A QI is a non-US financial institution that has entered into a QI Agreement with the IRS. The QI Agreement provides that the QI must implement policies and procedures to ensure proper documentation of clients that invest in US securities, perform annual tax information reporting on Forms 1042 and 1042-S, and apply withholding if necessary. These procedures are subject to period certification.

An intermediary with the status of QI can certify treaty residence and/or non-U.S. residence on behalf of direct clients and therefore obtain a reduced rate of U.S. withholding for its direct non-US customers without revealing their identity.