Qualified Intermediary and US Withholding Tax Regime

Qualified Intermediaries (QI) Internal Revenue Code Chapter 3, Non-resident Withholding Tax Regime

Intermediaries are those who receive income for another. Foreign intermediaries collect payments on behalf of foreign owners. A qualified intermediary (QI) is a foreign intermediary that is a party to a withholding agreement with the IRS. Please visit our Resources page for links to more information on Qualified Intermediaries.

         USCANTAX provides the following services:

    • Assistance with applications for QI status and renewal of QI Agreements
    • Policy, new account on-boarding and online Forms W-8 and W-9 validation systems setup. Training of account opening staff 
    • Due diligence of AML/KYC documentation and Forms W-8, W-9, 1099, 1042 Compliance. Perform a mini external QI audit (QI Health check) 
    • Assistance with QI and PAI external audits and consolidated banking groups QI audits 
    • Annual QI Compliance – Preparation of original or amended Forms 1099s and 1042s series and omnibus account withholding
    • Assistance with QI audit waiver, QI or PAI correspondence audit, or QI modified audit
    • Assistance with Withholding Foreign Partnership & Withholding Foreign Trust Agreements and Compliance
    • Assistance with any IRS related matters

U.S. Tax Assistance with General (Non-QI) Internal Revenue Code Chapter 3, Non-resident Withholding Tax Regime

In addition to services to QIs, USCANTAX provides services to Foreign Private Investors and nonqualified intermediaries (non-QIs). The term  “nonqualified intermediary” means any intermediary that is not a U.S. person and not a qualified intermediary, or a qualified intermediary that is not acting in its capacity as a qualified intermediary with respect to a payment. Please visit our Resources page for links to more information on the general U.S. withholding tax regime.

    • Private Investor, Equity/Hedge Funds, Foreign Corporate Partnership and Trust structuring advice to minimize U.S. tax withholding
    • Build or modify on-boarding or pre-existing account client classification, documentation and validation (Forms W-8,W-9) systems
    • Assistance to U.S. withholding agents with non-QI compliance – Preparation of original or amended Form 1099s or 1042s series

Foreign Investors in U.S. Real Property Interests (FIRPTA planning and compliance)

The Foreign Investment in Real Property Tax Act of 1980 (“FIRPTA”) treats gain and loss from dispositions of U.S. real property interests (USRPI) as U.S.-source income or loss effectively connected with the conduct of a U.S. trade or business. The USRPI includes not only direct equity interests in U.S. real estate but holdings through pass-through entities (partnerships, estates, and trusts) and stock in domestic corporations. The FIRPTA tax on the net gain is due by the disposing foreign person, however in order to ensure collection the acquirer is required to withhold 10% of the gross price paid. Please visit our Resources page for links to more information on FIRPTA tax.

    • Foreign Private Investor, Corporate, Partnership & Trust entity structuring advice to minimize U.S. income, estate and withholding taxes
    • Advice on tax efficient U.S. statutory elections
    • Planning and preparation of Withholding Tax Forms W-8, 1042 and 8288 series
    • Preparation of Non-resident Individual and Foreign Trust Forms 1040-NR & Foreign Corporation Form 1120-F  

Inbound Foreign Passive Investors (other than in real estate – FIRPTA) such as public and private equity funds

  • U.S. tax structuring advice to minimize U.S. income, estate and withholding taxes, using Corporate, Partnership & Trust and Hybrid entities
  • Chapter 3 withholding tax registration and annual reporting
  • Preparation of U.S. federal and state, resident and non-resident income tax returns