Unlocking FATCA Passthru Payment Withholding A Key to Global Tax Compliance

Under FATCA, US-based funds are treated as US financial institutions (USFIs) and are required to withhold on payments to non-US entity investors who refuse to ... In order for an FFI to be treated as a participating FFI, it must also agree to withhold on passthru payments to recalcitrant account holders ... Participating FFIs will be required to report Passthru Payments2 beginning January 1, 2015 but will not be required to withhold on Passthru Payments prior to ... ... Tax Compliance Act (FATCA) and chapter 3 of the Internal Revenue Code. ... withholding on foreign passthru payments. These provisions represent ... The agreement will also obligate FFIs to withhold on passthru payments made by the FFI. ▫. Payments to NFFEs will be subject to FATCA. An FFI is required to deduct and withhold 30% of any passthru payment made to a recalcitrant account holder or non-participating FFI. A passthru ... The tax is imposed on the person making the payment to the foreign person, and this payor is often a US financial institution; the payor/withholding agent has ... The IRS has issued proposed new regulations that will further delay the imposition of withholding tax on foreign passthru payments. The Proposed Regulations would defer the withholding requirement on a Foreign Passthrough Payment made to nonparticipating FFIs or recalcitrant ... Here, FATCA imposed withholding to on these “foreign pass-through payments” so that U.S. citizens could not avoid U.S. taxation by moving money ...