FATCA Alert: IRS Issues Final Version of the Form W-8BEN-E and Accompanying Instructions

On June 25, 2014, the IRS finally issued the instructions to the new version of Form W-8BEN-E, an 8-page withholding certificate to be completed by foreign entities. Previously, foreign individuals and most foreign entities would provide a one-page Form W-8BEN to withholding agents to certify the foreign entity’s entity classification (Chapter 3) status for tax purposes and to claim reduced rates of withholding under an applicable tax treaty.

Now, foreign individuals will continue to use a similar one-page Form W-8BEN. However, most foreign entities must complete the new eight-page Form W-8BEN-E , which requires the foreign entity to also determine its FATCA (Chapter 4) status from a list of 31 different FATCA compliance categories. Each category contains several specific criteria that the foreign entity must satisfy in order to certify its method of FATCA compliance under penalties of perjury.

Due to the late release of the new Form W-8BEN-E and the accompanying instructions, the IRS is permitting withholding agents to accept Form W-8BEN until December 31, 2014 from entities without FATCA withholding penalties. However, it is recommended that withholding agents request the new form W-8BEN-E from account holders sooner rather than later so that accountholders have ample time to consult with their tax advisors regarding their FATCA compliance obligations. In late July 2014, the IRS also issued requestor instructions for the new Forms W-8.

The new Form W-8BEN-E is available online here.  The accompanying instructions to the Form W-8BEN-E are available here.  Instructions for the requestor of a Form W-8 are available here.