Important Changes

Qualified intermediary employer identification number (QI-EIN). A foreign intermediary that has received a QI-EIN may represent on Form W-8IMY that it is a QI before it receives a fully executed agreement. The intermediary can claim that it is a QI unless the IRS revokes its QI-EIN. The IRS will revoke a QI-EIN if the QI agreement is not executed and returned to the IRS within a reasonable period of time.

See Foreign Intermediaries, for more information.

Lower withholding rate on partners. Generally, a partnership must pay a withholding tax on effectively connected taxable income that is allocable to its foreign partners. For 2002, the withholding rate is reduced to 38.6% (from 39.1% for 2001.)

See Partnership Withholding on Effectively Connected Income, for more information.

U.S-Slovenia tax treaty. A new income tax treaty with Slovenia went into effect for taxes withheld at source for amounts paid or credited on or after September 1, 2001, and for other taxes, for tax periods beginning on or after January 1, 2002.

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