SECTION 3. WITHHOLDING RESPONSIBILITY UNDER SECTION 1441, 1442, AND 1443

Sec. 3.01. Withholding Responsibility. QI is subject to the withholding and reporting provisions applicable to withholding agents and payors under chapters 3, 61, and section 3406 of the Code. QI shall not, however, be required to withhold tax under sections 1441, 1442, and 1443 from any payment of a reportable amount received from a withholding agent, provided that the withholding agent withheld the proper amount of tax.

Sec. 3.02. Assumption of Chapter 3 Primary Withholding Responsibility. QI, upon agreement with a withholding agent, may assume primary withholding responsibility under chapter 3 of the Code for a reportable amount paid by the withholding agent to an account QI has with the withholding agent by providing the withholding agent a Form W-8IMY on which QI designates the account to which the amount is paid as one for which it assumes primary withholding responsibility. QI is not required to assume primary withholding responsibility for all accounts it has with the withholding agent. However, if QI assumes primary withholding responsibility under chapter 3 of the Code for any account, it must assume that responsibility for all payments of reportable amounts made by the withholding agent to that account. QI may assume primary withholding responsibility under chapter 3 of the Code without informing the IRS. See section 8.04 of this Agreement for QI’s responsibilities to the extent it has assumed Form 1099 reporting responsibility and backup withholding.

[Use section 3.03, below, if QI is not eligible or does not assume backup withholding and Form 1099 reporting responsibility. A QI is not eligible to assume primary backup withholding and chapter 61 reporting responsibility if it is a foreign person that does not have a branch in the U.S. capable of adequately fulfilling the obligations imposed under chapter 61 and section 3406 of the Code. ]

Sec. 3.03. No Assumption of Form 1099 Reporting and Backup Withholding Responsibility. Notwithstanding section 3.01 of this Agreement, QI may not assume Form 1099 reporting responsibility or backup withholding responsibility under section 3406 of the Code in lieu of furnishing a withholding agent with a U.S. non-exempt recipient account holder’s Form W-9, or other information regarding the account holder. Therefore, QI must furnish the withholding agent with a U.S. non-exempt recipient’s Form W-9, or other information in accordance with section 6 of this Agreement, and separately identify the assets associated with such recipient as required under section 7 of this Agreement.

1999–5 I.R.B. 37 February 1, 1999

[Use section 3.03, below, if QI does assumes Form 1099 reporting and backup withholding responsibility.]

Sec. 3.03. Assumption of Form 1099 Reporting and Backup Withholding Responsibility.

[QI maintains the following branch [name and U.S. address] in the United States and represents that the branch can fulfill the Form 1099 reporting obligations and backup withholding obligations of a payor under chapter 61 and section 3406 of the Code]. ²

or

[QI is a foreign branch of a U.S. financial institution]. ³

QI assumes Form 1099 reporting responsibility under chapter 61 of the Code and backup withholding responsibility under section 3406 of the Code for reportable payments made to an account QI has with the withholding agent in lieu of furnishing the withholding agent with a U.S. non-exempt recipient account holder’s Form W-9, or, in absence of a Form W-9, information regarding the account holder’s name, address, and taxpayer identification number, if any. QI shall assume such reporting and withholding obligations by attaching a statement to a Form W-8IMY on which QI designates the account it has with the withholding agent for which it assumes such obligations. QI is not required to assume Form 1099 reporting and backup withholding responsibility for all accounts it has with the withholding agent. However, if QI assumes Form 1099 reporting and backup withholding responsibility for any account, it must assume that responsibility for all reportable payments made by the withholding agent to that account. See section 8.04 of this Agreement for QI’s responsibilities to the extent it has assumed Form 1099 reporting responsibility and backup withholding.

Sec. 3.04. Requirements of QI Assuming Reporting and Withholding Responsibility Under Sections 3.02 and/or 3.03. If QI assumes primary withholding responsibility under chapter 3 of the Code or assumes Form 1099 reporting and backup withholding responsibility for payments received from a withholding agent in accordance with sections 3.02 and/or 3.03 of this Agreement, then–

(A) QI shall assume that responsibility for all other intermediaries (whether qualified or nonqualified) that may precede QI in the chain of payment, but

(B) QI shall not be required to withhold on any payment made to another qualified intermediary that follows QI in the chain of payment and that has assumed primary withholding responsibility for that payment.