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QI Audit & Waiver
QI Periodic Certification, Periodic Review & Waiver
- Details
Under Revenue Procedure 2017-15 (the "QI Agreement"), QIs are required to perform certification of sufficiency of internal controls ("Periodic Certification") every three years. For most QIs, the initial Periodic Certification was performed in 2018 and covered the years 2015, 2016 and 2017. The Periodic Certification must be performed by the Responsable Officer ("RO") of the QI, which may be either a certification of sufficient internal controls or, in case compliance matters remain on-going at the time of certification, a qualified certification.
The Periodic Certification involves the certification of effective internal controls, and specifically whether or not there is a Material Failure or Event of Default. The certification requires the RO to certify FATCA compliance in relation to those accounts for which the QI operated in its capacity as a QI, general compliance with the obligations under the QI Agreement as well as specific Factual Information in relation to the Periodic Review.
The RO must take into consideration the results of the review of internal controls when performing the Periodic Certification.
The scope and methodology to be utilized for the Periodic Review is set forth in Appendix I and Appendix II of the QI Agreement. In case certain criteria are met the QI may request a waiver of the Periodic Review.
QI Waiver of the Periodic Review
- Details
In certain cases a QI may be able to request a waiver of the requirement to perform the Periodic Review. Specficially, a QI may qualify for a waiver in case all of the following requirements are satisfied:
- The QI is not a Qualified Derivatives Dealer;
- The QI is not part of a consolidated (QI) compliance program;
- In each of the years of the Certification Period the QI did not receive more than US$5 million of QI reportable income;
- For each year of the Certification Period the QI timely filed Forms 1042, 1042-S, 945 (if applicable), 1099 (if applicable) as well as the relevant FATCA reporting to the local tax authorities; and
- The QI has complied with the Periodic Certification in relation to the prior Certification Period.
QI Periodic Review
- Details
The QI Periodic Review is a review of compliance for one of the years in the three year compliance period. The Periodic Review may be performed by an independent internal or external reviewer.
The scope and methodology to be utilized for the Periodic Review is contained in Annex I and Annex II of the QI Agreement (Revenue Procedure 2017-15). The results of the Periodic Review are reported to the Responsable Officer and must be taken into consideration in performing the Periodic Certification.