The first purpose of the regulations is to identify US persons investing in US securities through foreign intermediaries. Another purposes is to ensure a correct application of the double taxation treaties concluded by the United States, and more generally, of the US withholding tax to be applied to foreign persons.

A Qualified Intermediary is a foreign financial institution such as a bank, broker or asset manager, which pays US source income to its customers and has signed a Qualified Intermediary Agreement (QIA) with the US tax authorities, the IRS. QIs are subject to a set of responsibilities, including.

• Identification of customers,
• Withholding, and
• Annual Reporting

• KPMG is a market leader in performing QI Audits worldwide (42% market share according to IRS sources). Please note that under the new QIA, the external audit procedures have been replaced with an internal compliance program and a periodic certification by a compliance officer.
  
• KPMG Luxembourg authored the QI handbook for the ABBL which served as a basis for the Luxembourg implementation of the QI regulations
  
• We assist on a daily basis an important number of banks regarding all kinds of QI issues (documentation, withholding, reporting, reconciliation, contact with the IRS, ...)
  
• KPMG Luxembourg provides to software vendors technical QI reporting solutions
  
• KPMG informs interested parties about any news with regard to QI regulations via the “QI update” (Newsletter published whenever news relating to QI are coming up)
  
• KPMG Luxembourg is represented at the ABBL QI working group