Final version of instructions for Forms W-8BEN-E and 8966
The IRS has posted the final version of the instructions for Form W-8BEN-E, Certificate of Status of Beneficial Owner for United States Tax Withholding and Reporting (Entities) (Rev. June 2014).
The IRS previously released the final version of Form W-8BEN-E (PDF 263 KB). The form is intended to be completed by a non-U.S. entity who is certifying it is the non-U.S. beneficial owner of a payment of income for current withholding tax purposes (under Chapters 3 and 61) as well as to provide its FATCA status as either payee or account holder of a foreign financial institution (under Chapter 4).
The instructions for Form W-8BEN-E (PDF 226 KB) explain that Form W-8BEN-E—along with Forms W-8BEN, W-8IMY, W-8ECI, and W-8EXP—reflects the withholding and documentation requirements of Chapter 4 (also referred to as FATCA for the Foreign Account Tax Compliance Act).
- Under Chapter 4, foreign financial institutions (FFIs) that are participating FFIs—and certain registered deemed-compliant FFIs—are generally required to identify their U.S. account holders, regardless of whether a payment subject to withholding under Chapter 3 or Chapter 4 is made to the account.
- U.S. withholding agents and FFIs will be required to begin withholding under FATCA (Chapter 4) on certain payments beginning on 1 July 2014.
- Form W-8BEN-E is to be used exclusively by entities to document their status both as a payee under Chapter 4 and beneficial owner under Chapter 3 of the Code when required (including an entity eligible to claim treaty benefits for reduced withholding), and under certain other sections of the Code to establish their status for withholding or reporting purposes.
- Individuals documenting their foreign status (or making a claim of treaty benefits for reduced withholding) are to use Form W-8BEN instead of Form W-8BEN-E.
- An entity account holder holding accounts with certain FFIs that does not document its applicable Chapter 4 status when required may be treated as a recalcitrant account holder or nonparticipating FFI and will be subject to 30% withholding on withholdable payments it receives from the FFI. A foreign entity account holder can avoid being classified as a recalcitrant account holder or nonparticipating FFI by using Form W-8BEN-E to document its applicable Chapter 4 status.
- Chapter 4 also requires withholding agents to withhold on certain payments made to a foreign entity that does not document its Chapter 4 status and, in some cases, disclose its substantial U.S. owners. In general, a foreign entity receiving a withholdable payment is to provide Form 8-BEN-E when requested to avoid withholding consequences.
The IRS has released the final version of the instructions for Form 8966, FATCA Report.
Read text of the 12-page instructions for Form 8966 (PDF 227 KB).
The IRS earlier this year released the final version of Form 8966 (PDF 81 KB) which is to be used by financial institutions and withholding agents for reporting account holder information under the FATCA reporting requirements.
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