US Withholding Tax: Practical Implications of QI and FATCA (Global Financial Markets)

The US QI and FATCA regulations came into being in 2001 and 2010 respectively. They remain today the most challenging cross border tax regulations for financial institutions to comply with and operationalise. There is an increasing trend for financial institutions to become QIs while at the same time, the rules of the QI program become more complex and onerous. Equally, most NQIs have little idea that they are subject to these extra-territorial regulations. The US FATCA anti-tax evasion framework has also evolved through the development of intergovernmental agreements. These are complex and bilaterally jurisdiction specific as well as of multiple types. Most firms are struggling to understand the concepts and how FATCA rules overlap and are affected by QI rules. The original book on this subject by the author continues to be the only book able to explain these regulations in ways that allow financial institutions to understand their compliance obligations and take practical steps to meet them, by hearing about best practice. This second edition builds on the basic framework of the QI and FATCA frameworks by updating the text to encompass the changes that have occurred since the book’s original publication. This edition will also delete material that has become obsolete or was proposed by the IRS originally but never implemented. Front Matter ....Pages i-xxx Front Matter ....Pages 1-1 Principles of IRC Code Chapter 3 (Ross McGill)....Pages 3-22 Contracts: The QI Agreement—With Commentary (Ross McGill)....Pages 23-37 Documentation (Ross McGill)....Pages 39-62 Withholding and Depositing Tax (Ross McGill)....Pages 63-77 Information Reporting and Tax Returns (Ross McGill)....Pages 79-99 Control and Oversight (Ross McGill)....Pages 101-117 Penalties (Ross McGill)....Pages 119-125 Issues for Non-qualified Intermediaries (Ross McGill)....Pages 127-144 871(m) and QDD (Ross McGill)....Pages 145-154 Front Matter ....Pages 155-155 An Introduction to FATCA (Ross McGill)....Pages 157-163 Principles of FATCA (Ross McGill)....Pages 165-182 Due Diligence (Ross McGill)....Pages 183-197 Simplifying FATCA (Ross McGill)....Pages 199-216 FATCA Withholding (Ross McGill)....Pages 217-222 Reporting (Ross McGill)....Pages 223-229 Front Matter ....Pages 231-231 International Context (Ross McGill)....Pages 233-257 Conclusions (Ross McGill)....Pages 259-272 Further Reading (Ross McGill)....Pages 273-405 Back Matter ....Pages 407-412 This book explains US qualified intermediary (QI) and Foreign Account Tax Compliance Act (FATCA) regulations in ways that allow financial institutions to understand their compliance obligations and take practical steps to meet them. It builds on the basic framework of the QI and FATCA and provides updates over the last 5 years. The US QI and FATCA regulations came into being in 2001 and 2010 respectively. They remain today the most challenging cross-border tax regulations for financial institutions to comply with and operationalise. There is an increasing trend for financial institutions to become QIs while at the same time, the rules of the QI program become more complex and onerous. Equally, most NQIs have little idea that they are subject to these extra-territorial regulations. The US FATCA anti-tax evasion framework has also evolved through the development of intergovernmental agreements (IGAs)