What Is a QI Agreement?
A QI Agreement is a US withholding contract under which a foreign intermediary agrees with the IRS to document, withhold and report on US-source payments.
Also known as: Qualified Intermediary Agreement, QI Withholding Agreement.
How QI Agreement works
A QI Agreement is the contract, currently set out in IRS Revenue Procedure 2022-43 for agreements applying from 1 January 2023, under which a foreign bank, broker or other intermediary becomes a Qualified Intermediary and acts as a withholding agent for US-source payments received on behalf of its account holders. The agreement generally allows the intermediary to rely on its own anti-money-laundering and customer due diligence documentation instead of passing each client's withholding certificate up the payment chain. In exchange, the intermediary accepts withholding and information reporting duties under US chapters 3 and 4, plus a compliance programme with a periodic certification and review every three years.
QI Agreement vs Qualified Intermediary (QI)
Unlike a Qualified Intermediary, which is the status held by the institution, the QI Agreement is the contract itself, setting the duties, procedures and review cycle on which that status depends.
Example
Illustrative example: A private bank in Country A holds US shares for clients living in several countries. After signing a QI Agreement, the bank collects residence documentation from each client, applies the withholding rate matching each documented status on US dividends, and reports to the IRS under the agreement rather than disclosing every client to the US custodian.
Common misconception
Myth: Holding US securities at a bank with a QI Agreement exempts the income from US withholding.
Reality: A QI Agreement changes who documents and withholds, while the rate on each US-source payment still depends on the account holder's status, documentation and any applicable treaty.
Frequently asked questions
What is a QI agreement with the IRS?
A QI Agreement is a contract between the IRS and a foreign intermediary, set out for current agreements in Revenue Procedure 2022-43, under which the intermediary assumes documentation, withholding and reporting duties for US-source payments.
How often must a QI certify compliance?
A Qualified Intermediary operating under a QI Agreement makes a periodic certification, including a periodic review of its compliance programme, every three years, according to IRS guidance on the QI system.
Related terms
- Qualified Intermediary (QI) — Status an institution obtains by signing the agreement
- Withholding Agent — Role a QI assumes for US-source payments
- Form W-8IMY — Form intermediaries give upstream payers to claim QI status
- FATCA (Foreign Account Tax Compliance Act) — Chapter 4 regime embedded in QI obligations
- Treaty Withholding Rate — Reduced rate a QI may apply to documented clients
Related guides
- Global tax reform and US digital nomads — US tax context for internationally mobile investors
- Tax treaties and international taxation — Treaty rates applied through intermediary documentation
Sources
Last verified: 2026-10-09. This entry is general information, not tax or legal advice; rules vary by country and change over time.
