Form W8 series updated to comply with new tax requirements: PwC

While it may seem like just another piece of IRS paperwork, this form is important for businesses. The form should be returned to the company or entity that sent the form W-8BEN, not the IRS. Typically, the form should be submitted before the first payment is made. Form W-8BEN is used by foreign individuals who receive income from sources in the U.S. The version of the form used is determined by both whether or not the filer is an individual or a business and the nature of the income the filer received. The forms are effective for the year in which they are signed and three calendar years afterward.

What happens if employers and workers don’t submit a W-8 BEN form?

See Entities Providing Certifications Under an Applicable IGA under Special Instructions, later. You must give Form W-8BEN-E to the withholding agent or payer if you are a foreign entity receiving a withholdable payment from a withholding agent, receiving http://prognoz.org/article/prognozy-2007-neft-rynok-rubl a payment subject to chapter 3 withholding, or if you are an entity maintaining an account with an FFI requesting this form. Form W-8BEN-E may also be used to claim an exemption from withholding for portfolio interest pursuant to section 881(c).

Why Does the IRS Require Form W-8BEN?

The term chapter 4 status means a person’s status as a U.S. person, specified U.S. person, foreign individual, participating FFI, deemed-compliant FFI, restricted distributor, exempt beneficial owner, nonparticipating FFI, territory financial institution, excepted NFFE, or passive NFFE. An account holder is generally the person listed or identified as the holder or owner of a financial account. For example, if a partnership is listed as the holder or owner of a financial account, then the partnership is the account holder, rather than the partners of the partnership. However, an account that is held by a disregarded entity (other than a disregarded entity treated as an FFI for chapter 4 purposes) is treated as held by the entity’s single owner. Your employer should provide you a Form W-2, Wage and Tax Statement showing your total income and withholding. You must include all income and withholding from all Forms W-2 you receive on your tax return, and if filing jointly, you must also include all income and withholding from your spouse’s Forms W-2.

Who Should Fill Out a W8 Form?

• If you wish to report the name of a disregarded entity holding an account with the withholding agent requesting this form for only information purposes (that is, the disregarded entity is not reported on line 1 or in Part II of this form), you may enter the disregarded entity’s name on line 3..
• If the Country B branch receiving the payment is a disregarded entity you may be required to provide its legal name on line 3.
• If you are a disregarded entity or branch, do not enter your business name.
• A W-8 BEN form is a United States Internal Revenue Service (IRS) tax form used to determine the foreign status of non-resident aliens for the purposes of taxation.
• Form W-8BEN-E establishes the foreign entity status and tax withholdings of foreign companies that do business in the U.S.
• Give Form W-8 BEN to the withholding agent or payer if you are a foreign person and you are the beneficial owner of an amount subject to withholding.

As such, they are a critical part of a foreign individual or business’ tax minimization strategy. Individuals who are residents or resident aliens do not have to file a W8 form. The W-8 forms are IRS forms used to collect nonresident taxpayer information and for nonresidents to avail of tax treaties. We ask for the information on this form to carry out the Internal Revenue laws of the United States.

Instructions for the Requester of Forms W-8BEN, W-8BEN-E, W-8ECI, W-8EXP, and W-8IMY (06/

If the beneficial owner provides the separate statement after it has provided the Form W-8BEN, it must indicate that the statement relates to the applicable form. When subject to withholding of U.S. taxes, the single owner of a disregarded entity, NRA-classified account holder of a foreign financial institution (FFI), and the non-U.S. Transferor of an interest in a partnership for a connected gain are also required to file Form W-BEN.

• If you do not provide this form, the withholding agent may have to withhold at the 30% rate (under chapters 3 and 4), backup withholding rate, or the rate applicable under section 1446.
• If your company’s mailing address is the same as your permanent residence address, you can skip this section.
• These forms are requested by the payers or withholding agents and kept on file with them—not filed with the IRS.
• Generally, you may not treat an amount otherwise subject to withholding under chapter 3 or 4 as income effectively connected with the conduct of a trade or business within the United States unless the beneficial owner gives you a valid Form W-8ECI.
• A payment is considered to have been made whether it is made directly to the beneficial owner or to another person, such as an intermediary, agent, or partnership, for the benefit of the beneficial owner.
• Workers should submit a W-8 BEN form when requested by a withholding agent or payer (the employer), regardless of whether they are claiming a reduced rate of, or exemption from, withholding.

Income from transactions with a broker or a barter exchange is subject to reporting rules and backup withholding unless Form W-8BEN or a substitute form is filed to notify the broker or barter exchange that you are an exempt foreign person. A recalcitrant account holder includes an individual who fails to comply with the requests of an FFI for documentation and information http://www.den-za-dnem.ru/page.php?article=1930 for determining the U.S. or foreign status of the individual’s account, including furnishing this Form W-8BEN when requested. A PSE is a merchant acquiring entity or third-party settlement organization. Under section 6050W, a PSE is generally required to report payments made in settlement of payment card transactions or third-party network transactions.

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• If you do not have a tax residence in any country, your permanent residence is where you normally reside.
• Should none of those exemptions apply, the entity must file a W-8BEN or W-8ECI (if it received “effectively connected income”).
• The last form on our list (Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or Certain U.S. Branches for United States Tax Withholding and Reporting) is only used by intermediaries, flow-through entities, and certain U.S. branches.
• If the applicable treaty has no LOB article, the entity must check the box indicating no LOB article in the treaty.
• You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless the form displays a valid OMB control number.

Other persons may need to complete this line if they claim benefits that require them to meet conditions not addressed on W-8BEN. If you do not have an SSN and are not eligible to get one, you can get an individual taxpayer identification number (ITIN). To http://www.familiesforexcellentschools.org/news/press-release-cost-failure claim certain treaty benefits, you must complete line 5 by submitting an SSN or ITIN, or line 6 by providing a foreign tax identification number (foreign TIN). Provide Form W-8BEN to the withholding agent or payer before income is paid or credited to you.