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United States: New FAQs for QI / WP / WT

United States: New FAQs for QI / WP / WT

The IRS today issued a release announcing that there are new “frequently asked questions” (FAQs) providing guidance for qualified intermediary / withholding foreign partnership / withholding foreign trust (QI/WP/WT) that may have FATCA reporting requirements.


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The new FAQs are available on the IRS website and appear under the topic, “Provisions for 2017 QI Agreement” as follows:


Q5. In order for a QI’s QI designated accounts to remain under a Qualified Intermediary, what steps must be followed when a QI merges into an entity already operating as a non-QI?

A5.  First, the non-QI must apply for QI status at the time of the merger according to Section 5 of the QI Agreement via the QI/WP/WT Application and Accounts Management System, and, if the non-QI is approved for QI status effective as of the date of the merger, the original QI will merge into the newly approved QI (successor QI).  The original QI must notify the IRS that it intends to terminate its QI Agreement by delivery of a notice of termination and merger on the QI/WP/WT Application and Accounts Management System according to section 11.05 of the QI Agreement, provide all required information, and ensure the other requirements of section 11.05 are met.  The successor QI must provide the certification required by section 11.02(B) of the QI Agreement for the original QI’s compliance period prior to the merger.  In addition, the successor QI must provide to its withholding agent a Form W-8IMY representing its status as a QI with respect to the successor QI’s QI-designated accounts.

Added:  11-19-2018

Q6. What procedure must be followed when a QI in one country re-domiciles into another country after merging with a newly-formed entity, where the QI’s accounts remain with a branch in the original country of the QI’s residency?

A6. At the conclusion of the QI’s re-domiciliation, the QI must report its new name, and the new address of its registered office on the QI/WP/WT Application and Accounts Management System, but does not have to re-apply for QI status.  The QI’s branch information must be updated to take into account the new branch of the QI that results from the re-domiciliation.  A QI that is an FFI or a sponsoring entity must also update its information on the FATCA Registration System (please see the FATCA Registration User Guide).  The QI does not have to submit the notice of termination or the certification described under section 11.05 or 11.02(B) of the QI Agreement, as the QI’s existing QI Agreement will be treated as remaining in effect notwithstanding the merger and re-domiciliation.  However, the QI must provide to its withholding agent a Form W-8IMY revised to reflect changes resulting from the re-domiciliation that are relevant to the form.

Added:  11-19-2018

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