Distributions to Non-U.S. Partners. The U.S. Foreign Account Tax Compliance Act (FATCA) imposes a 30% withholding tax on U.S. persons holding offshore accounts on certain “withholdable payments” to “foreign financial institutions” which do not provide information about their U.S. accounts to the IRS. A “withholdable payment” is generally any U.S. source income, such as interest, dividends, rents, royalties and other fixed or determinable income. A Limited Partner that is not a “United States person” (as defined in Code Section 7701(a)(30)) will generally be required to provide the Partnership information which identifies its direct and indirect U.S. ownership. Any such information provided to the Partnership will be shared with the IRS. A non-U.S. Limited Partner that is a “foreign financial institution” within the meaning of Section 1471(d)(4) of the Code will generally be required to enter into an agreement with the IRS identifying certain direct and indirect U.S. account holders or equity holders. A non-U.S. Limited Partner who fails to provide such information to the Partnership or enter into such an agreement with the IRS, as applicable, would be subject to a 30% withholding tax with respect to its share of any such payments attributable to actual and deemed U.S. investments in the Partnership and the General Partner may take any action in relation to a Limited Partner’s interests or redemption proceeds to ensure that such withholding is economically borne by the relevant Limited Partner whose failure to provide the necessary information gave rise to the withholding.
Distributions to Non-U.S. Partners. The U.S. Foreign Account Tax Compliance Act (FATCA) imposes a 30% withholding tax on U.S. persons holding offshore accounts on certain “withholdable payments” to “foreign financial institutions” which do not provide information about their U.S. accounts to the IRS. A “withholdable payment” is generally any U.S. source income, such as interest, dividends, rents, royalties and other fixed or determinable income. Additionally, beginning in tax year 2019, gross proceeds from the sale of items that would create fixed, determinable, annual, or periodical income are also subject to withholdable payments. A Limited Partner that is not a “United States person” (as defined in Code Section 7701(a)(30)) will generally be required to provide the Partnership information which identifies its direct and indirect U.S. ownership. Any such information provided to the Partnership will be shared with the IRS. A non-U.S. Limited Partner that is a “foreign financial institution” within the meaning of Section 1471(d)(4) of the Code will generally be required to enter into an agreement with the IRS identifying certain direct and indirect U.S. account holders or equity holders. A non-U.S. Limited Partner who fails to provide such information to the Partnership or enter into such an agreement with the IRS, as applicable, would be subject to a 30% withholding tax with respect to its share of any such payments attributable to actual and deemed U.S. investments in the Partnership and the GP may take any action in relation to a Limited Partner’s interests or redemption proceeds to ensure that such withholding is economically borne by the relevant Limited Partner whose failure to provide the necessary information gave rise to the withholding.
