See Nonresident alien who becomes a resident alien, earlier, for a general explanation of saving clauses and exceptions to them. A transfer is a sale, exchange, or other disposition, and includes a distribution from a partnership to a partner, as well as a transfer treated as a sale or exchange under section 707(a)(2)(B). A participating payee means any person that accepts a payment card as payment or accepts payment from a third-party settlement organization in settlement of a third-party network transaction. A financial institution generally means an entity that is a depository institution, custodial institution, investment entity, or an insurance company (or holding company of an insurance company) that issues cash value insurance or annuity contracts. Most W-8 forms are valid through the last calendar day of the third year.
For a list of jurisdictions treated as having in effect a Model 1 or Model 2 IGA, see /resource-center/tax-policy/treaties/Pages/FATCA-Archive.aspx. Refer to Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities, for more information on these forms and documentary evidence. As used in this discussion, the term Form W-8 refers to the appropriate document. Generally, you must obtain the documentation before you make the payment.
Who Uses Form W-8?
According to the US Securities and Exchange Commission (SEC), a person may also be required to submit a W-8 form to claim an exception from domestic information reporting and backup withholding for certain types of income that are not subject to foreign-person withholding. A W9 form is provided to employees from an employer to verify the identity of the employee for tax purposes. Unlike a W8 form, it plays no role in applying for tax exemption or rate reduction status. The good news is that w8 forms definition you may be exempt from withholding taxes or be eligible for a reduced withholding rate based on the tax treaties your country of residence has with the US. See the Instructions for Form 8833 for more information on the filing requirements. New line 6b, “FTIN not legally required,” has been added for account holders otherwise required to provide an FTIN on line 6 (redesignated as line 6a) to indicate that they are not legally required to obtain an FTIN from their jurisdiction of residence.
In addition, certain nonprofits have more comprehensive reporting requirements, such as hospitals and other health care organizations (Schedule H). The Form 990 may be filed with the IRS by mail or electronically with an Authorized IRS e-file Provider. A substitute Form W-8 is valid only if it contains the same penalties of perjury statement and certifications as the official forms and the required signature.
However, if the substitute form is contained in some other business form, the words “information on this form” may be modified to refer to that portion of the business form containing the substitute form information. The design of the substitute form must be such that the information and certifications that are being attested to by the penalties of perjury statement clearly stand out from any other information contained in the form. A hybrid entity is an entity that is treated as fiscally transparent under the Code but is not treated as fiscally transparent under the tax laws of a country with which the United States has an income tax treaty. If the beneficial owner is required to explain the additional conditions in the treaty that it meets to be eligible for the rate of withholding on line 15, you may accept a brief explanation. You may accept a treaty claim without this explanation under an interest or dividends (other than dividends subject to a preferential rate based on ownership) article of a treaty or other income article, unless such article requires additional representations.
If Form W-8BEN is completed by an agent acting under a duly authorized power of attorney for the beneficial owner or account holder, the form must be accompanied by the power of attorney in proper form or a copy thereof specifically authorizing the agent to represent the principal in making, executing, and presenting the form. The agent should also check the box indicating that the agent has capacity to sign for the beneficial owner. The agent, as well as the beneficial owner or account holder, may incur liability for the penalties provided for an erroneous, false, or fraudulent form. Any person, U.S. or foreign, that has control, receipt, custody, disposal, or payment of U.S. source FDAP income subject to chapter 3 or 4 withholding is a withholding agent. The withholding agent may be an individual, corporation, partnership, trust, association, or any other entity, including (but not limited to) any foreign intermediary, foreign partnership, and U.S. branches of certain foreign banks and insurance companies. For purposes of chapter 4, a nonresident alien individual who holds a joint account with a U.S. person will be considered a holder of a U.S. account for chapter 4 purposes..
Payments should not be made until the withholding agent has your Form W-8 on file. Let’s say that a resident of another country purchases stock in a U.S. publicly-traded company, which pays dividends to the nonresident. A tax treaty exists between the U.S., and the nonresident’s country of origin, which states the income is not subject to withholding.
The certifications in Part II of Form W-8ECI must be included in a substitute form. An exception from section 1446(f) withholding applies to a foreign dealer that transfers a PTP interest if the foreign dealer provides Form W-8ECI and makes the certifications set forth on line 12 of such form. You may rely on the certifications made by the dealer for this purpose unless you have actual knowledge they are unreliable or incorrect. References to “chapter 3” in the Forms W-8 and their accompanying instructions were generally updated to exclude sections 1445 and 1446 (which those instructions addressed separately as applicable). Thus, references to “chapter 3” in these instructions similarly exclude sections 1445 and 1446..