QI News - Issue 2015-03 | KPMG | LU
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QI News - Issue 2015-03

QI News - Issue 2015-03



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Reminder for QIs

Transition period for Joint Account Provision ends on 30 June 2015

In the past, a bank acting as a QI had the option to enter in an agreement with a nonwithholding foreign partnership or nonwithholding foreign trust to apply the simplified joint account documentation, reporting and withholding procedures.

The requirements for the application of the joint account provision have been amended with the new QI Agreement (QIA). In particular, under the provisions of the Section 4.05 of the new QIA (provided in Revenue Procedure 2014-39, that was amended by the Revised QI Agreement of 23 September 2014), the conditions to qualify as an eligible partnership or trust for the joint account provision are:

  • The partnership or trust is a certified deemed-compliant FFI (other than a registered deemed-compliant Model 1 IGA FFI), an exempt beneficial owner, an owner-documented FFI or an NFFE (other than a WP or WT).
  • The partnership or trust is a direct account holder of QI;
  • None of the partnership’s or trust’s partners, beneficiaries, or owners is a flow-through entity or is acting as intermediary for a payment made by QI to the partnership or trust;
  • None of the partnership’s or trust’s partners, beneficiaries, or owners is a U.S. person and none of its foreign partners, beneficiaries, or owners is subject to withholding or reporting under chapter 4 (which would include a nonparticipating FFI and certain passive NFFEs); and
  • The partnership or trust agrees to make available upon request to QI or QI’s auditor for purposes of QI’s compliance review under section 10 of this Agreement (including to respond to IRS inquiries regarding its compliance review) records that establish that the partnership or trust has provided QI with documentation for purposes of chapters 3 and 4 for all of its partners, beneficiaries, or owners. A partnership or trust to which a QI applies the joint account must waive any legal prohibition against providing its records to the QI (rather than the IRS).

In order to provide QIs with sufficient time to adapt their documentation procedures, the IRS provided that during a transition phase (i.e. the period beginning on the effective date of the QI Agreement, and after an extension, ending 30 June 2015), a QI that has entered into an agreement under section 4A.01 of the former QI Agreement with a partnership or trust to apply the joint account option before 30 June 2014, may continue to document the account consistent with section 4A.01 of the former QI Agreement.

After 30 June 2015 a QI should ensure that to apply the joint account provision the account is documented as follows:

  • A valid Form W-8IMY provided by the partnership or trust
  • A withholding statement that provides information for all partners, beneficiaries, or owners
  • Valid Forms W-8 or, in the case of a partnership or trust that is a certified deemed-compliant FFI, documentary evidence listed in the KYC attachment to the QIA from each partner, beneficiary, or owner, and
  • For a withholdable payment, documentation to establish the partner’s, beneficiary’s, or owner’s FATCA status.


For further information, please do not hesitate to contact us.







Any tax advice in this communication is not intended or written by KPMG to be used, and cannot be used, by a client or any other person or entity for the purpose of (i) avoiding penalties that may be imposed on any taxpayer or (ii) promoting, marketing, or recommending to another party any matters addressed herein.The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.


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