Global Tax Insights
Important Instructions for IRS Form W-8December 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”.