Unveiling the Intricacies of FATCA Foreign Passthru Payments

The IRS has reserved the possibility of introducing withholding on “foreign passthru payments”. ... Means the Foreign Account Tax ... foreign passthru payment and gross proceeds withholding that minimizes burden. ... For purposes of this definition, the term FFI Agreement means where relevant, ... The principal targets of FATCA enforcement are “foreign financial institutions” (FFIs). An FFI is a foreign entity that is engaged in a banking, ... ... definition of foreign pass-through payment in the Proposed Regulations,. Treasury and the IRS have provided some indications of the future definition: (1) No ... A participating FFI that is prohibited by foreign law from withholding as required under paragraph (b) of this section with respect to an account must close ... January 1, 2017. Withholding on foreign passthru payments. The Proposed Regulations reserve on the definition of a foreign passthru payment; the term ... ... payment of gross proceeds (definition of FATCA withholdable payments would no longer include gross proceeds), (2) deferral of withholding on ... (See Internal Revenue Code section 7701(a)(31) for the definition of a foreign estate and a foreign trust.), ... The term withholdable payment means:. Withholding on foreign passthru payments serves important purposes. ... Despite being attributable to the U.S. source payment, the payment made to ... A foreign entity is an FFI if, inter alia, it is an “investment entity” as defined in the Treasury Regulations. There are various circumstances ...