The term “Entity” referred to in these Regulations means a legal person or a legal arrangement, such as a corporation, a partnership, a trust, a foundation, or an organization.
The term “Related Entity” referred to in these Regulations means an Entity controlling the other Entity, or two Entities under common control. Such entities constitute Related Entities. If two Entities which are Investment Entities described in Subparagraph 2 of Article 8 are under common management, and such management fulfills the due diligence obligations of such Investment Entities, the two Entities are deemed as Related Entities.
The term “Control” referred to in the preceding paragraph means direct or indirect ownership of more than 50% of the vote and value in an Entity.

The term “Financial Institution” referred to in these Regulations means a Depository Institution, a Custodial Institution, an Investment Entity, and a Specified Insurance Company.
The term “Reporting Financial Institution” referred to in these Regulations means Financial Institutions in the territory of the ROC other than those referred to in Article 3 of these Regulations.

The term “Depository Institution” referred to in these Regulations means an Entity that accepts deposits in the ordinary course of a banking or similar business.

The term “Custodial Institution” referred to in these Regulations means that an Entity holding Financial Assets for the account of others as a substantial portion of its business, and that the Entity’s gross income attributable to the holding of Financial Assets and related financial services equals or exceeds 20% of the Entity’s gross income during either the most recent 3 accounting years or a period the Entity has been in existence if the period is less than 3 years.

The term “Investment Entity” referred to in these Regulations means any Entity of the following:
1. An Entity primarily conducts as a business any of the following activities or operations for or on behalf of a customer, and the Entity’s gross income attributable to the relevant activities equals or exceeds 50% of the Entity’s gross income during either the most recent 3 accounting years or a period the Entity has been in existence if the period is less than 3 years.
(1) Trading in money market instruments such as cheques, drafts, certificates of deposit, bills, derivatives, etc.; foreign exchange; exchange, interest rate and index instruments; transferable securities; or commodity futures trading.
(2) Individual and collective portfolio management.
(3) Otherwise investing, administering, or managing Financial Assets or money on behalf of other persons.
2. An Entity is managed by another Entity that is a Depository Institution, a Custodial Institution, a Specified Insurance Company, or an Investment Entity described in the preceding subparagraph, and the gross income of the first-mentioned Entity attributable to investing, reinvesting, or trading in Financial Assets equals or exceeds 50% of the first-mentioned Entity’s gross income during either the most recent 3 accounting years or a period the first-mentioned Entity has been in existence if the period is less than 3 years.

The term “Specified Insurance Company” referred to in these Regulations means an insurance company or 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 Insurance Contract.

The term “Financial Assets” referred to in these Regulations means a security, partnership interest, commodity, swap, Insurance Contract, Annuity Insurance Contract, or any interest in the aforesaid assets, except for a non-debt, direct interest in real property or a commodity that is a physical good.

The term “Governmental Entity” referred to in these Regulations means the government at various levels, or any agency, institution, organization, or other entity that is directly or indirectly wholly held or controlled by the government at various levels.

The term “Broad Participation Retirement Fund” referred to in these Regulations means a fund established to provide retirement, disability, or death benefits to beneficiaries that are employees in consideration for services rendered, provided that the following requirements are met:
1. A single beneficiary of the fund does not have a right to more than 5 per cent of the fund’s assets.
2. The fund is subject to government regulations and provides information reporting to the tax authorities.
3. At least one of the following requirements is met:
(1) The fund is generally tax-favored on investment income.
(2) The fund receives at least 50% of its total contributions from the sponsoring employers, other than transfers of assets from other retirement funds described in subparagraph 2 of Article 3, or from retirement and pension accounts described in subparagraph 1 of Article 23.
(3) Distributions or withdrawals from the fund are allowed only upon the occurrence of retirement, disability, or death, except rollover distributions to other retirement funds described in subparagraph 2 of Article 3 or retirement and pension accounts described in subparagraph 1 of Article 23, or penalties applied to distributions or withdrawals made before the occurrence of retirement, disability, or death.
(4) Contributions, other than certain permitted make-up contributions, by employees to the fund are limited by reference to earned income of the employee or may not exceed USD 50,000 annually, the calculation of contributions shall apply the rules set forth in paragraph 2 of Article 34 and Article 49.

The term “Narrow Participation Retirement Fund” referred to in these Regulations means a fund established to provide retirement, disability, or death benefits to beneficiaries that are employees in consideration for services rendered, provided that the following requirements are met:
1. The fund has fewer than 50 participants.
2. The fund is sponsored by an employer that is not an Investment Entity or a Passive Non-Financial Entity (hereinafter referred to as “NFE”).
3. The employee and employer contributions to the fund, other than transfer of assets from retirement and pension accounts described in subparagraph 1 of Article 23, are limited by reference to earned income of the employee.
4. Participants that are Foreign Residents are not entitled to more than 20% of the fund’s assets.
5. The fund is subject to government regulations and reports information to the tax authorities.

The term “Exempt Credit Card Issuer” referred to in these Regulations means an issuer of credit cards that accepts 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, provided that no later than 31 December 2018, the issuer implements policies and procedures either to prevent a customer from making an overpayment in excess of USD 50,000, or to ensure that any customer overpayment in excess of USD 50,000 is refunded to the customer within 60 days. The customer overpayment in each case shall be calculated applying the rules set forth in paragraph 2 of Article 34 and Article 49, and not refer to credit balances to the extent of disputed charges.

The term “Exempt Collective Investment Vehicle” referred to in these Regulations means a collective investment vehicle in which all of the interests are directly or indirectly held by non-Reporting Persons, including an Investment Entity that has issued physical shares in bearer form and meets the following requirements:
1. No longer issuing any physical shares in bearer form after 31 December 2018.
2. Retiring all physical shares in bearer form upon surrender.
3. Performing the due diligence procedures when physical shares in bearer form are presented for redemption or other payment, and reporting required information in accordance with these Regulations.
4. Having in place policies and procedures to ensure that physical shares in bearer form are redeemed or immobilized by 31 December 2018.
The Exempt Collective Investment Vehicle in the preceding paragraph does not include a collect investment vehicle in which the interests are held by a non-Reportable Person which is a Passive NFE with Controlling Persons who are Reportable Persons.

The term “Financial Account” referred to in these Regulations means an account maintained by a Financial Institution, including a Depository Account, a Custodial Account, or an account that meets any of the following requirements, other than an Excluded Account described in Article 23:
1. In the case that a Financial Institution is an Investment Entity, the account is any equity or debt interest in the Investment Entity. However, the account does not include an Investment Entity solely rendering investment advice to, or managing portfolios for, or acting on behalf of, a customer for the purpose of investing, administering, or managing Financial Assets deposited in the name of the customer with other Financial Institutions.
2. Any equity or debt interest in a Financial Institution not described in the preceding subparagraph, provided that the class of interests was established with the purpose of avoiding reporting in accordance with these Regulations.
3. Any Cash Value Insurance Contract and any Annuity Insurance Contract issued or maintained by a Financial Institution, other than a non-investment-linked and non-transferable immediate life annuity that is issued to an individual and monetizes a pension or disability benefit provided under an account that is an Excluded Account.

The term “Depository Account” referred to in these Regulations includes the following accounts maintained by a Financial Institution in the ordinary course of a banking or similar business:
1. A commercial, checking, savings, time, or thrift account.
2. A certificate of deposit, a thrift certificate, an investment certificate, a certificate of indebtedness, or other similar instrument.
3. An amount held by an insurance company pursuant to a guaranteed investment contract or a similar agreement to pay or credit interest thereon.

The term “Custodial Account” referred to in these Regulations means an account holds Financial Assets for the benefits of other persons, which does not include an Insurance Contract or an Annuity Insurance Contract.

The term “Equity Interest” referred to in these Regulations means an interest in an Entity. In the case that a partnership is a Financial Institution, the interest is a capital or profit interest in the partnership. In the case that a trust is a Financial Institution, the interest is all or a portion of the interest of a trust held by a settlor or a beneficiary, or any other natural persons exercising ultimate effective control over the trust. A person is treated as the beneficiary of a trust if such person has the right to directly or indirectly receive a mandatory or a discretionary distribution from the trust.

The term “Insurance Contract” referred to in these Regulations means a contract under which the issuer agrees to pay an amount upon the occurrence of a specified contingency involving mortality, morbidity, accident, liability, or property risk, which does not include an Annuity Insurance Contract.
The term “Annuity Insurance Contract” referred to in these Regulations means a contract under which the issuer agrees to make payments for a period of time determined by reference to the life expectancy of an individual.

The term “Cash Value” referred to in these Regulations means the greater of an amount that the policyholder is entitled to receive upon surrender or termination of the contract, and an amount the policyholder can borrow under or with regard to the contract, which does not include the following amount payables:
1. A payment solely by reason of the death of an individual insured under a life Insurance Contract.
2. A payment as a personal injury or sickness benefit or other benefit providing indemnification of an economic loss incurred upon the occurrence of the event insured against.
3. A payment as a refund of a previously paid premium under a non-investment-linked life Insurance Contract or an Annuity Insurance Contract, due to cancellation or termination of the contract, decrease in risk exposure during the effective period of the contract, or arising from the correction of a posting or similar error with regard to the premium for the contract.
4. A payment as a policyholder dividend, other than a termination dividend, provided that the dividend relates to an Insurance Contract under which the only benefits payable are described in subparagraph 2 of this Article.
5. A return of an advance premium or premium deposit, which does not exceed the next annual premium payable under the Insurance Contract for which the premium is payable at least annually.

The term “Preexisting Account” referred to in these Regulations including a Preexisting Individual Account or a Preexisting Entity Account, means a Financial Account held by an individual or an Entity, and maintained by a Reporting Financial Institution as of 31 December 2018.
The term “New Account” referred to in these Regulations including a New Individual Account or a New Entity Account, means a Financial Account held by an individual or an Entity, and maintained by a Reporting Financial Institution and opened on or after 1 January 2019. However, such Financial Account is deemed a Preexisting Account, if the following requirements are met:
(1) The Account Holder also holds with the same Reporting Financial Institution (or with its Related Entity located in the territory of the ROC as the Reporting Financial Institution) a Financial Account opened as of 31 December 2018;
(2) The Reporting Financial Insitution (and its Related Entity located in the territory of the ROC as the Reporting Financial Institution) treats the Financial Account described in the preceding subparagraph, and any other Financial Accounts held by the Account Holder described in the preceding subparagraph opened and managed on or after 1 January 2019 as a single Financial Account for purposes of implementing special due diligence provisions pursuant to Article 47, and for purposes of calculating the balance or value of any of the Financial Accounts pursuant to Article 49;
(3) The Reporting Financial Institution is permitted to satisfy AML/KYC Procedures for any Financial Account which is opened and managed on or after 1 January 2019 and is held by the Account Holder described in subparagraph 1 by relying upon the results of AML/KYC Procedures performed for the Financial Account described in subparagraph 1; and
(4) Upon the opening of a Financial Account which is opened and managed by the Reporting Financial Institution on or after 1 January 2019 and is held by the Account Holder described in subparagraph 1, the provision of new, additional, or amended customer information by the Account Holder is not required other than for purposes of the Regulations.
The term “Lower Value Account” referred to in these Regulations means a Preexisting Individual Account with an aggregate balance or value as of 31 December 2018 that does not exceed USD 1,000,000.
The term “High Value Account” referred to in these Regulations means a Preexisting Individual Account with an aggregate balance or value that exceeds USD 1,000,000 as of 31 December 2018 or 31 December of any subsequent year.

The term “Excluded Account” referred to in these Regulations means any of the following accounts:
1. A retirement or pension account that satisfies the following requirements:
(1) The account is subject to regulation as a personal retirement account or is part of a registered or regulated retirement or pension plan for the provision of retirement or pension benefits, including disability and death benefits.
(2) The account is tax-favored.
(3) Information reporting is required to the tax authorities with respect to the account.
(4) Withdrawals are conditioned on retirement, disability, or death, or penalties apply to withdrawals made before the occurrence of retirement, disability, or death.
(5) Either annual contributions are limited to USD 50,000 or less, or a maximum lifetime contribution is limited to the account of USD 1,000,000 or less, applying the rules set forth in paragraph 2 of Article 34 and Article 49. The contributions do not include assets or funds transferred from a Financial Account described in this subparagraph or subparagraph 2 of this Article, or from the retirement or pension funds described in subparagraph 2 of Article 3.
2. A non-retirement account that satisfies the following requirements:
(1) The account is subject to regulation as an investment vehicle for purposes other than for retirement and is regularly traded on an established securities market, or the account is subject to regulation as a savings vehicle for purposes other than for retirement.
(2) The account is tax-favored.
(3) Withdrawals are conditioned on meeting specific criteria related to the purpose of the investment or savings account, or penalties apply to withdrawals made before such criteria are met.
(4) Annual contributions are limited to USD 50,000 or less, applying the rules set forth in paragraph 2 of Article 34 and Article 49. The contributions do not include assets or funds transferred from a Financial Account described in the preceding subparagraph or this subparagraph, or from the retirement or pension funds meeting the requirements of subparagraph 2 of Article 3.
3. A life Insurance Contract with a coverage period that will end before the insured individual attains age 90, provided that the contract satisfies the following requirements:
(1) Periodic premiums, which do not decrease over time, are payable at least annually during the period the contract is in existence or until the insured attains age 90, whichever is shorter.
(2) The contract has no Cash Value that any person can access by withdrawal, loan, or otherwise, without terminating the contract.
(3) The amount, other than a death benefit, payable upon cancellation or termination of the contract, cannot exceed the aggregate premiums paid for the contract, less the sum of mortality, morbidity, and expense charges for the periods of the contract’s existence and any amounts paid prior to the cancellation or termination of the contract.
(4) The contract is not held by a transferee for value.
4. An account that is held by an estate accompanied with a copy of the deceased’s will, a death certificate, or other similar documentation.
5. An account held on behalf of a party involved in connection with any of the following:
(1) A court order or judgment.
(2) A sale, exchange, or lease of real or personal property, provided that the account satisfies the following requirements:
i. The account is funded solely with a down payment, earnest money, deposit in an amount appropriate to secure an obligation directly related to the transaction, or a similar payment, or is funded with a Financial Asset that is deposited in the account in connection with the sale, exchange, or lease of the property.
ii. 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.
iii. The assets of the account and 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.
iv. The account is not a margin or similar account established in connection with a sale or exchange of a Financial Asset.
v. The account is not associated with an account described in subparagraph 6 of this Article.
(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.
6. A Depository Account exists solely because a customer makes a payment in excess of a balance due with respect to a credit card or other revolving credit facility and the overpayment is not immediately returned to the customer, provided that no later than 31 December 2018, the issuer implements policies and procedures either to prevent a customer from making an overpayment in excess of USD 50,000, or to ensure that any customer overpayment in excess of USD 50,000 is refunded to the customer within 60 days. The customer overpayment in each case shall be calculated based on the facts of actual economic relationships, and apply the rule set forth in paragraph 2 of Article 34, and not refer to credit balances to the extent of disputed charges.
7. When a Reporting Financial Institution performs due diligence, the aggregate balance or value of an account does not exceed USD 1,000 for the year, and the amount calculation shall apply the rule set forth in paragraph 2 of Article 34, provided that the following requirements are met:
(1) The Account Holder has not initiated a transaction with regard to the account or any other account held by the Account Holder with the Reporting Financial Institution in the past 3 years, and the account holder has not communicated with the Reporting Financial Institution that maintains such account regarding the account or any other account held by the Account Holder with the Reporting Financial Institution in the past 6 years.
(2) In the case of a Cash Value Insurance Contract, the account holder has not communicated with the Reporting Financial Institution regarding the account related to the contract or any other account held by the Account Holder with the Reporting Financial Institution in the past 6 years.
8. Any other account that presents a low risk of being used to evade tax, which is announced by the Ministry of Finance.

The term “Reportable Account” referred to in these Regulations means an account held or jointly held by Reportable Persons or by a Passive NFE with Controlling Persons that are Reportable Persons, provided that it has been identified as such pursuant to the due diligence procedures described in Section 3.

The term “Reportable Person” referred to in these Regulations means a resident regulated by tax laws in a Reportable Jurisdiction, or an estate of a decedent that was a resident of a Reportable Jurisdiction. An Entity such as a partnership, a limited liability partnership, or a similar legal arrangement that has no residence for tax purposes shall be treated as a resident of the jurisdiction in which its place of effective management is situated.
Any of the following conditions met is not a Reportable Person described in the preceding paragraph:
1. A corporation the stock of which is regularly traded on an established securities market.
2. Any corporation that is a Related Entity of a corporation described in the preceding subparagraph.
3. A Governmental Entity.
4. An International Organization.
5. A Central Bank.
6. A Financial Institution.
The term “Reportable Jurisdiction” referred to in these Regulations means a country or a jurisdiction with which the ROC has concluded a tax information exchange treaty or agreement, to proceed with automatic exchange of Financial Account information, and is announced by the Ministry of Finance.

The term “Foreign Account” referred to in these Regulations means a Financial Account held or jointly held by Foreign Residents or by a Passive NFE with Controlling Persons that are Foreign Residents.
The term “Foreign Resident” referred to in these Regulations means a resident regulated by tax laws in a Foreign Jurisdiction, or an estate of a decedent that was a resident of a Foreign Jurisdiction. An Entity such as a partnership, a limited liability partnership, or a similar legal arrangement that has no residence for tax purposes shall be treated as a resident of the jurisdiction in which its place of effective management is situated.
The term “Foreign Jurisdiction” referred to in these Regulations means a country or a jurisdiction other than the ROC.

The term “Controlling Persons” referred to in these Regulations means natural persons who exercise control over an Entity, and shall be determined in the order of the following subparagraphs:
1. Directly or indirectly owning more than 25 percent of the Entity’s shares, capital, or equities.
2. Exercising control over the Entity through other means.
3. Holding the positions as senior managing officials.
In the case of a trust or other legal arrangements, the term “Controlling Persons” means the settlors, the trustees, the protectors, the beneficiaries, any other natural persons exercising ultimate effective control over the trust, or persons in equivalent or similar positions.

The term “Active NFE” referred to in these Regulations means a NFE that meets any of the following conditions:
1. Less than 50% of the NFE’s gross income for the preceding accounting year is from dividends, interest, rents, royalties, the excess of gains over losses from the sale or exchange of Financial Assets, the excess of foreign currency gains over foreign currency losses, or income derived from other non-active business, and less than 50% of the assets held by the NFE during the preceding accounting year are assets that produce or are held for the production of non-active business income.
2. The stock of the NFE is regularly traded on an established securities market, or the NFE is a Related Entity of an Entity the stock of which is regularly traded on an established securities market.
3. The NFE is a Governmental Entity, an International Organization, a Central Bank, or an Entity wholly owned by a Governmental Entity, an International Organization, or a Central Bank.
4. Substantially all of the activities of the NFE consist of holding the outstanding stock of, or providing financing and services to, one or more subsidiaries that engage in trades or businesses other than the business of a Financial Institution, except that the Entity functions as an investment fund, or any investment vehicle whose purpose is to acquire or fund companies and then hold interests in those companies as capital assets for investment purposes.
5. The NFE has not yet operated a business within 24 months after the date of its initial organization, and invests capital into assets to operate a business other than that of a Financial Institution.
6. The NFE was not a Financial Institution in the past five years, and is in the process of liquidating or reorganizing.
7. The NFE primarily engages in financing and hedging transactions with, or for, Related Entities, and does not provide financing or hedging services to non-Related Entities, provided that any such Related Entities are primarily engaged in a business other than that of a Financial Institution.
8. A NFE that meets all of the following requirements:
(1) It is established and operated in its country or jurisdiction of residence exclusively for religious, charitable, scientific, artistic, cultural, athletic, or educational purposes; or it is established and operated in its country or 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.
(2) It is exempt from income tax in its country or jurisdiction of residence.
(3) It has no shareholders or members who have a proprietary or beneficial interest in its income or assets.
(4) The applicable laws of the NFE’s country or jurisdiction of residence or the NFE’s formation documents do not permit any income or assets of the NFE 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 NFE’s charitable activities, or as payment of reasonable compensation for services rendered, or as payment representing the fair market value of properties.
(5) The applicable laws of the NFE’s country or jurisdiction of residence or the NFE’s formation documents require that, upon the NFE’s liquidation or dissolution, all of its remainder of the assets be distributed to a Governmental Entity or other non-profit organization, or escheat to the government at various levels of the NFE’s country or jurisdiction of residence.
The term “Passive NFE” referred to in these Regulations means a NFE other than those described in the preceding paragraph, or an Investment Entity described in subparagraph 2 of Article 8 which is not a Reportable Jurisdiction Financial Institution or a Participating Jurisdiction Financial Institution.
The term “Participating Jurisdiction” referred to in these Regulations means a country or a jurisdiction implementing the automatic exchange of Financial Account information in accordance with the Common Standard on Reporting and Due Diligence for Financial Account Information released by the Organization for Economic Co-operation and Development, and is announced by the Ministry of Finance.

The term “Account Holder” referred to in these Regulations means the person listed or identified as the holder of a Financial Account by the Financial Institution maintaining the account. In the case that a person other than a Financial Institution, holding a Financial Account for the benefit of other person as agent, custodian, nominee, signatory, investment advisor, or intermediary, such other person is treated as holding the account.
The Account Holder of a Cash Value Insurance Contract or an Annuity Insurance Contract is a 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 a person named as the owner in the contract and a 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 Insurance Contract, each person entitled to receive a payment under the contract is treated as an Account Holder.

The term “Anti-Money Laundering/Know Your Customer Procedures (hereinafter referred to as AML/KYC Procedures)” referred to in these Regulations means the customer due diligence procedures of a Reporting Financial Institution pursuant to the anti-money laundering or similar requirements to which such Reporting Financial Institution is subject.

The term “Tax Identification Number, TIN” referred to in these Regulations means any number to identify individuals or Entities, or any other identifying numbers with equivalent functions for administering purposes of applying tax laws of Foreign Jurisdictions.

The term “Documentary Evidence” referred to in these Regulations means any of the following documentation:
1. A certificate of residence issued by a government body.
2. A valid identification issued by a government body that includes the individual’s name and is used for identification purposes.
3. Documentation issued by a government body that includes the name of the Entity and the address of its principal office in which it is a resident, or the Entity was organized or incorporated.
4. Any audited financial statement by a certified public accountant, third-party credit report, bankruptcy filing, or securities regulator’s report.