Page 21 - Withholding Taxes for Foreign Entities

10:50 - 14-Feb-2020
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Fileid: … tions/P515/2020/A/XML/Cycle10/source
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
base their determination on the receipt of addi- 3. You have a current residence or current 3. The account holder (whether an individual
tional statements or documents. They need to mailing address as part of your account in- or an entity) has provided standing instruc-
get new documentation. formation that is an address in the United tions to make payments with respect to an
States, offshore obligation to an address in, or an
Withholding Certificates 4. The account holder notifies you of a new account maintained in, the United States,
residence or mailing address in the United unless the account holder provides a rea-
You have reason to know that a Form W-8 pro- States, sonable explanation in writing that sup-
vided by a direct account holder that is a foreign ports its foreign status or provides docu-
person is unreliable or incorrect if: 5. You have classified the account holder as mentary evidence supporting its foreign
• The Form W-8 is incomplete with respect a U.S. person in your account information, status.
to any item on the form that is relevant to or 4. If an individual account holder provides a
the claims made by the account holder; 6. You have a current telephone number for Form W-8BEN to establish the individual’s
• The Form W-8 contains any information the account holder in the United States foreign status, and you have, either on ac-
that is inconsistent with the account hold- and no telephone number for the account companying documentation or as part of
er's claim; holder outside the United States (only to your account information, an unambigu-
• The Form W-8 lacks information necessary the extent described in Regulations sec- ous indication of a place of birth for the in-
to establish entitlement to a reduced rate tion 1.1441-7(b)(5)). dividual in the United States, you may not
of withholding, if a reduced rate is claimed; rely on the Form W-8BEN unless you pos-
or You may, however, rely on a Form W-8 as sess or obtain documentary evidence evi-
• You have information not contained on the establishing the account holder's foreign status dencing citizenship in a country other than
form that is inconsistent with the claims if any of the following apply. the United States and either (i) a copy of
made on the form. 1. You receive the Form W-8BEN from an in- the individual’s Certificate of Loss of Na-
dividual and: tionality of the United States or (ii) a rea-
The rules below apply to withholding agents sonable written explanation for the individ-
that are financial institutions, insurance compa- a. You possess or obtain documentary ual’s renunciation of U.S. citizenship (or,
nies, or brokers or dealers in securities. evidence (that does not contain a U.S. under an applicable IGA, the reason the
address) that supports the claim of individual does not have a Certificate of
Limits on reason to know for preexisting foreign status, and the individual pro- Loss of Nationality of the United States
obligations. With respect to a preexisting obli- vides you with a reasonable explana- despite relinquishing its U.S. citizenship),
gation (that is, an obligation, including an ac- tion in writing supporting the claim of or the reason the individual did not obtain
count, held by an individual that is outstanding foreign status; U.S. citizenship at birth.
on June 30, 2014, or an obligation, including an b. If you make a payment outside the
account, held by an entity that is opened, exe- United States with respect to an off- Claim of reduced rate of withholding under
cuted, or issued before January 1, 2015), if you shore obligation and you possess or treaty by certain withholding agents. You
have documented the foreign status of an ac- obtain documentary evidence estab- have reason to know that a Form W-8BEN or
count holder for purposes of Chapter 3 or 61 lishing foreign status that does not W-8BEN-E provided by a direct account holder
prior to July 1, 2014, you may continue to rely contain a U.S. address; to claim a reduced rate of withholding under a
on that documentation. In addition, if you make treaty is unreliable or incorrect for purposes of
a payment to a new entity account holder that c. With respect to an offshore obligation, establishing the account holder's residency in a
you treat as a preexisting entity account under if you classify the individual as a resi- treaty country if:
Notice 2014-33, you may apply the standards of dent of the country where the obliga- • The permanent residence address on the
knowledge in Regulations sections 1.1441-7(b) tion is maintained and you are re- Form W-8 is not in the treaty country or the
(5) and (b)(8), that were applicable prior to the quired to report payments to the beneficial owner notifies you of a new per-
issuance of the temporary regulations. See No- individual annually to the tax authority manent residence address that is not in the
tice 2014-59, available at IRS.gov/irb/ of the country where the obligation is treaty country,
2014-44_IRB#NOT-2014-59. maintained and that country has a tax • The permanent residence address on the
However, if you review documentation for an treaty or information exchange agree- Form W-8 is in the treaty country but the
individual account holder claiming foreign sta- ment in effect with the United States; withholding certificate (or your account in-
tus that contains a U.S. place of birth or if you or formation) contains a mailing address that
are notified of a change in circumstances, the d. You have classified the account is not in the treaty country,
obligation will be treated as having a change in holder as a U.S person in your ac- • You have a current mailing address in your
circumstances as of the date you review the count information and you possess or account information outside the treaty
documentation or receive the notification, and obtain documentary evidence evi- country, or
you will then have reason to know that the doc- dencing citizenship in a country other • The account holder has standing instruc-
umentation is unreliable or incorrect. However, than the United States. tions for you to pay amounts from its ac-
if you are reviewing documentation provided by count to an address or an account not in
an entity before January 1, 2015, you will not be 2. You receive the Form W-8BEN-E from an the treaty country.
required to treat the additional U.S. indicia entity that is not a flow-through entity and:
added to Regulations section 1.1441-7(b) by a. You have in your possession or obtain You may, however, rely on a Form W-8 as
the temporary regulations as a change in cir- documentation establishing foreign establishing an account holder's claim of a re-
cumstances. See Notice 2014-59, available at status that substantiates that the en- duced rate of withholding under a treaty if any
IRS.gov/irb/2014-44_IRB#NOT-2014-59. tity is organized or created under for- of the following apply.

Establishment of foreign status by certain eign law; or 1. The permanent residence address is not
in the treaty country and:
withholding agents. You have reason to b. With respect to an offshore obligation,
know that a Form W-8BEN or W-8BEN-E is un- if you classify the entity as a resident a. The account holder provides a rea-
reliable or incorrect to establish a direct account of the country where the obligation is sonable explanation for the perma-
holder's status as a foreign person if: maintained and you are required to nent residence address outside the
treaty country, or
1. The Form W-8 has a current permanent report payments to the entity annually
to the tax authority of the country
residence address in the United States, where the obligation is maintained b. You possess or obtain documentary
evidence described in Regulations
2. The Form W-8 has a current mailing ad- and that country has a tax treaty or in- section 1.1471-3(c)(5)(i) that estab-
dress in the United States, formation exchange agreement in ef- lishes residency in a treaty country.
fect with the United States.
Publication 515 (2020) Page 19