IRS issues instructions for Form W-8BEN-E enabling foreign entities to comply with FATCA

July 2014
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IRS issues instructions for Form W-8BEN-E enabling foreign entities to comply with FATCA

At a glance

The instructions to Form W-8BEN-E provide clarification and relevant definitions in regard to the requirements for documenting and certifying a non-US entity’s status, which is essential for compliance with FATCA and other information reporting and withholding requirements

On June 25, 2014, the Internal Revenue Service released the instructions for Form W-8BEN-E, Certificate of Status of Beneficial Owner for United States Tax Withholding and Reporting (Entities). Form W-8BEN-E, which was issued without instructions in March 2014 (with a February 2014 revision date), is used by non-US entities to document their status as a payee under Chapter 4 and as a beneficial owner under Chapter 3 of the Internal Revenue Code. In addition, Form W-8BEN-E is used by non-US entities to document their entitlement to a reduced rate of withholding pursuant to an income tax treaty. An entity that does not document its Chapter 4 status (commonly referred to as its FATCA status) may be treated as a recalcitrant account holder or nonparticipating foreign financial institution, and subject to a 30% withholding when receiving certain withholdable payments.