As part of implementation of FATCA and an update to the initially published agreements, the IRS recently updated the Withholding Foreign Partnership (WP) and Withholding Foreign Trust (WT) agreements. The WP and WT agreements apply to foreign partnerships and trusts that are looking to enter into a withholding agreement with the IRS.

What's included in the update?

The revised revenue procedure offers advice for entering into a WP or WT Agreement with the IRS. This allows the WP or WT to take on withholding and reporting responsibilities for payments of U.S. source income (like dividends, interest, and royalties) made to owners, partners or beneficiaries.

The changes include:

• New application process for becoming a WP or WT
• Instructions for renewal of a WP or WT agreement
• Updated text of WP and WT agreements.

Important Dates

The updates apply for WP and WT agreements with effective dates on/after June 30, 2014. For calendar years after 2014, approved WP or WT applications received on or before March 31st of the calendar year will be effective January 1st of that year. Approved applications received on or after April 1st will be in force January 1st of the following year and WP agreement compliance must begin January 1st.

For more information on the updates, contact any member of our International Tax Services Group.