Nedbank FATCA and CRS glossary of terms for individual and controlling person self-certification

Ref

Term/Acronym

Description

1

EPN

The unique client identification file number that is created when you open an account with Nedbank.

2

Identification  types

The following ID types are acceptable:

·       An official country-issued identity document.

·       A valid passport issued by the country of which you are a citizen.

·       Other identification documents that the banking community of South Africa accepts for opening bank accounts such as Refugee ID or permit

3

In-care-of address

The address of individuals or entities other than that of the intended recipients where post for the intended recipients must be delivered.

4

IRS W8-BEN

This form is used by INDIVIDUALS only where the client has US indicators such as:

·        A US physical address country code

·        A US postal address country code

·        A US telephone number

·        There is evidence of regular payments being made to the US

·        There is a power of attorney on the account and that person has US indicators

For more information visit the website www.irs.gov/forms-pubs/about-form-w-8-ben

5

US

United States or United States of America includes US territories and is abbreviated as US or USA.

US territories are portions of the US that are not within the limits of any state and have not been admitted as states.

The US currently has 16 territories, of which the following five are permanently inhabited:

·       Puerto Rico

·       Guam

·       Northern Mariana Islands

·       The US Virgin Islands

·       American Samoa

6

US citizen

'United States citizen' or 'US citizen' means any of the following:

·       An individual born in the US; or

·       An individual whose parent or parents is/are a US citizen(s); or

·       An individual of whom either one or both parents were born in the US; or

·       A former alien who has been naturalised as a US citizen; or

·       An individual born in Puerto Rico; or

·       An individual born in Guam; or

·       An individual born in the US Virgin Islands.

7

US person

'United States person' or 'US person' means any of the following:

·       A US citizen (including dual citizen)

·       A US resident

·       An individual born in the US but resident in another country and who has not given up his or her US citizenship

·       A person residing in the US (resident alien*)

·       A person who is holding a Green Card or who held one in the previous calendar year

·       Certain persons who are physically present in the US for at least 31 days during the current year; 183 days during the three-year period that includes the current year and the two years immediately before that, counting: all the days you were present in the current year, and 1/3 of the days you were present in the first year before the current year, and 1/6 of the days you were present in the second year before the current year

·       A partnership organised in the US or under the laws of the US or any state thereof

·       A corporation organised in the US or under the laws of the US or any state thereof

·       Any estate where the deceased was a citizen or resident of the US other than a foreign estate

·       Any trust, if:

-       a court within the US is able to exercise primary supervision over the administration of the trust; and

-       one or more US persons have the authority to control all substantial decisions of the trust.

* A 'resident alien' is a foreign person who is a permanent resident of the country in which he or she resides but does not have citizenship. To fall under this classification in the US, a person needs to have a current 'Green Card' or to have had one in the previous calendar year.

8

US national

An individual who owes his or her sole allegiance to the US, including all US citizens and some individuals who are not US citizens. For tax purposes the term US national refers to individuals who were born in American Samoa or were born in the Commonwealth of the Northern Mariana Islands who have made the election to be treated as US nationals and not as US citizens.

For more information visit the website www.irs.gov/individuals/international-taxpayers/immigration-terms-and-definitions-involving-aliens.

9

IRS W-9

This form is used for BOTH individuals AND entities that are US persons, being US citizens (including resident aliens) or US entities.

This form is also used to request a person's taxpayer identification number (TIN) because the form acts as a certification.

These US persons are required to file an information return with the US Internal Revenue Service to report, for example, income paid to such person, real estate transactions, mortgage interest paid, acquisition or abandonment of secured property or cancellation of debt.

For more information visit the website www.irs.gov/forms-pubs/about-form-w-9

10

Tax obligation

'Tax obligations' means that you have a current tax expense. An example of a tax obligation would be that you must pay tax on your salary as and when the salary is earned.

11

Tax liabilities

'Tax liabilities' means that you may have a future tax expense that could result in your having to pay more money to the revenue authority, such as the South African Revenue Service, than what you have anticipated. An example of a tax liability is when you earn rental income and must pay tax on that rental income to the revenue authority in future.

12

Tax residencies

'Tax residencies' looks at whether you have been a resident of or have been physically present in a country for a certain amount of time, but the meaning of tax residency may mean something different from one country to the next. For individuals, physical presence in a country or jurisdiction is the main test for tax residency. Some countries also determine the tax residency of an individual by looking at factors like homeownership, if you have long-term rented accommodation or if you have certain financial interests in that country.

13

Controlling person(s)

The following are considered controlling persons:

1       For a company

·     Each natural person who directly owns 25% or more of the company's shares.

·     Where the company's shares are owned directly by a juristic person(s), each natural person who is the ultimate beneficial holder and indirectly owns 25% or more of the company's shares.

·     Each natural person who exercises control (the ability to influence materially the outcome of a vote at a general meeting or appoint or veto the appointment of the directors of the entity) through other means such as personal connections or contractual relationships.

·     If, despite reasonable effort, the information required in the above bullet points cannot be obtained, then each natural person who holds a senior management position and exercises executive control over the daily or regular affairs of the company, filling the position of chief executive officer, chairman of the board, chief financial officer, chief operating officer or similar positions.

2       For a trust

·     Settlor.

·     Founder.

·     Donor.

·     Trustee.

·     Beneficiary/Beneficiaries.

3       For a partnership of juristic persons

·     Each natural person who is the ultimate beneficial holder of 25% or more of the partnership interest.

·     Each natural person who exercises control through other means such as personal connections or contractual relationships.

·     Each natural person who controls the business decisions of the partnership, in terms of the partnership agreement.

4       For a partnership of natural persons

·     All partners of the partnership.

5       For a social club, stokvel or an association

·     All natural persons authorised to manage the affairs of the social club, stokvel or association in terms of the constitution.

6       For a cooperative

·     The managing/executive director or person(s) in a similar capacity.

7       For a close corporation

·       All members of the close corporation.

14

Entity

For the purposes of FATCA and CRS, ‘entity’ means any person other than a natural person.

Included in the definition of 'entity' in the intergovernmental agreement is any legal person or legal arrangement such as a trust, partnership or association.

For the purpose of this form 'entity' includes, but is not limited to, the following juristic persons:

·       Private company, being a (Pty) Ltd company

·       Public company, being a Ltd company (this company type could be listed or unlisted)

·       State-owned company (SOC) Ltd

·       External or foreign company

·       Personal-liability company (Inc)

·       Non-profit company (NPC)

·       Close corporation (CC)

·       Partnership

·       Trust

·       Association

·       Stokvel

15

Certificate of Loss of Nationality

Loss of citizenship, also referred to as loss of nationality, is the event of ceasing to be a citizen of a country under the nationality law of that country. It is a blanket term covering both involuntary loss of citizenship, for example through denaturalisation, as well as voluntary renunciation of citizenship.

The 'Certificate of Loss of Nationality' of the United States (CLN) is form DS-4083 of the Bureau of Consular Affairs of the United States Department of State which is completed by a consular official of the United States documenting relinquishment of United States nationality.

16

Minor person

A person younger than 18 years.

17

Taxpayer identification number (TIN) (including functional equivalent)

A unique combination of letters or numbers assigned by a jurisdiction to an individual or an entity to identify the individual or entity for the purposes of administering the tax laws of such jurisdiction.

In some jurisdictions taxpayer identification numbers are not issued. In such cases, instead of the taxpayer identification number, a functional equivalent can be used, for example a high-integrity number with an equivalent level of identification, such as the social security number in the US or the National Insurance number in the United Kingdom.

18

W-8ECI

This form must be used for individuals who are not US citizens. These persons would generally be defined as non-resident aliens that earn income from the US through the conduct of a trade or business.

19

Reportable account

Account held by one or more reportable person(s) or by passive non-financial entities where one or more controlling person(s) is/are a reportable person(s), provided it has been identified as such, based on the required due-diligence procedures within Nedbank.

The term 'reportable person(s)' means all individuals or entities that are defined either as a US person(s) or an individual or entity that is resident in a reportable jurisdiction under the tax laws of such jurisdiction, or an estate of a deceased that was a resident of a reportable jurisdiction.

Where an entity such as a partnership, limited liability partnership or similar legal arrangement that has no residence for tax purposes shall be treated as resident in the jurisdiction in which its place of effective management is situated.