IRS releases final form W-8BEN-E for entities

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IRS releases final form W-8BEN-E for entities

Closing the distance

On March 29, 2014, the IRS announced the release of the final Form W-8BEN-E, “Certificate of Status of Beneficial Owner for United States Tax Withholding and Reporting (Entities).

Overview

The updated form will be used by foreign entities to certify their status under FATCA and chapter 3, as well as their entitlement to treaty benefits. No instructions were published with the form itself. The form is eight pages long (the current final Form W-8BEN is only one page) and changes include the new chapter 4 classifications introduced in the final and temporary FATCA regulations as well as modifications to the certifications pertaining to such classifications.

Now that the Form W-8BEN-E has been finalized, withholding agents have six months to begin using it to document payees and account holders. Note that it is unclear whether withholding agents should count from the date the form was published (March 28) or from the version date of the form (February), but targeting August 1, 2014 should be a safe decision unless or until additional clarifying guidance is provided.

Non-financial withholding agents and accounts payable departments should also consider whether they should resolicit documentation from existing payees that are not receiving FATCA withholdable payments using the current Form W-8BEN (2006). Because such withholding agents generally make payments that are not subject to chapter 4 withholding, they will not need to collect the additional information for FATCA contained on the new Form W-8BEN-E.

Therefore they can rely on the older Form W-8BEN (2006) until it sunsets in August. Using the older form will allow them to rely on the form until it expires (generally three years after the year it is signed) before having to collect the longer and more complicated Form W-8BEN-E. Withholding agents with FATCA withholdable payments should begin modifying any current or in process systems, processes, and procedures to accommodate the updated final form.

Read the full update for an overview of the modifications to the final Form W-8BEN-E compared to the May 20, 2013 draft released last year. 

(PDF - 236 KB)
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