PEQ QI Responsible Officer Certification FAQ

Dieses FAQ ist nur in Englisch verfügbar.


Last updated: November 29, 2018


Please be advised that this FAQ only consists of information known to PEQ at the time of its publishing. The questions and answers are provided in good faith for general information purposes only.

This FAQ is addressed to Responsible Officers (“RO”) of QIs that are performing their Periodic Certification of Effective Internal Controls or Qualified Certification (the “Certification”) as required under Section 10.03 of the QI Agreement. Notwithstanding the global applicability of the QI Agreement, we have addressed certain elements of this FAQ specifically to Reporting Model 2 FFIs that are required to certify under FATCA.

Please note that the FATCA Certification is not part of this FAQ. Please refer to our PEQ FATCA Responsible Officer Certification FAQ for information about the FATCA Certification. 

1. Who has to certify, and when?

Apart from rare exceptions, all ROs of QIs are required to perform the Periodic Certification of Effective Internal Controls or the Qualified Certification. The certification can only be performed by the QI’s RO. 


The certification deadline is dependent on when the QI entered into its QI Agreement. If the QI Agreement has been in place since 2014 and subsequently renewed in 2017, the QIs initial certification period is the period from the date the QI signed the QI Agreement until December 31, 2017 (2014-2017). For those QIs, the deadline for the certification is September 1, 2018 (extended automatically from July 1, 2018), EXCEPT if the QI elects to perform the Periodic Review for review year 2017 and specifies that review year before September 1, 2018 in the QI/WP/WT system. In that case, the deadline for the certification is March 1, 2019 (extended automatically from December 31, 2018).


You can (and should) verify your certification due date on the dashboard of the QI/WP/WT system under “Certification Due Date”.


If you are a Compliance QI of a Consolidated Compliance Group (CCG), please contact us for specific instructions.


Be advised that QIs that are QDDs are NOT required to make the certification of internal controls as applicable to their QDD activities for the certification periods ending in calendar year 2017. They are required to certify for this period that they have made a good faith effort to comply with the relevant provisions of the QI Agreement in accordance with Notice 2016-76. A QDD is not required to file this “good faith” certification with the IRS; however, a QDD must retain a record of this certification (and information in support of the certification) until the end of the calendar year 2022.

2. How do I certify?

Formally, the QI certification can be initiated on the QI/WP/WT system under “QI, WP, or WT certification” in the Activity Center on the dashboard. The certification process mainly consists of checkboxes which need to be checked by the RO (and only the RO). 


In addition to adequately documenting the certification process, we strongly recommend that you make sure that you have supporting documentation on file to document the decisions made during the certifications. For example, the first statement of the certification of internal controls (Step 1 of Part 2) requires the RO to certify that the QI has established a compliance program that meets the requirements of the QI Agreement. If a RO certifies to this, we recommend sufficiently documenting how, when, and in what way such a program has been implemented and how it is being maintained.

3. My certification is not due any time soon. So I do not have to do anything now, correct?

Unfortunately, no. At a minimum, if your certification period is 2014-2017, you must select your review year in the QI/WP/WT system before September 1, 2018 regardless of when your certification is due. Also refer to Question 4.

4. What do I, as QI Responsible Officer, have to consider before I start the QI certification?

Before starting the certification, you need to be aware and make sure that:


  • You are able to log into the QI/WP/WT system and that the information contained in the system is current and accurate. If you are not able to log in, please contact the QI/WP/WT system support desk.
  • You have verified that the QI Agreement has been renewed and the renewal status approved. You can verify the renewal status on the dashboard of the QI/WP/WT system under “Renewal of Agreement Information”. The “Renewal Status” should not be anything other than “Approved”.
  • If you intend to apply for a Waiver of the Periodic Review for your QI, you have selected 2015 as the year for the Periodic Review before starting the certification. Also refer to Question 9.
  • IMPORTANT: You have selected your QI’s review year for the Periodic Review before September 1, 2018, regardless of which review year you choose. If you choose 2017 as your review year, select year 2017 in the system, save, and perform the rest of the certification at a later date when it is due. 
  • IMPORTANT: If you intend to apply for a Waiver of Periodic Review, the 1042 reporting for 2017 has been filed with the IRS before September 1, 2018. The official deadline for the Form 1042 reporting (after being granted a form 7004 extension) is September 15, but the IRS has made comments that no waiver applications will be granted without the timely submission of the 2017 form 1042 reporting before the waiver application on September 1, 2018. Please note that this restriction only applies to Waiver applications, not if a Periodic Review was performed for year 2015 and 2016, where the certification deadline is also September 1, 2018. The deadline for submittal of the 2017 form 1042 in this case is still September 15, 2018.
5. What parts of the certification do I have to complete?

The QI/WP/WT system is very straightforward and will guide you through the certification process. Generally speaking, 


  • If you performed a periodic review, fill out Parts 1, 2, 4, 6, & 7
  • If you did not perform a periodic review and are applying for a waiver, fill out Parts 1, 2, 3, 6, & 7.


Part 5 for QDDs has been postponed until the next certification. 

6. How should I understand the set-up of the “Certification of Effective Internal Controls” in Part 2? Do I have to certify all the statements and check all the boxes?

In Step 1 of the Certification (Part 2), certify ONLY those statements that you can either 

  1. certify because you are able to certify that you fulfilled the requirements of the statement you have to confirm, OR
  2. certify because the statement is not applicable to your QI.

If you cannot certify every statement in this step under either reason (1) or (2), you are required to perform a qualified certification and will by guided automatically to such a certification by the QI/WP/WT system. 


Under (2), for example, you may certify statement number 5 (where the RO certifies with respect to PAI and agency accounts that they have provided documentation to review or a certification) if you do not have accounts held by PAIs or accounts where you apply the agency option. 


We have also received confirmation from the IRS that you can and should certify statement number 8 (where you certify that a Periodic Review in accordance with section 10.04 was conducted), even though you intend to apply for a waiver and have therefore not performed such a review.

7. What is the purpose of Part 7 of the QI certification, where QI ROs are able to upload supporting files and documentation? Is this part mandatory?

The IRS strongly encourages QI ROs to upload documentation to support certifications and statements made during the certification. Even though the certification process might imply (with the “*indicates required field” element) that this part may be mandatory, it is not. It is also not mandatory to upload a Periodic Review Report, though an RO is free to do so. If you do not change the drop-down menu from “Select one” under “Type of file”, you will be able to skip this section. 


Even though it is not mandatory to upload files, we nevertheless recommend providing supporting documentation in the following instances:


  • If there have been material failures and/or events of default, and the description made in the certification may not be sufficient and/or in need of further evidence or a remediation plan.
  • If the Periodic Review was performed by using a sampling method other than the Safe Harbor Method.
  • If the results of the Periodic Review Report would not be adequately reflected by only providing the numbers in Part 4 of the certification.
  • If the QI RO certifies for a Consolidated Compliance Group (CCG).
8. The Periodic Review Report included an amount of underwithholding for the review year. Am I required to pay this amount to the IRS? How do I disclose this during my certification?

If the Periodic Review Report identified accounts where the QI underwithheld (for example due to uncured errors in documentation), you are required to amend the Form 1042-S/1042 reporting for the review year to report the underwithholding to the IRS, and to subsequently pay the amount to the IRS. 


You disclose the underwithholding and amendment in Step 3 of the Certification (Part 2), where you check “Yes” to confirm that you amended the Form 1042 based on the results of the Periodic Review, and in fields “Additional withholding required under chapter 3/4 based on results of periodic review” in Section “Withholding” of Part 4 of the certification. Please note that the amount you have to amend may not be that same as the amount of additional withholding, because the information disclosed in Part 4 of the certification is based on the review and not results obtained after curing.

9. How do I apply for a waiver of performing a QI Periodic Review?

If you are applying for a waiver, the IRS has indicated that you should select periodic review year 2015 before starting the certification. Should you have erroneously selected a year other than 2015 and apply for a waiver of performing a QI Periodic Review, we have received comments by the IRS that the waiver application will not be denied (only) for not selecting year 2015. 


You apply for a waiver of performing a QI Periodic Review in Part 3 of the certification. Check all the boxes that apply in Part A to verify the QI’s waiver eligibility. If you unable to check all the boxes in the eligibility part, you are not eligible to apply for a waiver and are required to perform a Periodic Review. Please also refer to Question 11 of this FAQ when certifying statement number 5 with respect to the periodic certifications and reviews required under FATCA.


Part B of the waiver application requires an RO to fill in applicable data for the most recent calendar year. Please also take into consideration the following comments for Part B:


  • In the first statement, you are required to provide the “total number of accounts”. The number of accounts is NOT the total number of accounts held by the QI, but instead the total number of accounts for which the QI acts as QI, or those accounts to which the QI has represented to be acting as QI. This rule applies to all the information you have to provide under Part B.
  • Under Step 3 you are requested to indicate “the total number of such accounts that have valid documentation”. It is unclear what original number is referenced with “such”. We assume that the IRS wishes to know how many of the total number of account holders that received U.S. reportable payments or amounts (both U.S and non-U.S.) have valid documentation.
  • Please note that all the information with respect to valid or invalid/no documentation must reflect the situation during the most recent calendar year within the certification and not the situation after curing.
10. What happens when my application for a waiver of performing a QI Periodic Review is denied?

This question has been answered by the IRS in its FAQ. If a waiver request is denied, the QI will be granted a six month extension from the date of denial of the waiver to complete the periodic review and resubmit the certification.

11. How should I certify the FATCA parts of the QI Certification if the FATCA certification has not been performed yet?

The QI RO Certification references in various sections the QI’s responsibilities under FATCA. For instance, Step 8 of the certification in Part 2 requires a QI RO to indicate the Chapter 4 eligibility of the QI and the certification type the QI as an FFI has made. 


As the FATCA certifications are not yet due, and due to the fact that for this period many QIs will certify under QI before they certify under FATCA, the IRS has indicated that the QI RO may indicate in Step 8 what type of FATCA certification the QI/FFI intends to make. The IRS stated that it will compare the statement made in the QI certification with the certification made under FATCA after both certifications have been performed by the respective ROs.


We assume that this approach is applicable to all elements of the QI certification where references to the QI’s FATCA compliance exist.

12. What is the difference between a Material Failure and an Event of Default? When would an occurrence be considered “material”?

The QI Agreement distinguishes between so-called Material Failures and Events of Default. A Material Failure is generally a failure of the QI to fulfill the requirements of the QI Agreement (or the FATCA requirements). The QI Agreement provides an extensive list of possible failures under Section 10.03(B)(1). If you identify a Material Failure, you are required to disclose it during your certification either: 

  1. as part of the certification of effective internal controls in Step 4 of Part 2 of the certification, if you have corrected the failure before the certification, or
  2. as part of the Qualified Certification if the Material Failure has not been corrected yet or cannot be corrected and you are therefore rendered unable to certify Statement 3 of the Certification of Effective Internal Controls in Step 1 of Part 2 of the certification.

An Event of Default occurs if the QI failed to perform any material duty or obligation required by the QI Agreement and the RO had actual knowledge of that failure, or should have known of the facts relevant to that failure to perform any material duty. There is an extensive (but not conclusive) list of Events of Default under Section 11.06 of the QI Agreement. Either the occurrence of an Event of Default or not correcting a Material Failure requires the RO to perform a Qualified Certification (which in turn makes the QI ineligible to apply for a waiver of performing a Periodic Review).


Distinguishing Material Failures from Events of Default will require a QI RO to make judgement calls. For example, a failure to withhold an amount required to be withheld could be considered a material failure under 10.03(B)(1)(iv)(a) or an Event of Default under 11.06(B). The difference in wording between the two referenced paragraphs is the word “material”, which is not defined in the QI Agreement. It is therefore within the responsibility (but also within the authority) of the RO to decide what is “material” and adequately disclose to the IRS the occurrence in a way the RO deems necessary and adequate.

13. When and how should I disclose a Material Failure or an Event of Default?

The IRS has made very clear that disclosing a failure is better than omitting it and having the IRS find out afterwards. We recommend that you disclose any event during the certification period which might have had an effect on your compliance with the QI Agreement (or your FATCA requirements, if applicable). Our message is that if you are in doubt whether to disclose an event or not, you should disclose it. 


If events occurred during the certification period which you deem necessary to disclose, you can do so by either making a qualified certification (if the event is considered an Event of Default or could not be corrected before the certification), or, if it is a material failure, by disclosing the failure in Step 4 of Part 2 of the certification. If you have supporting documentation, we recommend attaching it in Part 7 of the certification.

14. How does a Material Failure or Event of Default under FATCA have influence on the QI certification?

A Material Failure or Event of Default under FATCA may have a significant impact on the QI Certification in that:


  • It may render you unable to make the required certification under Statement 3 of the Certification of Effective Internal Controls (Step 1, Part 2).
  • It may be considered a Material Failure under QI, as illustrated in 10.03(B)(1)(i) or 10.03(B)(1)(iv)(g) of the QI Agreement.
  • It may be considered an Event of Default as illustrated in Section 11.06(F) of the QI Agreement.
  • You must disclose that the QI had (or will have) a Qualified Certification under FATCA in Step 8 of Part 2 of the QI certification.

Please be advised that for all elements of the certification, a QI certifies its compliance with FATCA ONLY where it acts as QI. If, for example, you have FATCA failures on accounts for which you are not acting as QI, you are not required to include these failures in your QI certification. You will, however, have to consider them for your FATCA certification.





DISCLAIMER: Please be advised that the information contained in this FAQ does not raise a claim to completeness and does not constitute tax advice. It contains no official guidance from the IRS and only consists of information known to PEQ at the time of its publishing. In addition, to ensure compliance with IRS Circular 230, any U.S. federal tax advice provided in this communication is not intended or written to be used, and it cannot be used by the recipient or any other taxpayer (i) for the purpose of avoiding tax penalties that may be imposed on the recipient or any other taxpayer, or (ii) in promoting, marketing or recommending to another party a partnership or other entity, investment plan, arrangement or other transaction addressed herein. 

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