Qi Agreement Application
A qi is a foreign intermediary (or foreign branch of a U.S. intermediary) that has entered into an agreement with the IRS in accordance with the law. 1.1441-1 (e) (5) to simplify their obligations as withholding agents under Chapters 3 and 4 and as payers under Chapter 61 and Section 3406 for amounts paid to their account holders. The IQ agreement also allows certain foreign individuals to enter into an agreement with the IRS to act as qualified derivatives traders (QDDs) and to assume primary withholding and reporting obligations for all dividend-equivalent payments they make. Whether IQ, WP or WT status is correct for your organization depends on a number of factors. Take the time to evaluate them now so you can submit your IQ, WP or WT application on time or withhold them for certain transactions you didn`t plan for 2019. The IRS did not plan to change the applicability of kyc facilities approved in the 2017 IQ, WP and WT agreements. Therefore, an IQ, WP or WT reference institution may consider an authorized kyc facility to be an integral part of its agreement, as long as the installation does not apply to the business (or the company branch, if any). Added: 12-19-2017 A1. Yes, yes. Section 10.07 of the qi agreement provides that an IQ may request that the periodic verification requirement be dropped when it is an IQ that does not act as a QDD and meets the other requirements of Section 10.07.
In accordance with Communication 2020-2, 2020-3 I.R.B 327, an IQ that is a QDD is not required to conduct a periodic review of its QDD activities for a certification period that ends in a calendar year before 2023. However, an IQ that is a QDD (whether or not it was QDD) can continue to perform a regular audit of its qi activities, which are not QDD activities for those years. Thus, the IRS will allow an IQ that is a QDD and has a certification period ending in a calendar year before 2023, to request the abandonment of the periodic review if it otherwise meets the requirements of Section 10.07 of the IQ Agreement regarding its non-QDD activities. (If an IQ has no qi activity, it must apply for a waiver.) To apply for a waiver, the IQ should supplement Parts I, II and III (periodic assessment) of the certification, taking into account its QDD activities and non-QDD activities (with the exception of Part III, which takes into account only non-QDD activities) and, in Part A (Step 1 of 3 – Waiver Authorization), activate the box entitled “Qi is a FFI that does not act as QDD.” See FAQ Q9 under Certifications and Periodic Assessments for the Year to indicate the year of periodic verification for a qi waiver application. Update: 30.04.2020 A18. Yes, the IRS accepts an application to use the first year of the certification period when the appropriate agent (RO) or any other authorized user of the proposed compliance entity files a CGC application including: A12. Section 10.07 of the 2017 IQ Agreement contains the requirements for an IQ requiring the abandonment of the periodic verification requirement. In section 10.07 (C) of the qi agreement, the IQ must provide the information described in Schedule I when applying for a waiver. The general instructions in Schedule I stipulate that IQs that assume primary responsibility for the withholding of replacement interest payments must complete Part VI. However, to provide the required information in Part VI, a qi should conduct a periodic review.
This FAQ specifies that an IQ that assumes primary responsibility for the withholding of replacement interest payments and may waive the requirement for periodic verification is not required to complete Part VI of the schedule I certification.