On September 2, 2021, the IRS published a DRAFT Form W-8BEN-E and Instructions. Similar to the recently published DRAFT Forms W-8, the BEN-E incorporates a number of updates related to the rules under sections 1446(a) and 1446(f), foreign taxpayer identification numbers (FTINs), claim of tax treaty benefits, and certifications. Changes to the face of the form include the following:
- Line 4, Type of Entity. Updated to remove the general classification for foreign government and replaced with the two possible classifications for a foreign government:
– An integral part of a foreign government
– An entity that is controlled by a foreign government
- NEW Line 9c, FTIN Not Legally Required. Added for account holders to indicate that they are not legally required to obtain an FTIN from their jurisdiction of residence.
- Line 14b, Claim of Tax Treaty Benefits, limitation on benefits (LOB). Added checkbox for ‘No LOB article in treaty.’
- Part XXX, Certification. Changes include:
– Added language to the first certification that the form relates to all income or proceeds. This is similar to what we have seen on recent forms with the addition of the term ‘proceeds.’
– Added language to the first certification that the form may be submitted for purposes of section 6050W or 6050Y. Here we see an addition to the certification to include section 6050Y.
– Added clarifying language to (a) and (b) of the third certification that the form relates to income not effectively connected with the conduct of a trade or business in the United States and income effectively connected with the conduct of a trade or business in the United States but is not subject to tax under an income tax treaty.
– Added new paragraph (d) to the third certification that the form relates to a partner’s amount realized from the transfer of a partnership interest subject to withholding under section 1446(f).
Updates to the Instructions include:
- Details regarding all new and updated lines on the face of the form.
- Section 6050Y(b) reporting. Form W-8BEN-E usage by a non-U.S. seller of a life insurance contract or interest therein for purposes of the reporting required under section 6050Y(b).
- Line 14b, Claim of Tax Treaty Benefits. Updated for new checkbox ‘No LOB Article In Treaty.’ This generally requires that the entity is a resident in a foreign country that has entered into an income tax treaty with the United States that does not contain an LOB article.
- Special Rates and Conditions. Updated to include representations required by entities claiming treaty benefits on business profits or gains not attributable to a permanent establishment, including for a foreign partner that derives gain subject to section 864(c)(8) upon the transfer of an interest in a partnership.
- Electronic signature updates. Updated to include additional guidance in the final regulations issued under chapter 3 regarding the use of electronic signatures on withholding certificates. These rules state that a withholding agent may rely on an electronically signed withholding certificate if the beneficial owner provides any additional information or documentation requested by the withholding agent to support that the form was signed by the beneficial owner or any other person authorized to do so. With a reference to Regulations section 1.1441-1(e)(4)(i)(B).
Check out the DRAFT Form W-8BEN-E here:
and the DRAFT Instructions to Form W-8BEN-E here: