This article was coauthored by Ken Kobayashi and Cynthia Hoffman.
Form W-8 BEN-E, Certificate of Status of Beneficial Owner for United States Tax Withholding and Reporting, is used by foreign entities that receive a withholdable payment from a U.S. withholding agent to provide its FATCA status and to request a reduced rate or elimination of withholding under an income treaty. All U.S. persons making a withholdable payment to a foreign person MUST receive a completed form W-8 BEN-E from the foreign entity to determine if tax withholding under FATCA is applicable. Form W-8BEN-E is a new form issued in 2014 as a result of withholding rules under FATCA.
The Form W-8BEN-E will replace the former Form W-8BEN for foreign payees that are not individuals. Form W-8BEN has been revised and now only applies to individuals. In general, previous Forms W-8BEN will remain valid for a period starting on the signed date to the last day of the third succeeding calendar year. However, the U.S. payor must request the additional information on the new Form W-8BEN-E, including the FATCA classification for the foreign person. In lieu of this additional step, it may be best to request new Form W-8BEN-E to replace the existing form.
Going forward, the new Form W-8BEN-E will generally be valid for a period starting the signed date to the last day of the third succeeding calendar year. For example, if W-8BEN-E was signed on October 1, 2014, the form will be valid until December 31, 2017.
W-8-BEN-E is now eight pages long, and more than 20 new FATCA entry classifications are added. All U.S. taxpayers who make payments to foreign entities should review their current procedures to comply with the new rules.
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