The U.S. Qualified Intermediary (QI) regime was introduced by the Internal Revenue Services (IRS) and became effective as from 1 January 2001. On 27 June 2014, the IRS released the Rev. Proc. 2014-39 with the revised QI withholding agreement. The revision was necessary to reflect the FATCA Regime.
The first purpose of the regulations is to identify US persons investing in US securities through foreign intermediaries. Another purposes is to ensure a correct application of the double taxation treaties concluded by the United States, and more generally, of the US withholding tax to be applied to foreign persons.
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A Qualified Intermediary is a foreign financial institution such as a bank, broker or asset manager, which pays US source income to its customers and has signed a Qualified Intermediary Agreement (QIA) with the US tax authorities, the IRS. QIs are subject to a set of responsibilities, including.
- Identification of customers,
- Withholding, and
- Annual Reporting
Our QI experience
- KPMG is a market leader in performing QI Audits worldwide (42% market share according to IRS sources). Please note that under the new QIA, the external audit procedures have been replaced with an internal compliance program and a periodic certification by a compliance officer.
- KPMG Luxembourg authored the QI handbook for the ABBL which served as a basis for the Luxembourg implementation of the QI regulations
- We assist on a daily basis an important number of banks regarding all kinds of QI issues (documentation, withholding, reporting, reconciliation, contact with the IRS, ...)
- KPMG Luxembourg provides to software vendors technical QI reporting solutions
- KPMG informs interested parties about any news with regard to QI regulations via the “QI update” (Newsletter published whenever news relating to QI are coming up)
- KPMG Luxembourg is represented at the ABBL QI working group
© 2023 KPMG Luxembourg, Société anonyme, with registered office at 39, Avenue John F. Kennedy, L-1855 Luxembourg, registered with RCS Luxembourg under number B149133, and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.
For more detail about the structure of the KPMG global organization please visit https://kpmg.com/governance.
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