner is the State Treasury.

If you meet these criteria, in most cases your activity will have the status of:

ACTIVE NFFE

(see paragraph 9d of the Certification for a detailed definition)

Organization

in the process or liquidation or reorganization

The organization is in the process of

liquidation of its assets or reorganization with the intent to continue or recommence operations in a business other than that of a financial institution

and

at the same time

:

For the last 5 years it has not conducted any activity considered to be financial activity

If you meet these criteria, in most cases your activity will have the status of:

ACTIVE NFFE

(see paragraph 9g of the Certification for a detailed definition)Slide5

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FATCA status determination criteria (3)

Criteria

FATCA status

Associations and NGOs

Your entity is an NGO, especially one established and operating for religious, charitable, scientific, artistic, cultural or educational purposes

or

It is established and operates in its jurisdiction of residence as 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

and

at the same time

:

It is exempt from income tax in its country of residence;

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

The applicable laws of the entity’s jurisdiction of residence or the entity’s formation documents do not permit any income or assets of the entity to be distributed to, or applied for the benefit of, a private person or a non-charitable entity

(other than pursuant to the conduct of the entity’s charitable activities, or as payment of reasonable compensation for services rendered, or as payment representing the fair market value of property which the entity has purchased)

The applicable laws of the entity’s jurisdiction of residence or the entity’s formation documents require that, upon the entity’s liquidation or dissolution, all of its assets be distributed to a governmental entity or another non-profit organization, or escheat to the government of the entity’s jurisdiction of residence

If you meet these criteria, in most cases your activity will have the status of:

ACTIVE NFFE

(see paragraph 9k of the Certification for a detailed definition)

Note:

If your activity does not meet the criteria set out above, you most probably have the status of a PASSIVE NONFINANCIAL ENTITY

(see item 10 of the certification for a detailed definition).Slide6

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FATCA status determination criteria (4)

Polish branches of foreign business entitiesA branch of a foreign entity which does not meet the criteria of a “financial institution” should be identified by the tax residence country of the head office and the business profile of the entity as a whole.

A branch of a U.S. business entity which is not a financial institution should be identified by the tax residence of the head office and file a W9.Slide7

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Final Comments

If none of the definitions in the table fits the description of your business activity, please consult your financial or tax advisor.

A full catalogue of the FATCA status definitions is available in the references for the certification and on the website of the Finance Ministry in the “Agreement between the Government of the United States of America and the Government of the Republic of Poland to Improve International Tax Compliance and to Implement FATCA”:http://www.finanse.mf.gov.pl/documents/766655/3080113/FATCA.pdf Slide8

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orestiistis adio. Et ommodit issimpo repudita sum quiantis ape ea coris aut et mo quati nonsequia seque lit ut eicatestrum reperio doluptis dolla nes earum et veribus daecument hilit essit lam qui denimus pre, et prest, aut aut voluptatis aligenectur, quaeThis advertising material has been published solely for information purposes and it does not constitute an offer within the meaning of Article 66 of the Civil Code. Citi and Citi Handlowy are registered trademarks of Citigroup Inc., used under license. Citigroup Inc. and its subsidiaries are also entitled to rights to certain other trademarks contained herein.

Bank Handlowy

w Warszawie S.A. with its registered office in Warsaw at ul. Senatorska 16, 00-923 Warszawa, entered in the Register of Entrepreneurs of the National Court Register by the District Court for the capital city of Warsaw in Warsaw, 12th Commercial Department of the National Court Register, under KRS No. 000 000 1538, NIP 526-030-02-91; the share capital is PLN 522,638,400, fully paid-up.