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IRS Releases Instructions for FATCA Form

August 07, 2014

Instructions on reporting and withholding for foreign persons.

The IRS has recently issued instructions for filing Form W-8BEN-E, "Certificate of Status of Beneficial Owner for United States Tax Withholding and Reporting (Entities)". Through the form, entities can document their status as recipients and beneficial owners for FATCA purposes.

What's included in the new instructions?

Form W-8BEN-E deals with chapters 3 and 4 of the Internal Revenue Code (IRC) and there are a number of newly released instructions including:

  • Before income is paid or credited, the form should be provided to the withholding agent or payer. If you fail to present a form when requested, it could lead to 30% withholding rate (foreign-person withholding rate) or the backup withholding rate under IRC Section 3406.
  • The form is to be provided to the person requesting it from the taxpayer. This is typically the person who makes the payment and credits the taxpayer's account.

For foreign entities in the private sector, full compliance with form W-8BEN-E is vital. For the full list of instructions, and a more detailed explanation of the form's requirements, read our article "Long-awaited Instructions for FATCA Form Issued".

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