Source: https://www.lexisnexis.com/LegalNewsRoom/tax-law/b/fatcacentral/posts/fatca-withholding-compliance
Timestamp: 2019-04-21 12:12:54+00:00

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Editor's Note: The following is an excerpt from Chapter 11 of the LexisNexis® Guide to FATCA Compliance* by William Byrnes and Robert Munro. The title is now shipping to customers world-wide.
Certain categories of U.S. source income are subject to withholding "at source"-i.e. in the U.S. Because the U.S. has no taxing authority or jurisdiction over foreign persons, the IRC finds one or more withholding agents who are required to withhold at source in the U.S. Generally when transfers of these certain categories of income are made to persons outside the U.S., the withholding agent in the U.S. withholds a certain percentage of the funds and remits the funds to the Internal Revenue Service (IRS). The withholding rules are generally described under the Qualified Intermediary (QI) program.
The U.S. added the Foreign Account Tax Compliance Act (FATCA) as an additional layer over QI.2 FATCA consists of worldwide reporting and withholding rules designed to greatly reduce U.S. tax noncompliance for accounts and certain assets held offshore by U.S. taxpayers. FATCA's withholding rules are discussed in this chapter.
When Do Withholdable Payments Begin?
* Copyright 2013, Matthew Bender & Company, Inc., a member of the LexisNexis Group.
4 Treas Reg § 1.1471-1(a)(136), citing Treas Reg § 1.1473-1(a).
5 Treas Reg § 1.1471-2(a)(1).
6 Treas Reg § 1.1471-2(a)(4).
7 Any obligation outstanding on January 1, 2014, is a grandfathered obligation. Treas Reg § 1.1471-2(b)(2)(i)(A)(1).
8 See Treas Reg § 1.1441-1(b)(2)(iv)(A).
9 Treas Reg § 1.1472-1(a).
10 Treas Reg § 1.1472-1(b).
11 Treas Reg § 1.1472-1(b)(2).
12 Treas Reg § 1.1472-1(c)(1).
13 Treas Reg § 1.1472-1(c)(1)(ii).
14 Treas Reg § 1.1472-1(c)(1)(iii).
15 Treas Reg § 1.1472-1(c)(1)(iv).
16 Treas Reg § 1.1472-1(c)(1)(v).

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