Updates to withholding foreign partnership & withholding foreign trust agreements under Rev. Proc. 2014-47
On 8 August 2014, the IRS released Rev. Proc. 2014-47, which provides guidance for entering into withholding foreign partnership (WP) and withholding foreign trust (WT) agreements applicable to foreign partnerships and trusts that wish to enter into a WP or WT withholding agreement with the IRS under Reg. section 1.1441-5(c)(2)(ii) and (e)(5)(iv).
The objective of the WP agreement and/or WT agreement is to allow a foreign partnership or foreign trust to become a WP or WT and to assume the withholding and reporting obligations under chapter 3 and chapter 4 (FATCA) for payments of U.S. source income (such as interest, dividends, and royalties) made to its partners, beneficiaries, or owners, and in some cases, persons holding interests in the WP or WT through one or more foreign intermediaries or flow-through entities.
Rev. Proc. 2014-47 (PDF, 307 KB) provides:
- Background on the withholding and reporting requirements of chapters 3 and 4 of the Code
- Changes to the existing WP agreement and WT agreement published in Rev. Proc. 2003-64
- Application procedures for becoming a withholding foreign partnership or withholding foreign trust and for renewing a WP agreement or WT agreement
- Revised text of the WP agreement and the WT agreement
The WP and WT agreements provided in Rev. Proc. 2014-47 apply to WP and WT agreements with effective dates on or after 30 June 2014.
The IRS has also posted a new “frequently asked question” (FAQ) with regards to the application of the pre-existing obligation election to intermediaries and flow-through entities.
According to an IRS transmittal message, the new FAQ is posted under the topic “General Compliance” with this notation: “Date posted: 8/8/2014.”
Read: FATCA - FAQs General
Text of Model 1 IGA with Czech Republic
On 7 August 2014, the Treasury Department updated the list of countries that have signed agreements for implementing the FATCA regime by posting text of the intergovernmental agreement (IGA) as signed by representatives of the United States and the Czech Republic.
The 51-page agreement with the Czech Republic is listed as following the Model 1 IGA under the FATCA regime, and is dated 4 August 2014. This is the first update to the FATCA country-list by Treasury since early July 2014.
Read text of the FATCA agreement (PDF 406 KB) with the Czech Republic.
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