Funds that invest in foreign securities face a host of tax issues ranging from withholding on interest, dividends and capital gains to evaluating the fund’s exposure under FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes (FIN 48). In the last several years, there have been significant developments in the treatment of interest, dividends and capital gains derived by funds in non-U.S. securities. In this guest three-part series, Harold Adrion of EisnerAmper discusses issues relating to foreign withholding taxes and FIN 48 exposure applicable to hedge funds. This first article explains FIN 48 and explores E.U. developments regarding free movement of capital and its impact on funds. The second article will address the limited exemption from capital gains taxation of non-residents announced by China, and other issues faced by non-resident investors. The third article will discuss developments in Australia and Mexico, and how hedge funds can minimize exposure to withholding taxes. For additional coverage of withholding tax issues pertaining to hedge funds, see our two-part series on the new Section 871(m) regulations: Part One (Jan. 21, 2016); and Part Two (Jan. 28, 2016). For further insight from EisnerAmper professionals, see “Accounting for Uncertain Income Tax Positions for Investment Funds” (Jan. 14, 2011).