The QI agreement permits a foreign intermediary to simplify its obligations as a withholding agent under Chapter 3 (non-US resident withholding) and 4 (FATCA withholding), and as a payor under Chapter 61 and IRC Section 3406, for amounts paid to its account holders. The 2023 QI Agreement adopts many of the proposed changes in Notice 2022-23 (see Tax Alert 2022-0754). The QI agreement established under Revenue Procedure 2017-15 (2017 QI agreement) will expire on December 31, 2022. In Revenue Procedure 2022-43, issued On December 13, 2022, the IRS sets forth a final, revised qualified intermediary (QI) agreement (hereafter, the 2023 QI Agreement) that will apply for QI agreements entering into effect on or after January 1, 2023. The new QI Agreement also incorporates prior guidance from IRS FAQS, compliance and certification changes, stakeholder input and changes to the 2017 QI agreement.The new QI agreement updates requirements for qualified derivatives dealers (QDDs) and qualified securities lenders (QSLs) for payments of dividend equivalents under IRC Section 871(m).The new qualified intermediary (QI) agreement, applicable for agreements entered on or after January 1, 2023, expands the scope of a QI agreement to allow QIs to assume withholding and reporting responsibilities for purposes of IRC Section 1446(a) and (f).
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