Unveiling the Impact of FATCA Passthru Payment Withholding on Cross-Border Transactions

Similar to the underlying rationale in relation to gross proceeds withholding, our view is that foreign passthru payment withholding is no longer required to ... ... F.A.T.C.A. Thus, to prevent the use of “F.A.T.C.A. blockers,” F.A.T.C.A. imposes a withholding tax on foreign pass-thru payments. Although the proposed ... The Proposed Regulations would defer the withholding requirement on a Foreign Passthrough Payment made to nonparticipating FFIs or recalcitrant ... Participating FFIs must withhold on any passthru payments made to their recalcitrant account holders and to nonparticipating FFIs. Similar to ... After 2015, it may be virtually impossible for foreign financial institutions (FFls) to avoid the reach of the Foreign Account Tax ... withholding on certain payments (“Withholdable Payments”). ... Deferral of FATCA Withholding on Foreign Pass-thru Payments: “Foreign Pass-thru. Pass-through payments under FATCA are certain payments that would originate from a debtor payment, which passes through a foreign financial institution ... A withholding. Agent is required to withhold 30.0 per cent of any passthru payment made to a non- participating FFI. The underlying purpose of the passthru ... withholding on Passthru Payments, eliminate withholding on cer- tain insurance premiums, and clarify the definition of an investment entity, a ... Under FATCA, payments of US source income to FFIs are subject to a 30% withholding tax unless the FFI is a participating FFI or otherwise exempt from ...