Since the property or income of foreign legal entities in the United States is taxed at 30% in some cases, there are special IRS Forms that regulate taxation. Form W-8BEN-E, last updated in July 2017, aims at reporting foreign legal entities to the Revenue Service.
It is one of the largest IRS forms, containing 30 parts on 8 pages. Therefore, when filling out the form, it is preferable to use our online document builder before the printed format so that you could easily correct errors. And to avoid any mistakes, read our comprehensive review to learn more about how the form works and how to complete it.
Only foreign legal entities use the Form to confirm their status in the United States and conduct their activities legally and with the support of the law. If you are a foreign legal entity, you must submit this File to the IRS office or the Foreign Financial Institution (FFI) if it requests this paper.
The primary concept of the document is “beneficial owner.” Here, it is a legal entity that includes tax in the amount of gross income and indicates this in its tax return in accordance with the US tax codes. The beneficial owners of the company’s income paid to a foreign company are usually the company’s partners. These partners themselves must not have the status of a partnership, foreign trust, nominee, intermediary, or trustee. Beneficial ownership within the Form usually implies gains of a partnership or trust.
Accordingly, under U.S. law, a foreign legal entity means that a firm has a status of a foreign corporation, or partnership, or estate. Also, the definition includes a foreign branch or office of a financial institution. In general, a payment to a branch of a foreign entity is a payment to a foreign entity. For additional information about the categories and statuses of legal entities under the Form, see the “Definitions” section of the official instructions.
The IRS has a number of forms that have similar functions but still differ depending on the status of the filler. Do not confuse Form W-8BEN-E with other forms for tax reports in the following cases if you have a particular status as stated below:
These are some of the prominent cases when you need to choose a different form. It is explained in more detail in the official instructions that accompany the W-8BEN-E Form.
Submit the form to the IRS or FFI employee before you receive or credit the income. Otherwise, the tax agent may withhold the tax in the amount of 30% or at an additional tax rate. For different types of income, the tax agent may request several forms from you, one for each type, respectively. Usually, each withholding agent requires a separate Form.
To make sure that you are using the Form for its intended purpose, read the warning in the very first part of the document. Pay attention to the status of the legal entities listed here. If you are not one of them, start filling out the Form.
We suggest that you follow our guide that contains the basic steps for completing the Form. We remind you that you can use our online form builder to avoid printing or scanning the document later. Well, let’s get to fill the form out!
Everyone who submits the Form must fill out Part I that concerns the general information. The remaining parts are filled in depending on the company’s status (see point 3 of our guide).
Enter Your Company’s Data
Fill in items 1-2. Specify the name of the organization and the country where it is located (registered).
Line 3 requires you to specify a disregarded entity, meaning a business entity that is not legally considered a corporation. The owner of the disregarded entity files the Form instead of the organization of this type.
Specify the Legal Status
Check the box according to the legal status of the company or trust.
Pay attention to the lower part of this section. If you have a disregarded entity, select “Yes” and fill in the third part of the Form.
Specify the FATCA Status
Section 5 deals with the Foreign Account Tax Compliance Act. FATCA regulates the obligations of both residents and foreign financial organizations to report to the IRS about their accounts (primarily banks, as well as depositories, insurance companies, and other financial institutions).
This section is the leader for the further parts of the Form. Select the appropriate type and check the box. Then go to the part indicated after the name of the organization type under FATCA. If you want to learn more about the status, see the corresponding section in the official instructions for the Form compilation.
Fill in the Addresses
On lines 6 and 7, write the address of your permanent residence and the address for receiving letters from the IRS.
Enter the Identification Codes
Specify the taxpayer ID and the Global Intermediate Identification Number that is assigned to the organizations participating in the FATCA application. Leave line 10 empty; the withholding agent fills it in.
Provide the Data on DE
In the second part of the Form, enter additional information about the Disregarded Entity, if necessary in your case.
Specify the Exemptions
Fill out the third Part if you require a reduced tax rate or tax exemption. In order to specify the reason for the demotion or release of the post, check the corresponding box.
Fill in the Subsequent Part (If Required)
The following parts of the Form are filled in individually. Enter the data in one of the required parts from 4 to 29. Here you need to complete the appropriate section to confirm the status of the object that you specified in line 5 of Part I. If you checked one of the first four items or direct reporting to the NFFE, you do not need to fill in the subsequent parts of the document. For the remaining ones, check the list provided on Line 5 of Part I.
Verify the Form
After you complete the section you need, go to part 30. Here you will find the legal rules for submitting the form and the line for your sign. Read the rules if you do not already know them.
Sign the form if you are an authorized representative or employee of the beneficial owner or FFI account holder. Please note that only an individual who has one of these posts has the right to sign the document. Enter your name and date the document, and check the box to confirm your legal ability to sign the Form.
