FATCA Foreign Passthru Payments A Clear and Concise Explanation

The proposed regulations defer withholdings on pass-through payments. A pass-through payment is any payment made by a foreign financial ... The purpose of FATCA is to reduce U.S. tax evasion by requiring certain “foreign financial institutions” to report information about U.S. holders of their non- ... The threat of withholding on these so-called “foreign passthru payments” has remained conjectural because: (a) the IRS has not yet defined the ... The regulations reserve on the definition of a foreign passthru payment, but do provide that a participating FFI does not have to withhold ... 30 Foreign passthrough payments are defined as all other payments made by an FFI other than withholdable payments. Thus, passthrough payments ... ... foreign passthru payments, eliminate withholding on certain insurance premiums, and clarify the definition of investment entities. The ... Withholding on foreign passthru payments serves important purposes. ... Despite being attributable to the U.S. source payment, the payment made to ... ... FFI that are “attributable to” withholdable payments would be subject to withholding under FATCA (such payments, “foreign passthru payments”). Loans to FFI borrowers: Similarly, Article 4.1 means that UK RFIs will not be required to suffer or administer FATCA withholding on foreign ... r). The term “Nonparticipating Financial Institution” means a nonparticipating. FFI, as that term is defined in relevant U.S. Treasury Regulations, but does not.