Form W-8 for Foregin Entities (Non US Companies)

Form W-8 BEN-E, Certificate of Status of Beneficial Owner for United States Tax Withholding and Reporting (Entities) – link to form

Form W-8 BEN-E (PDF)

IRS Instructions

You should request Form W-8BEN-E from any foreign entity for the purposes described in instructions for Form W-8BEN or if the payee is to establish that certain income from notional principal contracts is not effectively connected with the conduct of a U.S. trade or business (for reporting on Form 1042-S).

Instructions for filling form:

Example is for non-US small businesses (not individuals) that are receiving payments from US companies (for example for their services).

Part I – Identification of beneficial owner
1. Name of organization
2. Country of incorporation or organization

4. Chapter 3 Status of your entity
For example your status can be Corporation. Mark only one option.

5. FATCA status of your entity
FACTA means Foreign Account Tax Compliance Act.
Most small companies are:  Active Non-Financial Foreign Entity (active NFFE)

6. Permanent residence address

8. Tax number
If you do not have U.S. taxpayer number (TIN) you fill your local tax number in Foregin TIN in b. section.

Part III – Claim of Tax Treaty Benefits
Regarding  your chapter 3 status (entity tipe) from part I of this form.

 FDAP income.

Part XXV – Active NFFE

Check the box 39

Part XXX – Certification
Signature in handwriting, first and last name and the date.

Disclaimer: This article is for general information purposes only and is not intended as tax advice.

US company must  determine whether that foreign entity is subject to the 30% default withholding on payments to foreign entities and whether the foreign entity is eligible for any reduced withholdings related to tax treaty.

Requesting Form W-8

Generally, if you are making a payment of an amount subject to chapter 3 withholding or a withholdable payment, you must withhold as required at the 30% rate under chapter 3 or 4 unless you can reliably associate the payment with a Form W-8 or other permitted documentation to permit withholding at a reduced rate or an exemption from withholding. You can reliably associate a payment with a Form W-8 if you hold a valid form that contains the information required for purposes of chapter 3 or 4 (as applicable), you can reliably determine how much of the payment relates to the form, and you may rely upon the form under the due diligence requirements.

You should request a Form W-8 from any person to whom you are making a payment that you believe to be a foreign person. You should request the form before making a payment so that you have the form when you make the payment. See, however, Regulations sections 1.1441-1(b)(7)(ii) and 1.1471-3(c)(7)(ii) for when you may be able to rely on a Form W-8 obtained after the date of a payment to support reduced withholding for chapter 3 or 4 purposes.

A withholding agent or payor that fails to obtain a valid Form W-8 or Form W-9 and fails to withhold as required under the presumption rules may be assessed tax at the 30% rate under chapter 3 or 4 or the 28% backup withholding rate under section 3406, as well as interest and penalties for lack of compliance. If you are a partnership allocating income that is effectively connected with the conduct of the partnership’s U.S. trade or business and you fail to withhold as required under section 1446, you will be liable for the tax required to be withheld. In addition, you may be liable for interest, penalties, and additions to the tax even if there is no underlying tax liability due from a foreign partner on its allocable share of the partnership’s ECTI.

If you are a withholding agent making a payment of an amount subject to chapter 3 withholding or a withholdable payment and you make the payment to an intermediary, you must obtain documentation from such intermediary (including the intermediary’s chapter 4 status if the payment is a withholdable payment), as well as any required documentation for the beneficial owner(s) of the payment to the extent required under the chapter 3 or 4 regulations.

Do not send Forms W-8 to the IRS. Instead, keep the forms in your records for as long as they may be relevant to the determination of your liability under section 1461 (for amounts subject to chapter 3 withholding), section 1474 (for withholdable payments), or Regulations section 1.1471-4(c)(2)(iv) (for an FFI documenting account holders).

Form W-8 provided or signed electronically.

You may rely on a valid Form W-8 received by facsimile or scanned and furnished to you by email unless you know that the person transmitting the Form W-8 is not authorized to do so.

You may also rely on an otherwise valid Form W-8 received electronically from a third-party repository if the form was uploaded or provided to the third-party repository and there are processes in place to ensure that the withholding certificate can be reliably associated with a specific request from you and a specific authorization from the person providing the form (or an agent of the person providing the form) for you to receive the withholding certificate. You may also rely on a withholding statement received from a third-party repository if the intermediary provides a Form W-8IMY and withholding statement through the repository, provides an updated withholding statement to you in the event of any change in the information previously provided, and ensures there are processes in place to update you when there is a new withholding statement (and Forms W-8, as necessary) in the event of any change that would affect the validity of the prior forms or withholding statement. For purposes of this paragraph, a third party repository is an entity that maintains withholding certificates but is not an agent of the applicable withholding agent or the person providing the certificate. See Regulations section 1.1441-1(e)(4)(iv)(E) for the complete requirements for relying on a withholding certificate from a third-party repository.

If you are a withholding agent that maintains a system for furnishing Forms W-8 electronically, you must satisfy the requirements of Regulations section 1.1441-1(e)(4)(iv)(B). You may otherwise accept a Form W-8 with an electronic signature if the Form W-8 reasonably demonstrates that the form has been electronically signed by a person authorized to do so (for example, with a time and date stamp and statement that the form has been electronically signed). You may not treat a Form W-8 with a typed name in the signature line as validly signed without further information supporting that the signature is an electronic signature.

Validity

Generally, a Form W-8 is valid from the date signed until the last day of the third succeeding calendar year unless a change in circumstances occurs that makes any information on the form incorrect. For example, a Form W-8BEN signed on September 30, 2018, generally remains valid through December 31, 2021. However, under certain conditions a Form W-8 will be valid indefinitely unless there has been a change in circumstances. For example, a Form W-8BEN and documentary evidence supporting an individual’s claim of foreign status (other than the portion of the form making a claim for treaty benefits) are indefinitely valid if the form and documentary evidence are provided within 30 days of each other. A Form W-8BEN-E and documentary evidence supporting an entity’s claim of foreign status (other than the portion of the form making a claim for treaty benefits) that are received by a withholding agent before the validity period of either the form or the documentary evidence would otherwise expire are indefinitely valid.

Presumption Rules

If you do not receive a valid Form W-8 or Form W-9 that you may rely upon under the due diligence requirements, or cannot otherwise determine whether a payment should be treated as made to a U.S. or foreign person, you must apply the presumption rules provided in the Regulations under sections 1441, 1446, 1471, 6045, and 6049. If the presumption rules are applied to treat a person as a foreign person, the 30% withholding rate applies and cannot be reduced (for example, no treaty rate). You may not rely on the presumption rules if you have actual knowledge that a higher withholding rate is applicable. If you determine that you are making a withholdable payment to an entity and cannot reliably associate the payment with a Form W-8 or other permitted documentation that is valid for chapter 4 purposes, you are required to treat the entity payee as a nonparticipating FFI.