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  • Industry: Financial Services, Financial Services, Aviation Finance & Leasing, Banking & Finance, Insurance, Investment Management
  • Type: Business and industry issue, KPMG information
  • Date: 27/06/2014

FATCA: US Department of the Treasury release W-8BEN-E guidance 

The long awaited Instructions for the Form W-8BEN-E have been released by the IRS. The instructions confirm that the Form W-8BEN-E can be used by Irish tax resident entities to ensure that 30% FATCA withholding tax does not arise on certain US source withholdable payments.

 

The Form can also be used to capture or provide details of an entity’s FATCA status.

 

Some other notable comments/clarifications with respect to the Form W-8BEN-E highlighted in the instructions are outlined below:

Validity Period

  • The Form will generally remain valid for a period ending on 31 December in the year which is 3 years after the Form is signed (E.g. A Form signed on 30 September 2014 will remain valid through to 31 December 2017).
  • In certain cases, including where a GIIN is provided, the Form W-8BEN-E may remain in effect indefinitely. 
  • No additional clarification was provided with respect to the interaction of the new Form W-8BEN-E and existing Form W-8BENs which are already in place; further clarification is pending. 
  • If there is a subsequent change in circumstances that renders the information contained in the Form incorrect, an entity has 30 days from the change in circumstances to file a new Form W-8BEN-E.

 

Form W-8BEN-E Completion

  • ·Although more than one box could potentially apply, only one FATCA status should be selected on the Form W-8BEN-E. Therefore, Irish tax resident entities must endeavour to select the box that best reflects their FATCA status.
  • On or after 1 January 2015, a GIIN must be provided on the Form W-8BEN-E for all Reporting Model I IGA FFIs. If a GIIN has been applied for, but not yet received, an Irish tax resident entity can note “applied for”.
  • Depending on the FATCA status selected, additional certifications are required in the remainder of the form. The majority of these certifications simply involve ticking a box attesting that the detailed conditions set out in the US Regulations have been met.
  • In certain limited circumstances, an alternate certification can be provided in lieu of providing the FATCA status certifications outlined on the Form W-8BEN-E. 
  • For Passive NFFEs, there remains some uncertainty regarding the percentage ownership threshold for disclosing US owners of that entity, as the ownership thresholds in the US Regulations (i.e. 10% or more) are not imported into the Model I IGA definitions, which use alternative guidance.

 

Irish Regulations on FATCA (Pending)

The Final Irish Regulations on FATCA are expected to be released in the coming weeks and are likely to include a number of updates, including two additional FFI classifications.

 

Should you require assistance with the completion of the Form W-8BEN-E, please contact Kevin Cohen, Rachel Hewitt or another member of your KPMG team.

 

FATCA contacts

Kevin Cohen, FATCA partner

Kevin Cohen

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Partner - FATCA 

kevin.cohen@kpmg.ie
+353 1 410 2369

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Rachel Hewitt

Rachel Hewitt
Manager, Tax  

rachel.hewitt@kpmg.ie

+353 1 700 4392

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FATCA & its impact on your business

The Foreign Account Tax Compliance Act (“FATCA”) requires Foreign Financial Institutions (“FFIs”) to register and report information on accounts held by US persons and certain US controlled foreign entities.  Failure to comply will result in a 30% withholding tax penalty on certain US sources of income beginning 1 July 2014.

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