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Important Instructions for IRS Form W-8

December 26, 2014

IRS releases specific instructions for form W-8BEN-E for companies in business with foreign entities.

Companies paying foreign vendors for services or products, are undoubtedly familiar with form W-8, but be aware that the new Form W-8BEN-E replaces the previous W-8BEN form for both foreign individuals and entities. As of January 1, 2015, Form W-8BEN will be used for foreign individuals only, while the new Form W-8BEN-E will be used for foreign entities. In addition to claiming treaty benefits on interest, dividends, and royalties, the new form is also the place to claim any payments made to a foreign vendor that are fixed and determinable, annual and periodical.

Requirements of form W-8BEN-E

The new form requires your entity to fill in:

  • Identifying information
  • What type of entity it is
  • FATCA status –typically active or passive NFFE (non-financial foreign entity)
  • Additional areas depending on FATCA status

A properly filled out W-8BEN-E form is important since incorrect submission will result in the 30% withholding requirement. For a more detailed description of the new form read our article, “Instructions for Foreign Vendors on how to properly fill Out Form W-8”.

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