The US IRS has updated publication 515 regarding withholding of tax on nonresident aliens and foreign entities. The Publication is for withholding agents who pay income to foreign persons, including nonresident aliens, foreign corporations, foreign partnerships, foreign trusts, foreign estates, foreign Governments, and international organizations.
Specifically, it describes the persons responsible for withholding tax (withholding agents), the types of income subject to withholding, and the information return and tax return filing obligations of withholding agents. It also contains sections on the withholding that applies to the disposition of US real property interests and the withholding by partnerships on income effectively connected with the active conduct of a US trade or business.
FATCA, which took effect on July 1, 2014, is intended to ensure that the IRS obtains information on accounts held at foreign financial institutions (FFIs) by US persons. Failure by an FFI to disclose information on their US clients will result in a requirement to withhold 30 percent tax on payments of US-sourced income.
