Tax Certification (6503C)

TIDM49AF

RNS Number : 6503C

BBVA International Pref S.A

09 March 2011

BBVA International Preferred, S.A. Unipersonal

CUSIP: 05530RAB4 Record Date: April 3, 2011 Payment Date: April 18, 2011

Pursuant to Spanish Law 13/1985 as amended by Laws 19/2003, 23/2005 and 4/2008, Royal Decree 1065/2007 and article 59.q or 59.s of the Corporate Income Tax Regulation approved by Royal Decree 1777/2004 of July 30, 2004, distributions received from the above securities by a non-Spanish resident holder who does not act with respect to such securities through a permanent establishment in Spain or by a Spanish resident corporation (including a non-Spanish resident holder acting, with respect to the securities, through a permanent establishment in Spain) will not be subject either to the 19% Non-Resident Income Tax (NRIT) in Spain or to a 19% withholding rate on account of the Spanish Corporate Income Tax (CIT) unless the non-Spanish resident holder, or the Spanish resident corporation, as the case may be, fails to comply with the relevant tax residency certification procedures as described below.

Participants requesting exemption from Spanish NRIT or from withholding on account of Spanish CIT via DTC's Elective Dividend Service (EDS/Tax Relief (SM) ) are required to provide beneficial owner information in support of their elections. The Issuer, the Guarantor and the Fiscal and Paying Agent have arranged certain procedures with DTC and Acupay System to facilitate the collection from participants of such information concerning the identity and residence of beneficial owners of the securities. Failure to certify via EDS/Tax Relief (SM) , provide beneficial owner information via Acupay, or to follow the required procedures, will result in 19% withholding from the distribution payment.

Further information on Spanish withholding tax requirements can be found starting on pages 1, 62, A-1 and B-1 of the Prospectus for the Series C Preferred Securities, which can be downloaded from www.acupaysystem.com/BBVAPreferred.

IMPORTANT: Participants that clear for downstream correspondents on an omnibus basis are subject to revised operational requirements regarding entering beneficial owner information into the Acupay System. To comply with Spanish tax regulations and "Know Your Customer" policies mandated by the USA PATRIOT Act, Participants may not enter beneficial owner information into the Acupay System on behalf of their omnibus downstream correspondents. Omnibus downstream correspondents are required to enter their beneficial owner client information directly and Participants must confirm their downstream correspondents' aggregate omnibus positions. Please read the following procedures carefully.

Participants requesting exemption from Spanish NRIT or from withholding on account of Spanish CIT via DTC's Elective Dividend Service (EDS/Tax Relief (SM) ) are also required to provide information concerning the identity and country of residence of beneficial owners in the manner described below:

 
 1.   Beginning on April 4, 2011 (the first New York Business 
       Day following the Record Date) and until 8 p.m. (New 
       York time) on April 12, 2011 (the Standard Deadline), 
       DTC participants must enter certain information into 
       the Acupay System regarding the beneficial owners 
       of the Series C Preferred Securities by completing 
       these required steps: 
      A.   DTC participants must visit the Acupay System website 
            at www.acupaysystem.com and register (i) their institution, 
            (ii) one or more authorized employees who will be 
            responsible for making tax certifications on the behalf 
            of the DTC participant and (iii) financial intermediaries 
            (i.e. "downstream correspondents") for which the DTC 
            participants provide clearing arrangements on an "omnibus" 
            basis. If the participant, its downstream correspondents, 
            or members of their respective teams, were previously 
            registered to use the Acupay System (for this or any 
            other securities issue), there is no need to register 
            again - their existing login details should still 
            work. 
           NOTE: DTC participants or their downstream correspondents 
            which are located in countries that are not OECD (Organisation 
            for Economic Co-operation and Development) member 
            countries (OECD Countries) nor countries with which 
            Spain has entered into a Treaty for the Avoidance 
            of Double Taxation (Tax Treaty Countries) (including 
            countries and territories classified as tax havens 
            by Spanish law) are non-Qualified Participants and 
            as such will be allowed to register in the Acupay 
            System but will not be eligible to participate in 
            the "Relief-at-Source Procedures". Such entities may, 
            however, follow the "Quick Refund Procedures for DTC 
            participants or their downstream correspondents which 
            are non-Qualified Participants" discussed below. Please 
            refer to Annex A, B and C respectively for a list 
            of Tax Haven Countries and Territories, OECD Countries 
            and Tax Treaty Countries. 
      B.   Once registered, participants and downstream correspondents 
            must provide tax certifications on behalf of their 
            clients who are the ultimate beneficial holders. This 
            should be done using either the "one-by-one" method, 
            the "bulk method" or the "renew previous submissions 
            method", as detailed on www.acupaysystem.com. 
      C.   DTC participants that provide clearing arrangements 
            for downstream correspondents, irrespective of whether 
            such downstream correspondents are Qualified Intermediaries 
            (as described by the US IRS in Revenue Procedure 2000-12 
            found in Cumulative Bulletin 2000-1 of Internal Revenue 
            Bulletin 2000-4) should: 
            i. Register their downstream correspondents in the 
            Acupay System by entering the details of such downstream 
            correspondents directly into the "Add a New Registered 
            Downstream Correspondent" section of their Acupay 
            System account, or by allowing such downstream correspondents 
            to register themselves by providing them with the 
            Acupay Registration Code found within the "View Downstream 
            Correspondent Registrations" section of the Acupay 
            System. 
            * Once registered the downstream correspondents will 
            be able to process Acupay tax relief-at-source client 
            certifications for their own clients. Since downstream 
            correspondents are required to "know their clients", 
            it is logical that they are the entities, which should 
            enter client information regarding their clients into 
            the Acupay System - not the upstream clearer (which 
            is a DTC participant). 
            ii. Confirm the downstream correspondent's omnibus 
            position. The DTC participant should confirm the aggregate 
            position in the securities held on the behalf of each 
            of its downstream correspondents. This confirmation 
            is made ONLY with regard to the aggregate omnibus 
            amount held by the downstream correspondents, NOT 
            with regard to the identity or details of the end 
            investor clients of the downstream correspondents. 
            These aggregate position confirmations should be kept 
            updated through 9:45 a.m. on the Distribution Payment 
            Date (just like all other information entered in the 
            Acupay System). 
            iii. Make the necessary EDS/Tax Relief (SM) elections, 
            to match the total amount of Acupay certifications 
            made by the downstream correspondent(s). 
      D.   The Acupay System may only be used to submit the details 
            of beneficial owners who are exempt from Spanish withholding 
            tax. Therefore, participants may not enter into the 
            Acupay System details of beneficial owners who are 
            subject to withholding (such as beneficial owners 
            who are physical persons located in Spain). 
      E.   Once beneficial owner information has been entered 
            into the Acupay System, the Acupay System will produce, 
            as applicable, tax certificate I, II or III which 
            must be reviewed, printed, signed (if accurate), scanned 
            and emailed (by the participant or downstream correspondent, 
            as relevant) to [e-mail] 
            or faxed to Acupay at [phone] or [phone]. 
      F.   Certifying parties (i.e. participants or downstream 
            correspondents) MUST use the tax certificates that 
            are generated by the Acupay System (showing the official 
            Acupay bar code) as no other form of tax certificate 
            will be accepted. 
           NOTE: Acupay submissions will not be processed until 
            Acupay has received signed tax certificates, as described 
            above. 
      G.   Certifying parties will then be required to send via 
            post or courier to Acupay the original, signed tax 
            certificates I, II and III that were faxed or emailed 
            above. These original paper, signed tax certificates 
            MUST be received by Acupay by no later than 5:00 p.m. 
            London time (12:00 noon NY time) on May 13, 2011 at 
            the following address: 
                      Acupay System LLC 
                       Certifications 
                       Attn: Maria Mercedes 
                       28 Throgmorton St - First Floor 
                       London EC2N 2AN 
                       United Kingdom 
           NOTE: A participant or downstream correspondent that 
            obtains favorable tax treatment through the relief 
            at source procedure and fails to submit the original 
            physical certificates as described above may be prohibited 
            by the issuer from using the procedure to obtain favorable 
            tax treatment for future payments. In such event, 
            the certifying party will receive any future distribution 
            payment on their entire position net of 19% NRIT and 
            relief will need to be obtained directly from the 
            Spanish tax authorities by following the standard 
            refund procedure established by Spanish tax law. 
 2.   Beginning at 9 a.m. on April 4, 2011 and continuing 
       until 8 p.m. (New York time) on April 12, 2011 (the 
       Standard Deadline), DTC direct participants must also 
       make an election via EDS/Tax Relief (SM) stating their 
       aggregate positions that are exempt from Spanish withholding 
       tax -- including positions certified directly and 
       also positions certified by their downstream correspondents. 
 3.   The aggregate amounts certified through the Acupay 
       System and those elected through DTC EDS/Tax Relief 
       (SM) must be in synch. It is the responsibility of 
       each participant to ensure that the principal amount 
       of Series C Preferred Securities which they and their 
       downstream correspondents have certified via Acupay, 
       is equal to the principal amount of Series C Preferred 
       Securities for which they have made EDS/Tax Relief 
       (SM) elections at the exempt rate. Data introduced 
       in both DTC EDS/Tax Relief (SM) and Acupay may be 
       modified (in either system) until 8 p.m. (New York 
       time) on April 15, 2011. 
 4.   Acting on a best efforts basis, Acupay staff will 
       warn participants of any misalignments between DTC 
       EDS/Tax Relief (SM) elections and Acupay certifications 
       and will seek to assist in reconciling them until 
       9:45 a.m. (New York time) on April 18, 2011. DTC participants 
       whose EDS/Tax Relief (SM) elections and Acupay certifications 
       are not aligned by 9:45 a.m. (New York time) on April 
       18, 2011 will receive the distribution payment on 
       their entire position net of 19% NRIT, or on account 
       of Spanish CIT, as the case may be. DTC participants 
       who receive net treatment due to misalignment of their 
       DTC EDS/Tax Relief (SM) elections and Acupay certifications 
       may request relief through the Quick Refund Procedures 
       described below. 
 

IMPORTANT

DTC participants must ensure that EDS/Tax Relief (SM) elections entered into DTC and beneficial owner data entered into the Acupay System are synchronized and updated to reflect any changes to beneficial ownership or DTC positions occurring prior to 9:45 a.m. on April 18, 2011 (the Distribution Payment Date).

If at 9:45 a.m. New York time on April 18, 2011 there are any inconsistencies concerning the beneficial owner information supplied by a participant and its downstream correspondents to Acupay, that participant's EDS/Tax Relief (SM) elections and its position listed at DTC, payments will be made net of Spanish taxes on the entire position held by such DTC participant.

DTC PARTICIPANTS WHOSE ACUPAY CERTIFICATIONS AND EDS/TAX RELIEF (SM) ELECTIONS ARE OUT OF ALIGNMENT ON THE MORNING OF THE DISTRIBUTION PAYMENT DATE MAY REQUEST THAT DTC MANUALLY MODIFY EDS/TAX RELIEF (SM) ELECTIONS TO BRING THEM INTO ALIGNMENT BY SENDING AN EDS/TAX RELIEF (SM) CHANGE REQUEST TO DTC VIA EMAIL AT [e-mail] NO LATER THAN 9:45 A.M. NEW YORK TIME ON APRIL 18, 2011 WITH A COPY TO [e-mail], [e-mail], [e-mail], [e-mail] AND [e-mail]. LIKEWISE, IT IS THE RESPONSIBILITY OF DTC PARTICIPANTS AND THEIR DOWNSTREAM CORRESPONDENTS TO UPDATE BENEFICIAL OWNER INFORMATION ENTERED IN THE ACUPAY SYSTEM AS NECESSARY TO KEEP IT IN SYNCH WITH CLIENTS' ACTUAL POSITIONS. UPDATING MUST CONTINUE UNTIL 9:45 A.M. NEW YORK TIME ON APRIL 18, 2011.

Quick Refund Procedure

Beneficial owners who received distributions net of 19% NRIT or on account of Spanish CIT, as the case may be, due to a misalignment of their EDS/Tax Relief (SM) elections and Acupay certifications may qualify for a refund through the Quick Refund procedure. To utilize this procedure, participants must have submitted valid EDS/Tax Relief (SM) elections during the Relief at Source EDS/Tax Relief (SM) window. Relief may be obtained only up to the amount of securities as to which the relevant participant has requested DTC to make an exempt election via EDS/Tax Relief( SM) . Participants may use the Acupay System to request relief through the Quick Refund Procedures on behalf of their clients beginning April 19, 2011 until May 10, 2011.

Quick Refund Procedure for DTC participants or their downstream correspondents which are not located in OECD Countries or in Tax Treaty Countries

The Quick Refund Procedure for non-qualified DTC participants requires the submission, among other documentation, of a Government Tax Certificate from the beneficial owner's country of tax residence instead of tax certificate I or II.

Direct Refund from Spanish Tax Authorities

If investor holdings have not been certified for any reason through the Relief at Source or Quick Refund procedure and have received unfavorable tax treatment, eligible investors may request a tax refund from the Spanish tax authorities by following the standard refund procedure established by Spanish tax law.

By submitting EDS/Tax Relief (SM) elections DTC participants agree that they will indemnify BBVA International Preferred, S.A. Unipersonal and its agents for any liability which they may incur as a result of reliance upon information provided by such participant on such EDS/Tax Relief (SM) elections. The DTC participant also agrees to return any funds erroneously received (including any interest, penalties and additions to tax thereon) arising from its EDS/Tax Relief (SM) elections.

Questions regarding the EDS/Tax Relief (SM) process should be directed to Sean Bollers or Alastair Brunton of DTC's International Services at [phone] or [phone] respectively.

Questions regarding relief entitlements, obtaining relief directly from the Spanish Tax Authorities, or the Acupay System should be directed to Rosa Lopez at [phone] or Maria Mercedes at [phone] or by emailing [e-mail].

Annex A

Tax-Haven Countries & Territories

 
   Anguila, The Island of    Grenada Guernsey,          Montserrat Nauru, 
   Antigua and Barbuda,      Channel Islands Hong       Republic of Oman, 
   Islands of Bahamas,       Kong Isle of Man           Sultanate of Panama, 
   The Bahrain, Kingdom      Jersey, Channel Islands    Republic of Saint 
   of Barbados, The          Jordan, Hashemite          Lucia Saint Vincent 
   Island Bermuda            Kingdom of Lebanon,        and the Grenadines San 
   Islands, The Brunei,      Republic of Liberia,       Marino, Republic of 
   Sultanate of Cayman       Republic of                Seychelles, Republic 
   Islands Cook Islands,     Liechtenstein,             of Singapore, Republic 
   The Cyprus, Republic      Principality of Macao      of Solomon Islands 
   of Dominica, The          Mariana Islands            Turks and Caicos 
   Republic of Falkland      Mauritius Monaco,          Islands Vanuatu, 
   Islands Fiji Islands      Principality of            Republic of Virgin 
   Gibraltar                                            Islands, British 
                                                        Virgin Islands, of the 
                                                        United States 
 

Annex B

OECD Countries

 
  Australia          Hungary                Poland 
   Austria            Iceland                Portugal 
   Belgium            Ireland                Slovakia 
   Canada             Italy                  Slovenia 
   Chile              Japan                  Spain 
   Czech Republic     Korea, Republic of     Sweden 
   Denmark            Luxembourg             Switzerland 
   Finland            Mexico                 Turkey 
   France             Netherlands            United Kingdom 
   Germany            New Zealand            United States 
   Greece             Norway 
 

Annex C

Spanish Tax Treaty Countries

 
  Algeria                    Hungary Iceland India     Poland Portugal Romania 
   Argentina                 Indonesia Iran,           Russia Saudi Arabia 
   Australia                 Islamic Republic of       Serbia, Republic of 
   Austria                   Ireland Israel Italy      Slovakia Slovenia South 
   Belarus*                  Jamaica Japan Korea,      Africa Sweden 
   Belgium                   Republic of               Switzerland Tajikistan* 
   Bolivia                   Kyrgyzstan* Latvia        Thailand Trinidad and 
   Bosnia and Herzegovina    Lithuania Luxembourg      Tobago, Republic of 
   Brazil                    Macedonia, The Former     Tunisia Turkey 
   Bulgaria                  Yugoslav Republic of      Turkmenistan* Ukraine* 
   Canada                    Malaysia Malta,           United Arab Emirates 
   Chile                     Republic of Mexico        United Kingdom United 
   China                     Moldova, Republic of      States Venezuela 
   Colombia                  Morocco Netherlands       Vietnam 
   Costa Rica                New Zealand Norway 
   Croatia                   Philippines 
   Cuba 
   Czech Republic 
   Ecuador 
   Egypt 
   El Salvador 
   Estonia 
   Finland 
   France 
   Germany 
   Greece 
 

* The countries of the former USSR are covered together under treaty (Russia, Estonia, Lithuania, Moldova and Latvia covered under separate treaties).

This information is provided by RNS

The company news service from the London Stock Exchange

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