Regulations Relating to Information Reporting by Foreign Financial Institutions and Withholding on Certain Payments to Foreign Financial Institutions and Other Foreign Entities; Correction, 37175-37181 [2014-15465]
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Federal Register / Vol. 79, No. 126 / Tuesday, July 1, 2014 / Rules and Regulations
under Executive Order 12866; (2) is not
a ‘‘significant rule’’ under DOT
Regulatory Policies and Procedures (44
FR 11034; February 26, 1979); and (3)
does not warrant preparation of a
regulatory evaluation as the anticipated
impact is so minimal. Since this is a
routine matter that only affects air traffic
procedures and air navigation, it is
certified that this rule, when
promulgated, does not have a significant
economic impact on a substantial
number of small entities under the
criteria of the Regulatory Flexibility Act.
The FAA’s authority to issue rules
regarding aviation safety is found in
Title 49 of the U.S. Code. Subtitle 1,
Section 106, describes the authority of
the FAA Administrator. Subtitle VII,
Aviation Programs, describes in more
detail the scope of the agency’s
authority. This rulemaking is
promulgated under the authority
described in Subtitle VII, Part A,
Subpart I, Section 40103. Under that
section, the FAA is charged with
prescribing regulations to assign the use
of airspace necessary to ensure the
safety of aircraft and the efficient use of
airspace. This regulation is within the
scope of that authority as it establishes
controlled airspace at Memphis
Memorial Airport, Memphis, MO.
§ 71.1
Environmental Review
21 CFR Part 514
DEPARTMENT OF THE TREASURY
The FAA has determined that this
action qualifies for categorical exclusion
under the National Environmental
Policy Act in accordance with FAA
Order 1050.1E, ‘‘Environmental
Impacts: Policies and Procedures,’’
paragraph 311a. This airspace action is
not expected to cause any potentially
significant environmental impacts, and
no extraordinary circumstances exist
that warrant preparation of an
environmental assessment.
[Docket No. FDA–2014–N–0108]
Internal Revenue Service
New Animal Drug Applications;
Confidentiality of Data and Information
in a New Animal Drug Application File;
Confirmation of Effective Date
26 CFR Part 1
List of Subjects in 14 CFR Part 71
Airspace, Incorporation by reference,
Navigation (Air)
Adoption of the Amendment
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In consideration of the foregoing, the
Federal Aviation Administration
amends 14 CFR Part 71 as follows:
PART 71—DESIGNATION OF CLASS A,
B, C, D, AND E AIRSPACE AREAS; AIR
TRAFFIC SERVICE ROUTES; AND
REPORTING POINTS
1. The authority citation for 14 CFR
Part 71 continues to read as follows:
■
Authority: 49 U.S.C. 106(g), 40103, 40113,
40120; E. O. 10854, 24 FR 9565, 3 CFR, 1959–
1963 Comp., p. 389.
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[Amended]
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2. The incorporation by reference in
14 CFR Part 71.1 of the Federal Aviation
Administration Order 7400.9X, Airspace
Designations and Reporting Points,
dated August 7, 2013, and effective
September 15, 2013, is amended as
follows:
■
Paragraph 6005 Class E airspace areas
extending upward from 700 feet or more
above the surface.
*
*
*
*
*
ACE MO E5 Memphis, MO [New]
Memphis Memorial Airport, MO
(Lat. 40°26′50″ N., long. 92°13′37″ W.)
That airspace extending upward from 700
feet above the surface within a 6.3-mile
radius of Memphis Memorial Airport.
Issued in Fort Worth, Texas, on June 18,
2014.
Kent M. Wheeler,
Manager, Operations Support Group, ATO
Central Service Center.
[FR Doc. 2014–15180 Filed 6–30–14; 8:45 am]
BILLING CODE 4910–14–P
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Food and Drug Administration
AGENCY:
Food and Drug Administration,
HHS.
Direct final rule; confirmation of
effective date.
ACTION:
The Food and Drug
Administration (FDA) is confirming the
effective date of July 30, 2014, for the
final rule that appeared in the Federal
Register of March 17, 2014. The direct
final rule amends the regulation
regarding the confidentiality of data and
information in and about new animal
drug application files to change when
certain approval-related information
will be disclosed by the Agency. This
change ensures that the Agency is able
to update its list of approved new
animal drug products within the
statutory timeframe. It also permits
more timely public disclosure of
approval-related information, increasing
the transparency of FDA
decisionmaking in the approval of new
animal drugs. This document confirms
the effective date of the direct final rule.
SUMMARY:
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Effective date of final rule
published in the Federal Register of
March 17, 2014 (79 FR 14609)
confirmed: July 30, 2014.
FOR FURTHER INFORMATION CONTACT:
Scott Fontana, Center for Veterinary
Medicine (HFV–100), Food and Drug
Administration, 7500 Standish Pl.,
Rockville, MD 20855, 240–402–0656.
SUPPLEMENTARY INFORMATION: In the
Federal Register of March 17, 2014 (79
FR 14609), FDA solicited comments
concerning the direct final rule for a 75day period ending June 2, 2014. FDA
stated that the effective date of the
direct final rule would be on July 30,
2014, 30 days after the end of the
comment period, unless any significant
adverse comment was submitted to FDA
during the comment period. FDA did
not receive any significant adverse
comments.
DATES:
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Authority: 21 U.S.C. 321, 331, 351, 352,
356a, 360b, 371, 379e, 381.
Accordingly, the amendments issued
thereby are effective.
Dated: June 24, 2014.
Leslie Kux,
Assistant Commissioner for Policy.
[FR Doc. 2014–15209 Filed 6–30–14; 8:45 am]
BILLING CODE 4164–01–P
[TD 9657]
RIN 1545–BL73
Regulations Relating to Information
Reporting by Foreign Financial
Institutions and Withholding on
Certain Payments to Foreign Financial
Institutions and Other Foreign Entities;
Correction
Internal Revenue Service (IRS),
Treasury.
ACTION: Correcting amendments.
AGENCY:
This document contains
corrections to final and temporary
regulations (TD 9657), which were
published in the Federal Register on
Thursday, March 6, 2014 (79 FR 12812).
The regulations relate to information
reporting by foreign financial
institutions (FFIs) with respect to U.S.
accounts and withholding on certain
payments to FFIs and other foreign
entities.
DATES: Effective Date: These corrections
are effective on July 1, 2014.
Applicability Date: These corrections
are applicable on March 6, 2014.
SUMMARY:
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Federal Register / Vol. 79, No. 126 / Tuesday, July 1, 2014 / Rules and Regulations
FOR FURTHER INFORMATION CONTACT:
Nancy Lee, (202) 317–6942 (not a tollfree call).
SUPPLEMENTARY INFORMATION:
Background
This document contains amendments
to the Income Tax Regulations (26 CFR
part 1) under sections 1471 through
1474 of the Internal Revenue Code.
Sections 1471 through 1474 were added
to the Code, as Chapter 4 of Subtitle A,
by the Hiring Incentives to Restore
Employment Act of 2010 (Pub. L. 111–
147, 124 Stat. 71).The final and
temporary regulations that are the
subject of these corrections are
§§ 1.1471–1T, 1.1471–2, 1.1471–2T,
1.1471–3T, 1.1471–4, 1.1471–4T,
1.1471–5T, 1.1471–6T, 1.1472–1T,
1.1473–1T, and 1.1474–1T. These
regulations affect persons making
certain U.S.-related payments to FFIs
and other foreign entities, and affect
payments by FFIs to other persons.
Need for Correction
As published, the final and temporary
regulations under chapter 4 contain a
number of items that need to be
corrected or clarified. Several citations
and cross references are corrected.
These correcting amendments also
include the addition, deletion, or
modification of temporary regulatory
language to clarify the relevant
provisions to meet their intended
purposes. The addition of final
regulatory language only includes
language that was inadvertently
removed in the final and temporary
regulations.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and
recordkeeping requirements.
Correction of Publication
Accordingly, 26 CFR part 1 is
corrected by making the following
correcting amendments:
PART 1—INCOME TAXES
Paragraph 1. The authority citation
for part 1 continues to read in part as
follows:
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■
Authority: 26 U.S.C. 7805 * * *
Section 1.1471–1 is also issued under 26
U.S.C. 1471
Section 1.1471–2 is also issued under 26
U.S.C. 1471
Section 1.1471–3 is also issued under 26
U.S.C. 1471
Section 1.1471–4 is also issued under 26
U.S.C. 1471
Section 1.1471–5 is also issued under 26
U.S.C. 1471
Section 1.1471–6 is also issued under 26
U.S.C. 1471
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Section 1.1472–1 is also issued under 26
U.S.C. 1472
Section 1.1473–1 is also issued under 26
U.S.C. 1473
Section 1.1474–1 is also issued under 26
U.S.C. 1474
Par. 2. Section 1.1471–1T is amended
by revising paragraphs (b)(20) and
(b)(98).
The revisions read as follows:
■
§ 1.1471–1T Scope of chapter 4 and
definitions (temporary).
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*
*
*
*
(b) * * *
(20) Chapter 4 withholding rate pool.
The term chapter 4 withholding rate
pool means a pool of payees that are
nonparticipating FFIs provided on a
chapter 4 withholding statement (as
described in § 1.1471–3(c)(3)(iii)(B)(3))
to which a withholdable payment is
allocated. The term chapter 4
withholding rate pool also means a pool
provided on an FFI withholding
statement (as described in § 1.1471–
3(c)(3)(iii)(B)(2)) to which a
withholdable payment is allocated to—
(i) A pool of payees consisting of each
class of recalcitrant account holders
described in § 1.1471–4(d)(6) (or with
respect to an FFI that is a QI, a single
pool of recalcitrant account holders
without the need to subdivide into each
class of recalcitrant account holders
described in § 1.1471–4(d)(6)), including
a separate pool of account holders to
which the escrow procedures for
dormant accounts apply; or
(ii) A pool of payees that are U.S.
persons as described in § 1.1471–
3(c)(3)(iii)(B)(2).
*
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*
*
*
(98) Payor. The term payor has the
meaning set forth in §§ 31.3406(a)–2 and
1.6049–4(a)(2) and generally includes a
withholding agent.
*
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*
*
*
Par. 3. Section 1.1471–2 is amended
by revising paragraph (a)(2)(ii) and
adding paragraphs (a)(2)(iii)(A)(1)
through (4) and (a)(4)(ii)(B)(1) through
(2).
The revisions and additions read as
follows:
§ 1.1471–2 Requirement to deduct and
withhold tax on withholdable payments to
certain FFIs.
(a) * * *
(2) * * *
(ii) [Reserved]. For further guidance,
see § 1.1471–2T(a)(2)(ii).
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*
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(iii) * * *
(A) * * *
(1) The withholding agent is a
participating FFI, reporting Model 1 FFI,
QI, or a U.S. withholding agent;
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(2) The person who receives the
payment is a participating FFI or
registered deemed-compliant FFI that
acts as a QI with respect to the payment;
(3) The person who receives the
payment provides the withholding
agent, at or before the time of the
payment, with a valid intermediary
withholding certificate with respect to
the payment that notifies the
withholding agent that it has elected to
be withheld upon, certifies that it is not
assuming primary withholding
responsibility under chapter 3, and
designates whether such election is
made for all accounts held with the
withholding agent or for the specific
accounts identified on the withholding
certificate; and
(4) The intermediary withholding
certificate is accompanied by a
withholding statement described in
§ 1.1471–3(c)(3)(iii)(B).
*
*
*
*
*
(4) * * *
(ii) * * *
(B) * * *
(1) The withholding agent has
available as part of its electronically
searchable information a designation for
the payee as a QI or NQI; or
(2) For an account maintained in the
United States, the payee is presumed to
be a foreign entity under § 1.1471–3(f) or
is documented as a foreign entity for
purposes of chapter 3 or 61, and the
withholding agent has recorded as part
of its electronically searchable
information one of the following North
American Industry Classification
System or Standard Industrial
Classification codes indicating that the
payee is a financial institution:
(i) Commercial Banking (NAICS
522110).
(ii) Savings Institutions (NAICS
522120).
(iii) Credit Unions (NAICS 522130).
(iv) Other Depositary Credit
Intermediation (NAICS 522190).
(v) Investment Banking and Securities
Dealing (NAICS 523110).
(vi) Securities Brokerage (NAICS
523120).
(vii) Commodity Contracts Dealing
(NAICS 523130).
(viii) Commodity Contracts Brokerage
(NAICS 523140).
(ix) Miscellaneous Financial
Investment Activities (NAICS 523999).
(x) Open-End Investment Funds
(NAICS 525910).
(xi) Commercial Banks, NEC (SIC
6029).
(xii) Branches and Agencies of
Foreign Banks (branches) (SIC 6081).
(xiii) Foreign Trade and International
Banking Institutions (SIC 6082).
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(xiv) Asset-Backed Securities (SIC
6189).
(xv) Security & Commodity Brokers,
Dealers, Exchanges & Services (SIC
6200).
(xvi) Security Brokers, Dealers &
Flotation Companies (SIC 6211).
(xvii) Commodity Contracts Brokers &
Dealers (SIC 6221).
(xviii) Unit Investment Trusts, FaceAmount Certificate Offices, and ClosedEnd Management Investment Offices
(SIC 6726).
*
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*
Par. 4. Section 1.1471–2T is amended
by revising paragraph (a)(2)(i) to read as
follows:
■
§ 1.1471–2T Requirement to deduct and
withhold tax on withholdable payments to
certain FFIs (temporary).
(a) * * *
(2) * * *
(i) Requirement to withhold on
payments of U.S. source FDAP income
to participating FFIs and deemedcompliant FFIs that are NQIs, NWPs, or
NWTs. A withholding agent that, after
June 30, 2014, makes a payment of U.S.
source FDAP income to a participating
FFI or deemed-compliant FFI that is an
NQI receiving the payment as an
intermediary, or a NWP or NWT, must
withhold 30 percent of the payment
unless the withholding is reduced under
this paragraph (a)(2)(i). A withholding
agent is not required to withhold on a
payment, or portion of a payment, that
it can reliably associate, in the manner
described in § 1.1471–3(c)(2), with a
valid intermediary or flow-through
withholding certificate that meets the
requirements of § 1.1471–3(d)(4) and a
withholding statement that meets the
requirements of § 1.1471–3(c)(3)(iii)(B)
and that allocates the payment or
portion of the payment to payees for
which no withholding is required under
chapter 4. Further, a withholding agent
is not required to withhold on a
payment that it can reliably associate
with documentation indicating that the
payee is a U.S. branch treated as a U.S.
person (as defined in § 1.1471–
1(b)(135)).
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*
Par. 5. Section 1.1471–3T is amended
by:
■ 1. Revising paragraphs (a)(3)(vi),
(c)(3)(iii)(A)(5), (c)(3)(iii)(B)(1), (c)(6)(iv),
(d)(4)(i), (d)(11)(xii)(B), (e)(4)(ii)(A),
(e)(4)(iv)(A), and (e)(4)(vii)(B).
■ 2. Adding paragraphs (e)(4)(vii)(C)
and (D).
The revisions and additions read as
follows:
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■
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§ 1.1471–3T Identification of payee
(temporary).
(a) * * *
(3) * * *
(vi) U.S. branch of certain foreign
banks or foreign insurance companies.
A withholdable payment to a U.S.
branch of either a participating FFI,
registered deemed-compliant FFI, or
NFFE is a payment to a U.S. person if
the U.S. branch is treated as a U.S.
person under § 1.1441–1(b)(2)(iv)(A). In
such case, the U.S. branch is treated as
the payee. A U.S. branch treated as a
U.S. person (as defined in § 1.1471–
1(b)(135)), however, is not treated as a
U.S. person for purposes of the
withholding certificate it may provide to
a withholding agent for purposes of
chapter 4. Accordingly, a U.S. branch
treated as a U.S. person must furnish a
withholding certificate on a Form W–8
to certify its chapter 4 status (and not a
Form W–9, ‘‘Request for Taxpayer
Identification Number and
Certification’’). See also paragraph (f)(6)
of this section for the rules under which
a withholding agent can presume a
payment constitutes income that is
effectively connected with a U.S. trade
or business. A U.S. branch treated as a
U.S. person may not make an election
to be withheld upon, as described in
section 1471(b)(3) and § 1.1471–
2(a)(2)(iii), for purposes of chapter 4.
See § 1.1471–4(c)(2)(v) for the rule
requiring a U.S. branch that has elected
to be treated as a U.S. person to apply
the due diligence rules applicable to a
U.S. withholding agent in lieu of those
otherwise applicable to a participating
FFI. See also § 1.1474–1(i)(1) and (2) for
the requirement of a U.S. branch to
report information regarding certain
U.S. owners of owner documented FFIs
and passive NFFEs. See § 1.1471–4(d)
for rules for when a U.S. branch reports
as a U.S. person.
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*
(c) * * *
(3) * * *
(iii) * * *
(A) * * *
(5) A GIIN, in the case of a
participating FFI or a registered
deemed-compliant FFI (including a U.S.
branch of such an entity, whether or not
such branch is treated as a U.S. person,
and including a QI, WP, or WT that is
a participating FFI or registered
deemed-compliant FFI), and an EIN in
the case of a QI, WP, or WT.
Additionally, if a branch (other than a
U.S. branch) of a participating FFI or
registered deemed-compliant FFI
outside of its country of residence acts
as an intermediary, a GIIN of such
branch must be provided on the
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withholding certificate. In the case of a
U.S. branch, the GIIN provided must be
the GIIN assigned to the participating
FFI or registered deemed-compliant FFI.
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(B) * * *
(1) In general. A withholding
statement forms an integral part of the
withholding certificate and the penalties
of perjury statement provided on the
withholding certificate applies to the
withholding statement as well. The
withholding statement may be provided
in any manner, and in any form, to
which the person submitting the form
and the withholding agent mutually
agree, including electronically. A
withholding statement may be provided
electronically only if it meets the
requirements of § 1.1441–1(e)(3)(iv)(B).
The withholding statement must be
updated as often as necessary for the
withholding agent to meet its reporting
and withholding obligations under
chapter 4. A withholding agent will be
liable for tax, interest, and penalties
under § 1.1474–1(a) to the extent it does
not follow the presumption rules of
paragraph (f) of this section for any
payment, or portion thereof, for which
a withholding statement is required and
the withholding agent does not have a
valid withholding statement prior to
making a payment. A withholding agent
that is making a withholdable payment
for which a withholding statement is
also required for purposes of chapter 3
may only rely upon the withholding
statement if, in addition to providing
the information required by paragraph
(c)(3)(iii)(B) of this section, the
withholding statement also includes all
of the information required for purposes
of chapter 3 and specifies the chapter 4
status of each payee or pool of payees
identified on the withholding statement
for purposes of chapter 3.
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(6) * * *
(iv) Electronic transmission of
withholding certificate, written
statement, and documentary evidence.
A withholding agent may accept a
withholding certificate (including an
acceptable substitute form), a written
statement, or other such form as the IRS
may prescribe, electronically in
accordance with the requirements set
forth in § 1.1441–1(e)(4)(iv).
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(d) * * *
(4) * * *
(i) In general. Except as otherwise
provided in paragraphs (d)(4)(ii)
through (iv) or paragraphs (e)(3)(i) and
(ii) of this section, a withholding agent
may treat a payee as a participating FFI
or registered deemed-compliant FFI
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only if the withholding agent has a
withholding certificate identifying the
payee as a participating FFI, registered
deemed-compliant FFI, or branch
thereof (including an entity that is
disregarded as an entity separate from
the FFI), and the withholding certificate
contains a GIIN for the payee that is
verified against the published IRS FFI
list in the manner described in
paragraph (e)(3) of this section
(indicating when a withholding agent
may rely upon a GIIN). For payments
made prior to January 1, 2016, a
registered deemed-compliant FFI that is
a sponsored FFI must provide the GIIN
of its sponsoring entity on the
withholding certificate if the sponsored
FFI has not obtained a GIIN, which the
withholding agent has verified against
the published IRS FFI list in the manner
described in paragraph (e)(3) of this
section (substituting the term sponsored
FFI for the term sponsored direct
reporting NFFE). See paragraph
(c)(3)(iii) of this section for additional
requirements that apply to a valid
withholding certificate provided by a
participating FFI or registered deemedcompliant FFI that is a flow-through
entity or is acting as an intermediary
with respect to the payment, or by a
U.S. branch of a participating FFI or
registered deemed-compliant FFI
(including a U.S. entity that is
disregarded as an entity separate from
the FFI).
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(11) * * *
(xii) * * *
(B) Offshore obligations. A
participating FFI that makes a payment
with respect to an offshore obligation
may treat the payment as made to an
excepted inter-affiliate FFI described in
§ 1.1471–5(e)(5)(iv) if the participating
FFI obtains a written statement in which
the payee certifies that it is a foreign
entity operating as an excepted interaffiliate FFI and that it is a member of
an expanded affiliated group of
participating FFIs or registered deemedcompliant FFIs. In the case of a payment
of U.S. source FDAP income, the written
statement must also indicate that the
payee is the beneficial owner and must
be supplemented with documentary
evidence supporting the payee’s claim
of foreign status (as described in
paragraph (c)(5)(i) of this section).
*
*
*
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*
(e) * * *
(4) * * *
(ii) * * *
(A) In general. A withholding agent
has reason to know that a withholding
certificate provided by a person is
unreliable or incorrect if the
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withholding certificate is incomplete
with respect to any item on the
certificate that is relevant to the claims
made by the person, the withholding
certificate contains any information that
is inconsistent with the person’s claim,
the withholding agent has other account
information that is inconsistent with the
person’s claim, or the withholding
certificate lacks information necessary
to establish entitlement to an exemption
from withholding for chapter 4
purposes. Except as otherwise provided
in this paragraph (e)(4)(ii)(A), a
withholding agent that is a financial
institution or other entity described in
§ 1.1441–7(b)(3) and that has obtained a
withholding certificate to reliably
associate a payment to a foreign person
under paragraph (c) of this section has
reason to know that the person’s claim
of foreign status is unreliable or
incorrect only if there are U.S. indicia,
as described in § 1.1441–7(b)(5),
associated with the person and for
which appropriate documentation
sufficient to cure the U.S. indicia has
not been obtained in accordance with
§ 1.1441–7(b) within 90 days of when
the U.S. indicia was first identified by
the withholding agent. See also
§ 1.1441–1(e)(4)(ii)(D) for requirements
that apply when a change in
circumstances occurs for purposes of
chapter 3 and the related grace period
allowed under § 1.1441–1(b)(3)(iv). A
withholding agent that relies on an
agent to review and maintain a
withholding certificate is considered to
know or have reason to know the facts
within the knowledge of the agent.
*
*
*
*
*
(iv) * * *
(A) In general. A withholding agent
may not treat documentary evidence
provided by a person as valid if the
documentary evidence does not
reasonably establish the identity of the
person presenting the documentary
evidence. For example, documentary
evidence is not valid if it is provided in
person by an individual and the
photograph or signature on the
documentary evidence does not match
the appearance or signature of the
person presenting the document. A
withholding agent may not treat
documentary evidence as valid if the
documentary evidence contains
information that is inconsistent with the
person’s claim as to its chapter 4 status,
the withholding agent has other account
information that is inconsistent with the
person’s chapter 4 status, or the
documentary evidence lacks
information necessary to establish the
person’s chapter 4 status. Additionally,
a withholding agent that is a financial
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institution under § 1.1471–5(e), or other
entity as described in § 1.1441–7(b)(3)
that has obtained documentary evidence
to reliably associate a payment to a
foreign person under paragraph (c) of
this section has reason to know that the
person’s claim of foreign status is
unreliable or incorrect only if there are
U.S. indicia, as described in § 1.1441–
7(b)(8), associated with the person and
appropriate documentation sufficient to
cure the U.S. indicia has not been
obtained in accordance with § 1.1441–
7(b) within 90 days of when the U.S.
indicia was first identified by the
withholding agent. See also § 1.1441–
1(e)(4)(ii)(D) for requirements when a
change in circumstances occurs for
purposes of chapter 3 and the related
grace period allowed under § 1.1441–
1(b)(3)(iv).
*
*
*
*
*
(vii) * * *
(B) Reason to know there are U.S.
indicia associated with preexisting
obligations. With respect to a
preexisting obligation, a withholding
agent may apply the limits on reason to
know described in § 1.1441–7(b)(3)(ii)
for a person that the withholding agent
has previously documented for
purposes of chapters 3 or 61. A
withholding agent that applies the
limits on reason to know described in
§ 1.1441–7(b)(3)(ii) must, however,
review for U.S. indicia any additional
documentation upon which the
withholding agent is relying to
determine the chapter 4 status of the
person, if any.
(C) and (D) [Reserved]. For further
guidance, see § 1.1471–3(e)(4)(vii)(C)
and (D).
*
*
*
*
*
■ Par. 6. Section 1.1471–4 is amended
by revising paragraphs (d)(6)(vi) and
(vii) and adding paragraphs
(d)(7)(ii)(A)(1) through (3) to read as
follows:
§ 1.1471–4
FFI agreement.
*
*
*
*
*
(d) * * *
(6) * * *
(vi) [Reserved]. For further guidance,
see § 1.1471–4T(d)(6)(vi).
(vii) Record retention requirements. A
participating FFI that produces, in the
ordinary course of its business, account
statements that summarize the activity
(including withdrawals, transfers, and
closures) of an account held by a
recalcitrant account holder described in
paragraph (d)(6)(i)(B) of this section for
any calendar year in which the account
was required to be reported under
paragraph (d)(6) of this section must
retain a record of such account
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01JYR1
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statements. Such record must be
retained for the longer of six years or the
retention period under the FFI’s normal
business procedures. A participating FFI
may be required to extend the six year
retention period if the IRS requests such
an extension prior to the expiration of
the six year period.
*
*
*
*
*
(7) * * *
(ii) * * *
(A) * * *
(1) The name, address, and TIN of
each specified U.S. person who is an
account holder and, in the case of any
account holder that is an NFFE that is
a U.S. owned foreign entity or that is an
owner-documented FFI, the name of
such entity and the name, address, and
TIN of each substantial U.S. owner of
such NFFE or, in the case of an ownerdocumented FFI, of each specified U.S.
person identified in § 1.1471–
3(d)(6)(iv)(A)(1) and (2);
(2) The account balance or value as of
the end of the relevant calendar year, or
if the account was closed after the
effective date of the FFI agreement, the
amount or value withdrawn or
transferred from the account in
connection with closure; and
(3) The account number of the
account.
*
*
*
*
*
■ Par. 7. Section 1.1471–4T is amended
by revising paragraphs (b)(3)(iii),
(d)(2)(ii)(F), (d)(2)(iii)(B) introductory
text, and (d)(7)(iv)(B) to read as follows:
§ 1.1471–4T
FFI agreement (temporary).
pmangrum on DSK3VPTVN1PROD with RULES
*
*
*
*
*
(b) * * *
(3) * * *
(iii) Election to withhold under
section 3406. A participating FFI may
elect to satisfy its withholding
obligation under paragraph (b)(1) of this
section with respect to recalcitrant
account holders that are also U.S. nonexempt recipients subject to backup
withholding under section 3406
receiving withholdable payments, to the
extent that the payments also constitute
reportable payments, by applying
withholding under section 3406 at the
backup withholding rate to such
withholdable payments. A participating
FFI may make the election described in
this paragraph only if it complies with
the information reporting rules under
chapter 61 with respect to payments to
which backup withholding applies.
Nothing in this paragraph relieves a
participating FFI of its requirement to
backup withhold under section 3406
with respect to reportable payments that
are not also withholdable payments. See
§ 1.1474–6(f) for the general rule that
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15:01 Jun 30, 2014
Jkt 232001
satisfying withholding requirements
under chapter 4 will satisfy backup
withholding requirements under section
3406 for a payment that is both a
withholdable payment and a reportable
payment.
*
*
*
*
*
(d) * * *
(2) * * *
(ii) * * *
(F) Reporting by participating FFIs
(including QIs, WPs, WTs, and certain
U.S. branches not treated as U.S.
persons) for accounts of
nonparticipating FFIs (transitional).
Except as otherwise provided in the
instructions to Form 8966, ‘‘FATCA
Report,’’ if a participating FFI (including
a QI, WP, WT, or U.S. branch of a
participating FFI or registered deemedcompliant FFI that is not treated as a
U.S. person) maintains an account for a
nonparticipating FFI (including a
limited branch and limited FFI treated
as a nonparticipating FFI), the
participating FFI must report on Form
8966 the name and address of the
nonparticipating FFI, and the aggregate
amount of foreign source payments, as
described in paragraph (d)(4)(iv) of this
section, paid to or with respect to each
such account (foreign reportable
amount) for each of the calendar years
2015 and 2016. If, however, the
participating FFI is prohibited under
domestic law from reporting on a
specific payee basis without consent
from the nonparticipating FFI account
holder and the participating FFI has not
been able to obtain such consent, the
participating FFI may instead report the
aggregate number of accounts held by
such non-consenting nonparticipating
FFIs and the aggregate amount of foreign
reportable amounts paid with respect to
such accounts, as described in
paragraph (d)(4)(iv) of this section,
during the calendar year. A
participating FFI may, in lieu of
reporting only foreign reportable
amounts, report all income, gross
proceeds, and redemptions (irrespective
of the source) paid to the
nonparticipating FFI’s account by the
participating FFI during the calendar
year. In addition, the participating FFI
must retain the account statements
related to such nonparticipating FFI
accounts. See paragraphs (d)(6)(iv), (v),
(vi) and (vii) of this section for rules
relating to reporting on recalcitrant
account holders. Form 8966 shall be
filed electronically with the IRS on or
before March 31 of the year following
the end of the calendar year to which
the form relates.
(iii) * * *
(B) Special reporting rules for U.S.
branches treated as U.S. persons. A U.S.
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Sfmt 4700
37179
branch treated as a U.S. person (as
defined in § 1.1471–1(b)(135)) shall be
treated as having satisfied the reporting
requirements described in paragraph
(d)(2)(i) of this section if it reports
under—
*
*
*
*
*
(7) * * *
(iv) * * *
(B) Special determination date and
timing for reporting with respect to the
2014 calendar year. With respect to the
2014 calendar year, a participating FFI
must report under paragraph (d)(3) or
(5) of this section on all accounts that
are identified and documented under
paragraph (c) of this section as U.S.
accounts or accounts held by ownerdocumented FFIs as of December 31,
2014, (or as of the date an account is
closed if the account is closed prior to
December 31, 2014) if such account was
outstanding on July 1, 2014. Reporting
for the 2014 calendar year shall be filed
with the IRS on or before March 31,
2015. However, a U.S. payor (including
a U.S. branch treated as a U.S. person
(as defined in § 1.1471–1(b)(135))) that
reports in accordance with paragraph
(d)(2)(iii) of this section may report all
or a portion of its U.S. accounts and
accounts held by owner-documented
FFIs in accordance with the dates
otherwise applicable to reporting under
chapter 61 with respect to the 2014
calendar year.
*
*
*
*
*
Par. 8. Section 1.1471–5T is amended
by revising paragraph (f)(2)(iii)
introductory text and the heading of
paragraph (i), removing paragraph (i)
introductory text, and revising
paragraph (i)(1) to read as follows:
■
§ 1.1471–5T Definitions applicable to
section 1471 (temporary).
*
*
*
*
*
(f) * * *
(2) * * *
(iii) Sponsored, closely held
investment vehicles. Subject to the
provisions of paragraph (f)(2)(iii)(E) of
this section, an FFI is described in this
paragraph (f)(2)(iii) if it meets the
requirements described in paragraphs
(f)(2)(iii)(A) through (D) of this section.
*
*
*
*
*
(i) Expanded affiliated group—(1)
Scope of paragraph. This paragraph (i)
defines the term expanded affiliated
group for purposes of chapter 4. For the
requirements of a participating FFI with
respect to members of its expanded
affiliated group that are FFIs, see
§ 1.1471–4(e).
*
*
*
*
*
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Par. 9. Section 1.1471–6T is amended
by revising paragraph (h)(2) to read as
follows:
■
§ 1.1471–6T Payments beneficially owned
by exempt beneficial owners (temporary).
*
*
*
*
*
(h) * * *
(2) Limitation. Paragraph (h)(1) of this
section will not apply to treat an exempt
beneficial owner as engaged in a
commercial financial activity if—
(i) The entity undertakes commercial
financial activity described in paragraph
(h)(1) of this section solely for or at the
direction of other exempt beneficial
owners and such commercial financial
activity is consistent with the purposes
of the entity;
(ii) The entity has no outstanding debt
that would be a financial account under
§ 1.1471–5(b)(1)(iii); and
(iii) The entity otherwise maintains
financial accounts only for exempt
beneficial owners, or, in the case of a
foreign central bank of issue as
described in paragraph (d), the entity
only maintains financial accounts that
are depository accounts for current or
former employees of the entity (and the
spouses and children of such
employees) or financial accounts for
exempt beneficial owners.
*
*
*
*
*
■ Par. 10. Section 1.1472–1T is
amended by revising paragraphs
(c)(1)(ii) and (c)(3)(iii) to read as follows:
§ 1.1472–1T Withholding on NFFEs
(temporary).
pmangrum on DSK3VPTVN1PROD with RULES
*
*
*
*
*
(c) * * *
(1) * * *
(ii) Certain affiliated entities related
to a publicly traded corporation. A
NFFE is described in this paragraph
(c)(1)(ii) if it is a corporation that is a
member of the same expanded affiliated
group (as defined in § 1.1471–5(i)) as a
corporation described in paragraph
(c)(1)(i) of this section (without regard to
whether such corporation is a NFFE).
*
*
*
*
*
(3) * * *
(iii) The NFFE must obtain a written
certification (contained on a
withholding certificate or in a written
statement) from each person that would
be treated as a substantial U.S. owner of
the NFFE if such person were a
specified U.S. person. Such written
certification must indicate whether the
person is a substantial U.S. owner of the
NFFE, and if so, the name, address and
TIN of the person. If the NFFE has
reason to know that such written
certification is unreliable or incorrect, it
must contact the person and request a
revised written certification. If no
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15:01 Jun 30, 2014
Jkt 232001
revised written certification is received,
the NFFE must treat the person as a
substantial U.S. owner and report on
Form 8966 the information required
under paragraph (c)(3)(ii) of this section.
The NFFE has reason to know that such
a written certification is unreliable or
incorrect if the certification is
inconsistent with information in the
NFFE’s possession, including
information that the NFFE provides to a
financial institution in order for the
financial institution to meet its AML or
other account identification due
diligence procedures with respect to the
NFFE’s account, information that is
publicly available, or U.S. indicia as
described in § 1.1441–7(b) for which
appropriate documentation sufficient to
cure the U.S. indicia in the manner set
forth in § 1.1441–7(b)(8) has not been
obtained.
*
*
*
*
*
■ Par. 11. Section 1.1473–1T is
amended by revising paragraphs
(a)(4)(vi) and (a)(4)(vii) to read as
follows:
§ 1.1473–1T Section 1473 definitions
(temporary).
(a) * * *
(4) * * *
(vi) Offshore payments of U.S. source
FDAP income prior to 2017
(transitional). A payment with respect
to an offshore obligation (as defined in
§ 1.1471–1(b)(88)) made prior to January
1, 2017, if such payment is U.S. source
FDAP income and made by a person
that is not acting as an intermediary or
as a WP or WT with respect to the
payment. Additionally, a payment with
respect to an account, obligation,
contract, or other instrument that is
issued or maintained by an entity other
than a financial institution and that
would be treated as an offshore
obligation under § 1.6049–5(c)(1)
(applied by substituting the term entity
for the term financial institution (as
defined in § 1.1471–5(e)) in each place
that it appears), made prior to January
1, 2017, if such payment is U.S. source
FDAP and made by a person that is not
acting as an intermediary or as a WP or
WT with respect to the payment is not
a withholdable payment under
paragraph (a)(1) of this section. The
exception for offshore payments of U.S.
source FDAP income provided in the
preceding sentences shall not apply,
however, in the case of a flow-through
entity that has a residual withholding
requirement with respect to its partners,
owners, or beneficiaries under § 1.1471–
2(a)(2)(ii), or in the case of payments
made with respect to debt or equity
issued by a U.S. person (excluding
interest payments made by a foreign
PO 00000
Frm 00026
Fmt 4700
Sfmt 4700
branch of a U.S. financial institution
with respect to depository accounts it
maintains). For purposes of this
paragraph (a)(4)(vi), an intermediary
includes a person that acts as a qualified
securities lender as defined for purposes
of chapter 3 and does not include a
person acting as an insurance broker
with respect to premiums.
(vii) Collateral arrangements prior to
2017 (transitional). A payment made
prior to January 1, 2017, by a secured
party, or to a secured party other than
a nonparticipating FFI, with respect to
collateral securing one or more
transactions under a collateral
arrangement, provided that only a
commercially reasonable amount of
collateral is held by the secured party
(or by a third party for the benefit of the
secured party) as part of the collateral
arrangement. For purposes of this
paragraph (a)(4)(vii), the term
transaction generally includes a debt
instrument, a derivative financial
instrument (including a notional
principal contract, future, forward, and
option), and any securities lending
transaction, sale-repurchase transaction,
margin loan, or substantially similar
transaction that is subject to a collateral
arrangement. Solely for purposes of this
paragraph (a)(4)(vii), a secured party
may provide documentation to the
withholding agent indicating that it is
the beneficial owner of a payment
described in this paragraph (a)(4)(vii),
and a withholding agent may rely on
such certification for purposes of its
requirements under § 1.1471–3(d) for
determining whether withholding under
chapter 4 applies.
*
*
*
*
*
■ Par. 12. Section 1.1474–1T is
amended by revising paragraphs
(d)(4)(iii)(C), (i)(1)(i), (i)(1)(ii),
(i)(1)(iii)(C), (i)(2) introductory text, and
(i)(2)(iii) to read as follows:
§ 1.1474–1T Liability for withheld tax and
withholding agent reporting (temporary).
*
*
*
*
*
(d) * * *
(4) * * *
(iii) * * *
(C) Reporting by a U.S. branch treated
as a U.S. person. A U.S. branch treated
as a U.S. person (as defined in § 1.1471–
1(b)(135)) must report amounts paid to
recipients on Forms 1042–S in the same
manner as a U.S. withholding agent
under paragraph (d)(4)(i) of this section.
*
*
*
*
*
(i) * * *
(1) * * *
(i) Beginning on July 1, 2014, if a
withholding agent (other than an FFI
reporting accounts held by owner-
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01JYR1
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Federal Register / Vol. 79, No. 126 / Tuesday, July 1, 2014 / Rules and Regulations
documented FFIs under § 1.1471–4(d))
makes a withholdable payment to an
entity account holder or payee of an
obligation and the withholding agent
treats the entity as an ownerdocumented FFI under § 1.1471–3(d)(6),
the withholding agent is required to
report for July 1 through December 31,
2014, with respect to each specified U.S.
person identified in § 1.1471–
3(d)(6)(iv)(A)(1) and (2) the information
described in paragraph (i)(1)(iii) of this
section.
(ii) Beginning in calendar year 2015,
if a withholding agent (other than an FFI
reporting accounts held by ownerdocumented FFIs under § 1.1471–4(d))
makes during a calendar year a
withholdable payment to an entity
account holder or payee of an obligation
and the withholding agent treats the
entity as an owner-documented FFI
under § 1.1471–3(d)(6), the withholding
agent is required to report for such
calendar year with respect to each
specified U.S. person identified in
§ 1.1471–3(d)(6)(iv)(A)(1) and (2) the
information described in paragraph
(i)(1)(iii) of this section.
(iii) * * *
(C) For the period from July 1 through
December 31, 2014, the total of all
withholdable payments made to the
owner-documented FFI and with
respect to payments made after the 2014
calendar year the total of all
withholdable payments made to the
owner-documented FFI during the
calendar year;
*
*
*
*
*
(2) Reporting by certain withholding
agents with respect to U.S. owned
foreign entities that are NFFEs.
Beginning on July 1, 2014, in addition
to the reporting on Form 1042–S
required under paragraph (d)(4)(i)(E) of
this section, a withholding agent (other
than an FFI reporting accounts held by
NFFEs under § 1.1471–4(d)) that makes
a withholdable payment to, and receives
information about any substantial U.S.
owners of, a NFFE that is not an
excepted NFFE as defined in § 1.1472–
1(c) shall file a report with the IRS for
the period from July 1 through
December 31, 2014, and in each
subsequent calendar year in which a
withholdable payment is made with
respect to any substantial U.S. owners of
such NFFE. Such report must be made
on Form 8966 (or such other form as the
IRS may prescribe) and filed on or
before March 31 of the calendar year
following the year in which the
withholdable payment was made. The
IRS shall grant an automatic 90-day
extension of time in which to file Form
8966. Form 8809, ‘‘Request for
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15:01 Jun 30, 2014
Jkt 232001
Extension of Time to File Information
Returns,’’ (or such other form as the IRS
may prescribe) must be used to request
such extension of time and must be filed
no later than the due date of Form 8966.
Under certain hardship conditions, the
IRS may grant an additional 90-day
extension. A request for extension due
to hardship must contain a statement of
the reasons for requesting the extension
and such other information as the form
or instructions may require. The report
must contain the following
information—
*
*
*
*
*
(iii) For the period from July 1, 2014
through December 31, 2014, the total of
all withholdable payments made to the
NFFE and, with respect to payments
made after the 2014 calendar year, the
total of all withholdable payments made
to the NFFE during the calendar year;
and
*
*
*
*
*
Martin V. Franks,
Chief, Publications and Regulations Branch,
Legal Processing Division, Associate Chief
Counsel (Procedure and Administration).
[FR Doc. 2014–15465 Filed 6–30–14; 8:45 am]
BILLING CODE 4830–01–P
37181
Effective Date: These corrections
are effective on July 1, 2014, and are
applicable on March 6, 2014.
DATES:
John
Sweeney, (202) 317–6942 (not a toll-free
call).
FOR FURTHER INFORMATION CONTACT:
SUPPLEMENTARY INFORMATION:
Background
This document contains amendments
to the Income Tax Regulations (26 CFR
part 1) under sections 871, 1441, 1461,
6041, and 6049 of the Code and the
Employment Tax Regulations (26 CFR
part 31) under section 3406 of the Code.
The final and temporary regulations that
are the subject of these corrections are
§§ 1.871–14, 1.871–14T, 1.1441–1,
1.1441–1T, 1.1441–5T, 1.1441–6T,
1.1441–7T, 1.1461–1, 1.1461–1T,
1.6041–1, 1.6049–4T, 1.6049–5T,
31.3406(g)-1T, and 31.3406(h)-2T. These
regulations affect persons making
payments of U.S. source income to
foreign persons, persons making
payments to certain U.S. persons subject
to reporting and backup withholding,
and foreign persons claiming the
exclusion from tax provided for
portfolio interest.
DEPARTMENT OF THE TREASURY
Need for Correction
Internal Revenue Service
As published, the final and temporary
regulations contain a number of items
that need to be corrected or clarified.
Several citations and cross references
are corrected. The correcting
amendments also include the addition,
deletion, or modification of regulatory
language to clarify the relevant
provisions to meet their intended
purposes or for consistency with other
related provisions of these regulations.
The addition of final regulatory
language only includes language that
was inadvertently removed in the final
and temporary regulations.
26 CFR Parts 1 and 31
[TD 9658]
RIN 1545–BL18
Withholding of Tax on Certain U.S.
Source Income Paid to Foreign
Persons, Information Reporting and
Backup Withholding on Payments
Made to Certain U.S. Persons, and
Portfolio Interest Treatment;
Correction
Internal Revenue Service (IRS),
Treasury.
ACTION: Correcting amendments.
AGENCY:
This document contains
corrections to final and temporary
regulations (TD 9658), which were
published in the Federal Register on
Thursday, March 6, 2014 (79 FR 12726).
The regulations relate to the
withholding of tax on certain U.S.
source income paid to foreign persons,
information reporting and backup
withholding with respect to payments
made to certain U.S. persons, and
portfolio interest paid to nonresident
alien individuals and foreign
corporations.
SUMMARY:
PO 00000
Frm 00027
Fmt 4700
Sfmt 4700
List of Subjects
26 CFR Part 1
Income taxes, Reporting and
recordkeeping requirements.
26 CFR Part 31
Employment taxes, Income taxes,
Penalties, Pensions, Railroad retirement,
Reporting and recordkeeping
requirements, Social security,
Unemployment compensation.
Correction of Publication
Accordingly, 26 CFR parts 1 and 31
are corrected by making the following
correcting amendments:
E:\FR\FM\01JYR1.SGM
01JYR1
]]>Agencies
[Federal Register Volume 79, Number 126 (Tuesday, July 1, 2014)]
[Rules and Regulations]
[Pages 37175-37181]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-15465]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[TD 9657]
RIN 1545-BL73
Regulations Relating to Information Reporting by Foreign
Financial Institutions and Withholding on Certain Payments to Foreign
Financial Institutions and Other Foreign Entities; Correction
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Correcting amendments.
-----------------------------------------------------------------------
SUMMARY: This document contains corrections to final and temporary
regulations (TD 9657), which were published in the Federal Register on
Thursday, March 6, 2014 (79 FR 12812). The regulations relate to
information reporting by foreign financial institutions (FFIs) with
respect to U.S. accounts and withholding on certain payments to FFIs
and other foreign entities.
DATES: Effective Date: These corrections are effective on July 1, 2014.
Applicability Date: These corrections are applicable on March 6,
2014.
[[Page 37176]]
FOR FURTHER INFORMATION CONTACT: Nancy Lee, (202) 317-6942 (not a toll-
free call).
SUPPLEMENTARY INFORMATION:
Background
This document contains amendments to the Income Tax Regulations (26
CFR part 1) under sections 1471 through 1474 of the Internal Revenue
Code. Sections 1471 through 1474 were added to the Code, as Chapter 4
of Subtitle A, by the Hiring Incentives to Restore Employment Act of
2010 (Pub. L. 111-147, 124 Stat. 71).The final and temporary
regulations that are the subject of these corrections are Sec. Sec.
1.1471-1T, 1.1471-2, 1.1471-2T, 1.1471-3T, 1.1471-4, 1.1471-4T, 1.1471-
5T, 1.1471-6T, 1.1472-1T, 1.1473-1T, and 1.1474-1T. These regulations
affect persons making certain U.S.-related payments to FFIs and other
foreign entities, and affect payments by FFIs to other persons.
Need for Correction
As published, the final and temporary regulations under chapter 4
contain a number of items that need to be corrected or clarified.
Several citations and cross references are corrected. These correcting
amendments also include the addition, deletion, or modification of
temporary regulatory language to clarify the relevant provisions to
meet their intended purposes. The addition of final regulatory language
only includes language that was inadvertently removed in the final and
temporary regulations.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and recordkeeping requirements.
Correction of Publication
Accordingly, 26 CFR part 1 is corrected by making the following
correcting amendments:
PART 1--INCOME TAXES
0
Paragraph 1. The authority citation for part 1 continues to read in
part as follows:
Authority: 26 U.S.C. 7805 * * *
Section 1.1471-1 is also issued under 26 U.S.C. 1471
Section 1.1471-2 is also issued under 26 U.S.C. 1471
Section 1.1471-3 is also issued under 26 U.S.C. 1471
Section 1.1471-4 is also issued under 26 U.S.C. 1471
Section 1.1471-5 is also issued under 26 U.S.C. 1471
Section 1.1471-6 is also issued under 26 U.S.C. 1471
Section 1.1472-1 is also issued under 26 U.S.C. 1472
Section 1.1473-1 is also issued under 26 U.S.C. 1473
Section 1.1474-1 is also issued under 26 U.S.C. 1474
0
Par. 2. Section 1.1471-1T is amended by revising paragraphs (b)(20) and
(b)(98).
The revisions read as follows:
Sec. 1.1471-1T Scope of chapter 4 and definitions (temporary).
* * * * *
(b) * * *
(20) Chapter 4 withholding rate pool. The term chapter 4
withholding rate pool means a pool of payees that are nonparticipating
FFIs provided on a chapter 4 withholding statement (as described in
Sec. 1.1471-3(c)(3)(iii)(B)(3)) to which a withholdable payment is
allocated. The term chapter 4 withholding rate pool also means a pool
provided on an FFI withholding statement (as described in Sec. 1.1471-
3(c)(3)(iii)(B)(2)) to which a withholdable payment is allocated to--
(i) A pool of payees consisting of each class of recalcitrant
account holders described in Sec. 1.1471-4(d)(6) (or with respect to
an FFI that is a QI, a single pool of recalcitrant account holders
without the need to subdivide into each class of recalcitrant account
holders described in Sec. 1.1471-4(d)(6)), including a separate pool
of account holders to which the escrow procedures for dormant accounts
apply; or
(ii) A pool of payees that are U.S. persons as described in Sec.
1.1471-3(c)(3)(iii)(B)(2).
* * * * *
(98) Payor. The term payor has the meaning set forth in Sec. Sec.
31.3406(a)-2 and 1.6049-4(a)(2) and generally includes a withholding
agent.
* * * * *
Par. 3. Section 1.1471-2 is amended by revising paragraph
(a)(2)(ii) and adding paragraphs (a)(2)(iii)(A)(1) through (4) and
(a)(4)(ii)(B)(1) through (2).
The revisions and additions read as follows:
Sec. 1.1471-2 Requirement to deduct and withhold tax on withholdable
payments to certain FFIs.
(a) * * *
(2) * * *
(ii) [Reserved]. For further guidance, see Sec. 1.1471-
2T(a)(2)(ii).
* * * * *
(iii) * * *
(A) * * *
(1) The withholding agent is a participating FFI, reporting Model 1
FFI, QI, or a U.S. withholding agent;
(2) The person who receives the payment is a participating FFI or
registered deemed-compliant FFI that acts as a QI with respect to the
payment;
(3) The person who receives the payment provides the withholding
agent, at or before the time of the payment, with a valid intermediary
withholding certificate with respect to the payment that notifies the
withholding agent that it has elected to be withheld upon, certifies
that it is not assuming primary withholding responsibility under
chapter 3, and designates whether such election is made for all
accounts held with the withholding agent or for the specific accounts
identified on the withholding certificate; and
(4) The intermediary withholding certificate is accompanied by a
withholding statement described in Sec. 1.1471-3(c)(3)(iii)(B).
* * * * *
(4) * * *
(ii) * * *
(B) * * *
(1) The withholding agent has available as part of its
electronically searchable information a designation for the payee as a
QI or NQI; or
(2) For an account maintained in the United States, the payee is
presumed to be a foreign entity under Sec. 1.1471-3(f) or is
documented as a foreign entity for purposes of chapter 3 or 61, and the
withholding agent has recorded as part of its electronically searchable
information one of the following North American Industry Classification
System or Standard Industrial Classification codes indicating that the
payee is a financial institution:
(i) Commercial Banking (NAICS 522110).
(ii) Savings Institutions (NAICS 522120).
(iii) Credit Unions (NAICS 522130).
(iv) Other Depositary Credit Intermediation (NAICS 522190).
(v) Investment Banking and Securities Dealing (NAICS 523110).
(vi) Securities Brokerage (NAICS 523120).
(vii) Commodity Contracts Dealing (NAICS 523130).
(viii) Commodity Contracts Brokerage (NAICS 523140).
(ix) Miscellaneous Financial Investment Activities (NAICS 523999).
(x) Open-End Investment Funds (NAICS 525910).
(xi) Commercial Banks, NEC (SIC 6029).
(xii) Branches and Agencies of Foreign Banks (branches) (SIC 6081).
(xiii) Foreign Trade and International Banking Institutions (SIC
6082).
[[Page 37177]]
(xiv) Asset-Backed Securities (SIC 6189).
(xv) Security & Commodity Brokers, Dealers, Exchanges & Services
(SIC 6200).
(xvi) Security Brokers, Dealers & Flotation Companies (SIC 6211).
(xvii) Commodity Contracts Brokers & Dealers (SIC 6221).
(xviii) Unit Investment Trusts, Face-Amount Certificate Offices,
and Closed-End Management Investment Offices (SIC 6726).
* * * * *
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Par. 4. Section 1.1471-2T is amended by revising paragraph (a)(2)(i) to
read as follows:
Sec. 1.1471-2T Requirement to deduct and withhold tax on withholdable
payments to certain FFIs (temporary).
(a) * * *
(2) * * *
(i) Requirement to withhold on payments of U.S. source FDAP income
to participating FFIs and deemed-compliant FFIs that are NQIs, NWPs, or
NWTs. A withholding agent that, after June 30, 2014, makes a payment of
U.S. source FDAP income to a participating FFI or deemed-compliant FFI
that is an NQI receiving the payment as an intermediary, or a NWP or
NWT, must withhold 30 percent of the payment unless the withholding is
reduced under this paragraph (a)(2)(i). A withholding agent is not
required to withhold on a payment, or portion of a payment, that it can
reliably associate, in the manner described in Sec. 1.1471-3(c)(2),
with a valid intermediary or flow-through withholding certificate that
meets the requirements of Sec. 1.1471-3(d)(4) and a withholding
statement that meets the requirements of Sec. 1.1471-3(c)(3)(iii)(B)
and that allocates the payment or portion of the payment to payees for
which no withholding is required under chapter 4. Further, a
withholding agent is not required to withhold on a payment that it can
reliably associate with documentation indicating that the payee is a
U.S. branch treated as a U.S. person (as defined in Sec. 1.1471-
1(b)(135)).
* * * * *
0
Par. 5. Section 1.1471-3T is amended by:
0
1. Revising paragraphs (a)(3)(vi), (c)(3)(iii)(A)(5),
(c)(3)(iii)(B)(1), (c)(6)(iv), (d)(4)(i), (d)(11)(xii)(B),
(e)(4)(ii)(A), (e)(4)(iv)(A), and (e)(4)(vii)(B).
0
2. Adding paragraphs (e)(4)(vii)(C) and (D).
The revisions and additions read as follows:
Sec. 1.1471-3T Identification of payee (temporary).
(a) * * *
(3) * * *
(vi) U.S. branch of certain foreign banks or foreign insurance
companies. A withholdable payment to a U.S. branch of either a
participating FFI, registered deemed-compliant FFI, or NFFE is a
payment to a U.S. person if the U.S. branch is treated as a U.S. person
under Sec. 1.1441-1(b)(2)(iv)(A). In such case, the U.S. branch is
treated as the payee. A U.S. branch treated as a U.S. person (as
defined in Sec. 1.1471-1(b)(135)), however, is not treated as a U.S.
person for purposes of the withholding certificate it may provide to a
withholding agent for purposes of chapter 4. Accordingly, a U.S. branch
treated as a U.S. person must furnish a withholding certificate on a
Form W-8 to certify its chapter 4 status (and not a Form W-9, ``Request
for Taxpayer Identification Number and Certification''). See also
paragraph (f)(6) of this section for the rules under which a
withholding agent can presume a payment constitutes income that is
effectively connected with a U.S. trade or business. A U.S. branch
treated as a U.S. person may not make an election to be withheld upon,
as described in section 1471(b)(3) and Sec. 1.1471-2(a)(2)(iii), for
purposes of chapter 4. See Sec. 1.1471-4(c)(2)(v) for the rule
requiring a U.S. branch that has elected to be treated as a U.S. person
to apply the due diligence rules applicable to a U.S. withholding agent
in lieu of those otherwise applicable to a participating FFI. See also
Sec. 1.1474-1(i)(1) and (2) for the requirement of a U.S. branch to
report information regarding certain U.S. owners of owner documented
FFIs and passive NFFEs. See Sec. 1.1471-4(d) for rules for when a U.S.
branch reports as a U.S. person.
* * * * *
(c) * * *
(3) * * *
(iii) * * *
(A) * * *
(5) A GIIN, in the case of a participating FFI or a registered
deemed-compliant FFI (including a U.S. branch of such an entity,
whether or not such branch is treated as a U.S. person, and including a
QI, WP, or WT that is a participating FFI or registered deemed-
compliant FFI), and an EIN in the case of a QI, WP, or WT.
Additionally, if a branch (other than a U.S. branch) of a participating
FFI or registered deemed-compliant FFI outside of its country of
residence acts as an intermediary, a GIIN of such branch must be
provided on the withholding certificate. In the case of a U.S. branch,
the GIIN provided must be the GIIN assigned to the participating FFI or
registered deemed-compliant FFI.
* * * * *
(B) * * *
(1) In general. A withholding statement forms an integral part of
the withholding certificate and the penalties of perjury statement
provided on the withholding certificate applies to the withholding
statement as well. The withholding statement may be provided in any
manner, and in any form, to which the person submitting the form and
the withholding agent mutually agree, including electronically. A
withholding statement may be provided electronically only if it meets
the requirements of Sec. 1.1441-1(e)(3)(iv)(B). The withholding
statement must be updated as often as necessary for the withholding
agent to meet its reporting and withholding obligations under chapter
4. A withholding agent will be liable for tax, interest, and penalties
under Sec. 1.1474-1(a) to the extent it does not follow the
presumption rules of paragraph (f) of this section for any payment, or
portion thereof, for which a withholding statement is required and the
withholding agent does not have a valid withholding statement prior to
making a payment. A withholding agent that is making a withholdable
payment for which a withholding statement is also required for purposes
of chapter 3 may only rely upon the withholding statement if, in
addition to providing the information required by paragraph
(c)(3)(iii)(B) of this section, the withholding statement also includes
all of the information required for purposes of chapter 3 and specifies
the chapter 4 status of each payee or pool of payees identified on the
withholding statement for purposes of chapter 3.
* * * * *
(6) * * *
(iv) Electronic transmission of withholding certificate, written
statement, and documentary evidence. A withholding agent may accept a
withholding certificate (including an acceptable substitute form), a
written statement, or other such form as the IRS may prescribe,
electronically in accordance with the requirements set forth in Sec.
1.1441-1(e)(4)(iv).
* * * * *
(d) * * *
(4) * * *
(i) In general. Except as otherwise provided in paragraphs
(d)(4)(ii) through (iv) or paragraphs (e)(3)(i) and (ii) of this
section, a withholding agent may treat a payee as a participating FFI
or registered deemed-compliant FFI
[[Page 37178]]
only if the withholding agent has a withholding certificate identifying
the payee as a participating FFI, registered deemed-compliant FFI, or
branch thereof (including an entity that is disregarded as an entity
separate from the FFI), and the withholding certificate contains a GIIN
for the payee that is verified against the published IRS FFI list in
the manner described in paragraph (e)(3) of this section (indicating
when a withholding agent may rely upon a GIIN). For payments made prior
to January 1, 2016, a registered deemed-compliant FFI that is a
sponsored FFI must provide the GIIN of its sponsoring entity on the
withholding certificate if the sponsored FFI has not obtained a GIIN,
which the withholding agent has verified against the published IRS FFI
list in the manner described in paragraph (e)(3) of this section
(substituting the term sponsored FFI for the term sponsored direct
reporting NFFE). See paragraph (c)(3)(iii) of this section for
additional requirements that apply to a valid withholding certificate
provided by a participating FFI or registered deemed-compliant FFI that
is a flow-through entity or is acting as an intermediary with respect
to the payment, or by a U.S. branch of a participating FFI or
registered deemed-compliant FFI (including a U.S. entity that is
disregarded as an entity separate from the FFI).
* * * * *
(11) * * *
(xii) * * *
(B) Offshore obligations. A participating FFI that makes a payment
with respect to an offshore obligation may treat the payment as made to
an excepted inter-affiliate FFI described in Sec. 1.1471-5(e)(5)(iv)
if the participating FFI obtains a written statement in which the payee
certifies that it is a foreign entity operating as an excepted inter-
affiliate FFI and that it is a member of an expanded affiliated group
of participating FFIs or registered deemed-compliant FFIs. In the case
of a payment of U.S. source FDAP income, the written statement must
also indicate that the payee is the beneficial owner and must be
supplemented with documentary evidence supporting the payee's claim of
foreign status (as described in paragraph (c)(5)(i) of this section).
* * * * *
(e) * * *
(4) * * *
(ii) * * *
(A) In general. A withholding agent has reason to know that a
withholding certificate provided by a person is unreliable or incorrect
if the withholding certificate is incomplete with respect to any item
on the certificate that is relevant to the claims made by the person,
the withholding certificate contains any information that is
inconsistent with the person's claim, the withholding agent has other
account information that is inconsistent with the person's claim, or
the withholding certificate lacks information necessary to establish
entitlement to an exemption from withholding for chapter 4 purposes.
Except as otherwise provided in this paragraph (e)(4)(ii)(A), a
withholding agent that is a financial institution or other entity
described in Sec. 1.1441-7(b)(3) and that has obtained a withholding
certificate to reliably associate a payment to a foreign person under
paragraph (c) of this section has reason to know that the person's
claim of foreign status is unreliable or incorrect only if there are
U.S. indicia, as described in Sec. 1.1441-7(b)(5), associated with the
person and for which appropriate documentation sufficient to cure the
U.S. indicia has not been obtained in accordance with Sec. 1.1441-7(b)
within 90 days of when the U.S. indicia was first identified by the
withholding agent. See also Sec. 1.1441-1(e)(4)(ii)(D) for
requirements that apply when a change in circumstances occurs for
purposes of chapter 3 and the related grace period allowed under Sec.
1.1441-1(b)(3)(iv). A withholding agent that relies on an agent to
review and maintain a withholding certificate is considered to know or
have reason to know the facts within the knowledge of the agent.
* * * * *
(iv) * * *
(A) In general. A withholding agent may not treat documentary
evidence provided by a person as valid if the documentary evidence does
not reasonably establish the identity of the person presenting the
documentary evidence. For example, documentary evidence is not valid if
it is provided in person by an individual and the photograph or
signature on the documentary evidence does not match the appearance or
signature of the person presenting the document. A withholding agent
may not treat documentary evidence as valid if the documentary evidence
contains information that is inconsistent with the person's claim as to
its chapter 4 status, the withholding agent has other account
information that is inconsistent with the person's chapter 4 status, or
the documentary evidence lacks information necessary to establish the
person's chapter 4 status. Additionally, a withholding agent that is a
financial institution under Sec. 1.1471-5(e), or other entity as
described in Sec. 1.1441-7(b)(3) that has obtained documentary
evidence to reliably associate a payment to a foreign person under
paragraph (c) of this section has reason to know that the person's
claim of foreign status is unreliable or incorrect only if there are
U.S. indicia, as described in Sec. 1.1441-7(b)(8), associated with the
person and appropriate documentation sufficient to cure the U.S.
indicia has not been obtained in accordance with Sec. 1.1441-7(b)
within 90 days of when the U.S. indicia was first identified by the
withholding agent. See also Sec. 1.1441-1(e)(4)(ii)(D) for
requirements when a change in circumstances occurs for purposes of
chapter 3 and the related grace period allowed under Sec. 1.1441-
1(b)(3)(iv).
* * * * *
(vii) * * *
(B) Reason to know there are U.S. indicia associated with
preexisting obligations. With respect to a preexisting obligation, a
withholding agent may apply the limits on reason to know described in
Sec. 1.1441-7(b)(3)(ii) for a person that the withholding agent has
previously documented for purposes of chapters 3 or 61. A withholding
agent that applies the limits on reason to know described in Sec.
1.1441-7(b)(3)(ii) must, however, review for U.S. indicia any
additional documentation upon which the withholding agent is relying to
determine the chapter 4 status of the person, if any.
(C) and (D) [Reserved]. For further guidance, see Sec. 1.1471-
3(e)(4)(vii)(C) and (D).
* * * * *
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Par. 6. Section 1.1471-4 is amended by revising paragraphs (d)(6)(vi)
and (vii) and adding paragraphs (d)(7)(ii)(A)(1) through (3) to read as
follows:
Sec. 1.1471-4 FFI agreement.
* * * * *
(d) * * *
(6) * * *
(vi) [Reserved]. For further guidance, see Sec. 1.1471-
4T(d)(6)(vi).
(vii) Record retention requirements. A participating FFI that
produces, in the ordinary course of its business, account statements
that summarize the activity (including withdrawals, transfers, and
closures) of an account held by a recalcitrant account holder described
in paragraph (d)(6)(i)(B) of this section for any calendar year in
which the account was required to be reported under paragraph (d)(6) of
this section must retain a record of such account
[[Page 37179]]
statements. Such record must be retained for the longer of six years or
the retention period under the FFI's normal business procedures. A
participating FFI may be required to extend the six year retention
period if the IRS requests such an extension prior to the expiration of
the six year period.
* * * * *
(7) * * *
(ii) * * *
(A) * * *
(1) The name, address, and TIN of each specified U.S. person who is
an account holder and, in the case of any account holder that is an
NFFE that is a U.S. owned foreign entity or that is an owner-documented
FFI, the name of such entity and the name, address, and TIN of each
substantial U.S. owner of such NFFE or, in the case of an owner-
documented FFI, of each specified U.S. person identified in Sec.
1.1471-3(d)(6)(iv)(A)(1) and (2);
(2) The account balance or value as of the end of the relevant
calendar year, or if the account was closed after the effective date of
the FFI agreement, the amount or value withdrawn or transferred from
the account in connection with closure; and
(3) The account number of the account.
* * * * *
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Par. 7. Section 1.1471-4T is amended by revising paragraphs
(b)(3)(iii), (d)(2)(ii)(F), (d)(2)(iii)(B) introductory text, and
(d)(7)(iv)(B) to read as follows:
Sec. 1.1471-4T FFI agreement (temporary).
* * * * *
(b) * * *
(3) * * *
(iii) Election to withhold under section 3406. A participating FFI
may elect to satisfy its withholding obligation under paragraph (b)(1)
of this section with respect to recalcitrant account holders that are
also U.S. non-exempt recipients subject to backup withholding under
section 3406 receiving withholdable payments, to the extent that the
payments also constitute reportable payments, by applying withholding
under section 3406 at the backup withholding rate to such withholdable
payments. A participating FFI may make the election described in this
paragraph only if it complies with the information reporting rules
under chapter 61 with respect to payments to which backup withholding
applies. Nothing in this paragraph relieves a participating FFI of its
requirement to backup withhold under section 3406 with respect to
reportable payments that are not also withholdable payments. See Sec.
1.1474-6(f) for the general rule that satisfying withholding
requirements under chapter 4 will satisfy backup withholding
requirements under section 3406 for a payment that is both a
withholdable payment and a reportable payment.
* * * * *
(d) * * *
(2) * * *
(ii) * * *
(F) Reporting by participating FFIs (including QIs, WPs, WTs, and
certain U.S. branches not treated as U.S. persons) for accounts of
nonparticipating FFIs (transitional). Except as otherwise provided in
the instructions to Form 8966, ``FATCA Report,'' if a participating FFI
(including a QI, WP, WT, or U.S. branch of a participating FFI or
registered deemed-compliant FFI that is not treated as a U.S. person)
maintains an account for a nonparticipating FFI (including a limited
branch and limited FFI treated as a nonparticipating FFI), the
participating FFI must report on Form 8966 the name and address of the
nonparticipating FFI, and the aggregate amount of foreign source
payments, as described in paragraph (d)(4)(iv) of this section, paid to
or with respect to each such account (foreign reportable amount) for
each of the calendar years 2015 and 2016. If, however, the
participating FFI is prohibited under domestic law from reporting on a
specific payee basis without consent from the nonparticipating FFI
account holder and the participating FFI has not been able to obtain
such consent, the participating FFI may instead report the aggregate
number of accounts held by such non-consenting nonparticipating FFIs
and the aggregate amount of foreign reportable amounts paid with
respect to such accounts, as described in paragraph (d)(4)(iv) of this
section, during the calendar year. A participating FFI may, in lieu of
reporting only foreign reportable amounts, report all income, gross
proceeds, and redemptions (irrespective of the source) paid to the
nonparticipating FFI's account by the participating FFI during the
calendar year. In addition, the participating FFI must retain the
account statements related to such nonparticipating FFI accounts. See
paragraphs (d)(6)(iv), (v), (vi) and (vii) of this section for rules
relating to reporting on recalcitrant account holders. Form 8966 shall
be filed electronically with the IRS on or before March 31 of the year
following the end of the calendar year to which the form relates.
(iii) * * *
(B) Special reporting rules for U.S. branches treated as U.S.
persons. A U.S. branch treated as a U.S. person (as defined in Sec.
1.1471-1(b)(135)) shall be treated as having satisfied the reporting
requirements described in paragraph (d)(2)(i) of this section if it
reports under--
* * * * *
(7) * * *
(iv) * * *
(B) Special determination date and timing for reporting with
respect to the 2014 calendar year. With respect to the 2014 calendar
year, a participating FFI must report under paragraph (d)(3) or (5) of
this section on all accounts that are identified and documented under
paragraph (c) of this section as U.S. accounts or accounts held by
owner-documented FFIs as of December 31, 2014, (or as of the date an
account is closed if the account is closed prior to December 31, 2014)
if such account was outstanding on July 1, 2014. Reporting for the 2014
calendar year shall be filed with the IRS on or before March 31, 2015.
However, a U.S. payor (including a U.S. branch treated as a U.S. person
(as defined in Sec. 1.1471-1(b)(135))) that reports in accordance with
paragraph (d)(2)(iii) of this section may report all or a portion of
its U.S. accounts and accounts held by owner-documented FFIs in
accordance with the dates otherwise applicable to reporting under
chapter 61 with respect to the 2014 calendar year.
* * * * *
0
Par. 8. Section 1.1471-5T is amended by revising paragraph (f)(2)(iii)
introductory text and the heading of paragraph (i), removing paragraph
(i) introductory text, and revising paragraph (i)(1) to read as
follows:
Sec. 1.1471-5T Definitions applicable to section 1471 (temporary).
* * * * *
(f) * * *
(2) * * *
(iii) Sponsored, closely held investment vehicles. Subject to the
provisions of paragraph (f)(2)(iii)(E) of this section, an FFI is
described in this paragraph (f)(2)(iii) if it meets the requirements
described in paragraphs (f)(2)(iii)(A) through (D) of this section.
* * * * *
(i) Expanded affiliated group--(1) Scope of paragraph. This
paragraph (i) defines the term expanded affiliated group for purposes
of chapter 4. For the requirements of a participating FFI with respect
to members of its expanded affiliated group that are FFIs, see Sec.
1.1471-4(e).
* * * * *
[[Page 37180]]
0
Par. 9. Section 1.1471-6T is amended by revising paragraph (h)(2) to
read as follows:
Sec. 1.1471-6T Payments beneficially owned by exempt beneficial
owners (temporary).
* * * * *
(h) * * *
(2) Limitation. Paragraph (h)(1) of this section will not apply to
treat an exempt beneficial owner as engaged in a commercial financial
activity if--
(i) The entity undertakes commercial financial activity described
in paragraph (h)(1) of this section solely for or at the direction of
other exempt beneficial owners and such commercial financial activity
is consistent with the purposes of the entity;
(ii) The entity has no outstanding debt that would be a financial
account under Sec. 1.1471-5(b)(1)(iii); and
(iii) The entity otherwise maintains financial accounts only for
exempt beneficial owners, or, in the case of a foreign central bank of
issue as described in paragraph (d), the entity only maintains
financial accounts that are depository accounts for current or former
employees of the entity (and the spouses and children of such
employees) or financial accounts for exempt beneficial owners.
* * * * *
0
Par. 10. Section 1.1472-1T is amended by revising paragraphs (c)(1)(ii)
and (c)(3)(iii) to read as follows:
Sec. 1.1472-1T Withholding on NFFEs (temporary).
* * * * *
(c) * * *
(1) * * *
(ii) Certain affiliated entities related to a publicly traded
corporation. A NFFE is described in this paragraph (c)(1)(ii) if it is
a corporation that is a member of the same expanded affiliated group
(as defined in Sec. 1.1471-5(i)) as a corporation described in
paragraph (c)(1)(i) of this section (without regard to whether such
corporation is a NFFE).
* * * * *
(3) * * *
(iii) The NFFE must obtain a written certification (contained on a
withholding certificate or in a written statement) from each person
that would be treated as a substantial U.S. owner of the NFFE if such
person were a specified U.S. person. Such written certification must
indicate whether the person is a substantial U.S. owner of the NFFE,
and if so, the name, address and TIN of the person. If the NFFE has
reason to know that such written certification is unreliable or
incorrect, it must contact the person and request a revised written
certification. If no revised written certification is received, the
NFFE must treat the person as a substantial U.S. owner and report on
Form 8966 the information required under paragraph (c)(3)(ii) of this
section. The NFFE has reason to know that such a written certification
is unreliable or incorrect if the certification is inconsistent with
information in the NFFE's possession, including information that the
NFFE provides to a financial institution in order for the financial
institution to meet its AML or other account identification due
diligence procedures with respect to the NFFE's account, information
that is publicly available, or U.S. indicia as described in Sec.
1.1441-7(b) for which appropriate documentation sufficient to cure the
U.S. indicia in the manner set forth in Sec. 1.1441-7(b)(8) has not
been obtained.
* * * * *
0
Par. 11. Section 1.1473-1T is amended by revising paragraphs (a)(4)(vi)
and (a)(4)(vii) to read as follows:
Sec. 1.1473-1T Section 1473 definitions (temporary).
(a) * * *
(4) * * *
(vi) Offshore payments of U.S. source FDAP income prior to 2017
(transitional). A payment with respect to an offshore obligation (as
defined in Sec. 1.1471-1(b)(88)) made prior to January 1, 2017, if
such payment is U.S. source FDAP income and made by a person that is
not acting as an intermediary or as a WP or WT with respect to the
payment. Additionally, a payment with respect to an account,
obligation, contract, or other instrument that is issued or maintained
by an entity other than a financial institution and that would be
treated as an offshore obligation under Sec. 1.6049-5(c)(1) (applied
by substituting the term entity for the term financial institution (as
defined in Sec. 1.1471-5(e)) in each place that it appears), made
prior to January 1, 2017, if such payment is U.S. source FDAP and made
by a person that is not acting as an intermediary or as a WP or WT with
respect to the payment is not a withholdable payment under paragraph
(a)(1) of this section. The exception for offshore payments of U.S.
source FDAP income provided in the preceding sentences shall not apply,
however, in the case of a flow-through entity that has a residual
withholding requirement with respect to its partners, owners, or
beneficiaries under Sec. 1.1471-2(a)(2)(ii), or in the case of
payments made with respect to debt or equity issued by a U.S. person
(excluding interest payments made by a foreign branch of a U.S.
financial institution with respect to depository accounts it
maintains). For purposes of this paragraph (a)(4)(vi), an intermediary
includes a person that acts as a qualified securities lender as defined
for purposes of chapter 3 and does not include a person acting as an
insurance broker with respect to premiums.
(vii) Collateral arrangements prior to 2017 (transitional). A
payment made prior to January 1, 2017, by a secured party, or to a
secured party other than a nonparticipating FFI, with respect to
collateral securing one or more transactions under a collateral
arrangement, provided that only a commercially reasonable amount of
collateral is held by the secured party (or by a third party for the
benefit of the secured party) as part of the collateral arrangement.
For purposes of this paragraph (a)(4)(vii), the term transaction
generally includes a debt instrument, a derivative financial instrument
(including a notional principal contract, future, forward, and option),
and any securities lending transaction, sale-repurchase transaction,
margin loan, or substantially similar transaction that is subject to a
collateral arrangement. Solely for purposes of this paragraph
(a)(4)(vii), a secured party may provide documentation to the
withholding agent indicating that it is the beneficial owner of a
payment described in this paragraph (a)(4)(vii), and a withholding
agent may rely on such certification for purposes of its requirements
under Sec. 1.1471-3(d) for determining whether withholding under
chapter 4 applies.
* * * * *
0
Par. 12. Section 1.1474-1T is amended by revising paragraphs
(d)(4)(iii)(C), (i)(1)(i), (i)(1)(ii), (i)(1)(iii)(C), (i)(2)
introductory text, and (i)(2)(iii) to read as follows:
Sec. 1.1474-1T Liability for withheld tax and withholding agent
reporting (temporary).
* * * * *
(d) * * *
(4) * * *
(iii) * * *
(C) Reporting by a U.S. branch treated as a U.S. person. A U.S.
branch treated as a U.S. person (as defined in Sec. 1.1471-1(b)(135))
must report amounts paid to recipients on Forms 1042-S in the same
manner as a U.S. withholding agent under paragraph (d)(4)(i) of this
section.
* * * * *
(i) * * *
(1) * * *
(i) Beginning on July 1, 2014, if a withholding agent (other than
an FFI reporting accounts held by owner-
[[Page 37181]]
documented FFIs under Sec. 1.1471-4(d)) makes a withholdable payment
to an entity account holder or payee of an obligation and the
withholding agent treats the entity as an owner-documented FFI under
Sec. 1.1471-3(d)(6), the withholding agent is required to report for
July 1 through December 31, 2014, with respect to each specified U.S.
person identified in Sec. 1.1471-3(d)(6)(iv)(A)(1) and (2) the
information described in paragraph (i)(1)(iii) of this section.
(ii) Beginning in calendar year 2015, if a withholding agent (other
than an FFI reporting accounts held by owner-documented FFIs under
Sec. 1.1471-4(d)) makes during a calendar year a withholdable payment
to an entity account holder or payee of an obligation and the
withholding agent treats the entity as an owner-documented FFI under
Sec. 1.1471-3(d)(6), the withholding agent is required to report for
such calendar year with respect to each specified U.S. person
identified in Sec. 1.1471-3(d)(6)(iv)(A)(1) and (2) the information
described in paragraph (i)(1)(iii) of this section.
(iii) * * *
(C) For the period from July 1 through December 31, 2014, the total
of all withholdable payments made to the owner-documented FFI and with
respect to payments made after the 2014 calendar year the total of all
withholdable payments made to the owner-documented FFI during the
calendar year;
* * * * *
(2) Reporting by certain withholding agents with respect to U.S.
owned foreign entities that are NFFEs. Beginning on July 1, 2014, in
addition to the reporting on Form 1042-S required under paragraph
(d)(4)(i)(E) of this section, a withholding agent (other than an FFI
reporting accounts held by NFFEs under Sec. 1.1471-4(d)) that makes a
withholdable payment to, and receives information about any substantial
U.S. owners of, a NFFE that is not an excepted NFFE as defined in Sec.
1.1472-1(c) shall file a report with the IRS for the period from July 1
through December 31, 2014, and in each subsequent calendar year in
which a withholdable payment is made with respect to any substantial
U.S. owners of such NFFE. Such report must be made on Form 8966 (or
such other form as the IRS may prescribe) and filed on or before March
31 of the calendar year following the year in which the withholdable
payment was made. The IRS shall grant an automatic 90-day extension of
time in which to file Form 8966. Form 8809, ``Request for Extension of
Time to File Information Returns,'' (or such other form as the IRS may
prescribe) must be used to request such extension of time and must be
filed no later than the due date of Form 8966. Under certain hardship
conditions, the IRS may grant an additional 90-day extension. A request
for extension due to hardship must contain a statement of the reasons
for requesting the extension and such other information as the form or
instructions may require. The report must contain the following
information--
* * * * *
(iii) For the period from July 1, 2014 through December 31, 2014,
the total of all withholdable payments made to the NFFE and, with
respect to payments made after the 2014 calendar year, the total of all
withholdable payments made to the NFFE during the calendar year; and
* * * * *
Martin V. Franks,
Chief, Publications and Regulations Branch, Legal Processing Division,
Associate Chief Counsel (Procedure and Administration).
[FR Doc. 2014-15465 Filed 6-30-14; 8:45 am]
BILLING CODE 4830-01-P
