II SÉRIE-A — NÚMERO 78 36

AGREEMENT

BETWEEN

THE PORTUGUESE REPUBLIC

AND

THE UNITED STATES OF AMERICA

TO IMPROVE INTERNATIONAL TAX COMPLIANCE AND TO IMPLEMENT FATCA

Whereas, the Portuguese Republic and 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 Portuguese Republic and the United States of America

for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income,

together with a Related Protocol, done at Washington on September 6, 1994 (hereinafter referred to as the

“Convention”) authorizes the exchange of information for tax purposes, including on an automatic basis;

Whereas, the United States of America enacted provisions commonly known as the Foreign Account Tax

Compliance Act (“FATCA”), which introduce a reporting regime for financial institutions with respect to certain

accounts;

Whereas, the Government of the Portuguese Republic is supportive of the underlying policy goal of FATCA to

improve tax compliance;

Whereas, FATCA has raised a number of issues, including that Portuguese financial institutions may not be

able to comply with certain aspects of FATCA due to domestic legal requirements;

Whereas, the Government of the United States of America collects information regarding certain accounts

maintained by U.S. financial institutions held by residents of Portugal and is committed to exchanging such

information with the Government of the Portuguese Republic and pursuing equivalent levels of exchange,

provided that the appropriate safeguards and infrastructure for an effective exchange relationship are in place;

Whereas, an intergovernmental approach to FATCA implementation would address legal impediments and

reduce burdens for Portuguese financial institutions;

Whereas, the Parties desire to conclude an agreement to improve international tax compliance and provide

for the implementation of FATCA based on domestic reporting and reciprocal automatic exchange pursuant to

the Convention, and subject to the confidentiality and other protections provided for therein, including the

provisions limiting the use of the information exchanged under the Convention;

Now, therefore, the Parties have agreed as follows:

Article 1

Definitions

1. For purposes of this agreement and any annexes thereto (“Agreement”), the following terms shall have

the meanings set forth below:

a) The term “United States” means the United States of America, 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.