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Last Updated: 28 June 2017

The U.S. QI regime is a set of rules designed to ensure that U.S. source income (e.g., dividends and interest) paid to non-U.S. recipients is subject to tax at the appropriate U.S. tax rate. In general, U.S. source investment income is subject to U.S. tax at a rate of 30% of the gross amount paid.

For instance, a U.S. source dividend of $100 would be subject tax of $30, and the recipient would receive $70. The tax normally is applied at-source by the U.S. custodian.

In order for the non-U.S. recipient to obtain a withholding rate lower than 30%, for instance under an income tax treaty, the recipient must provide documentation as to his tax residence and non-US status which is usually done by completing IRS Form W-8BEN or W-8BEN-E.