New U.S. Withholding Tax Rules: A Practical Guide

Rating:
Summary: Bruce Zagaris -- Thumbs Up
Review: This book discusses the radical change in new U.S. Treasury Department regulations and other guidance on withholding taxes on payments to foreign individuals and foreign corporations of interest, dividends, rent, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, or other fixed or determinable annual or periodical gains, profits, and similar income (FDAP income).
Bruce's many years of experience in advising clients on international tax planning, especially the use of foreign trusts and complex structures, makes the book a valuable resource to those working in the area. His ability to conceptualize visually most of the salient issues enables him to explain difficult issues in sensible and practical ways.
The relevance of the book on withholding issues is indicated by the fact that in 1998, the most recent data available, annual payments to foreign persons surpassed US$124 billion. They were reported on more than 2.4 million information returns. The amount of tax reported totaled approximately US$2.4 billion.
The book contains a simplified description of the tax and reporting requirements. It emphasizes "real world" situations that would help U.S. and foreign institutions that must deal with the withholding requirements decide how to handle many issues and how to reorganize their business practices. Of course, the new withholding requirements have created diverse problems for customers and clients of many banks and trust companies.
As the book observes, there will be a continuous stream of withholding developments from diverse directions. Therefore, in spite of the constant stream of promises from legislators of tax policy to simplify matters, the withholding tax requirements show how increasingly complex tax law is becoming. In fact, the growing complexity of withholding, the fact that requirements are written in technical tax terms, and the lack of translations for foreign professionals further complicate the ability and cost of compliance.
The lack of plain guidance opens the door to practitioners, such as Mr. Bruce, to develop practical guides. For the next few years at least, until developments make it outdated, this book will prove useful for legal and accounting advisers, private bankers, trust officers, investment advisers, and professors and students. In addition, compliance officers responsible for training the staffs of financial institutions, as they prepare for the first audits, also will benefit from the book.
Bruce Zagaris
Editor
International Enforcement Law Reporter