Deadline to apply for Qualified Intermediary status rapidly approaches
TAX ALERT |
The deadline for companies to apply for Qualified Intermediary (QI) (including Qualified Derivatives Dealers), Withholding Foreign Partnership (WP) and Withholding Foreign Trust (WT) status for 2018 rapidly approaches. Applications must be filed with the Internal Revenue Service (IRS) on or before November 16, 2018. The IRS has recently published an announcement reminding applicants of the deadline, which likely means that they do not intend to extend it.
Generally, in an attempt to simplify U.S. tax withholding and reporting obligations for certain payments made to companies acting as foreign intermediaries on behalf of investors or accountholders, these companies may enter into a QI agreement with the IRS to assume certain reporting and withholding responsibilities with respect to these payments. Similarly, WPs and WTs may also enter into agreements with the IRS in an effort to simplify the withholding and reporting requirements for payments made to its partners, beneficiaries or owners.
In order to enter an agreement, applicants must submit their applications through the Qualified Intermediary Application Account Management System (QAAMS). In a recent statement, the IRS noted that all applicants that desire to have an agreement in effect in 2018 must submit their applications not later than November 16 in order to provide the IRS with sufficient time to process the applications by year end. Moreover, the statement emphasized that–if necessary–applicants must have already obtained a Global Intermediary Identification Number (GIIN) prior to submitting their applications.
With the deadline closing in, QIs, WPs, and WTs that wish to have an agreement in effect for 2018 should ensure that they have the necessary information (such as, potentially, a GIIN), and must submit their applications on the QAAMS portal as soon as possible to avoid potential delays.