IRS Form W-8BEN (Certificate of Status of Beneficial Owner for United States Tax Withholding and Reporting) is used by foreign entities to confirm their foreign status, Chapter 3 status for withholding tax purposes, and Chapter 4 status for U.S. FATCA purposes. The foreign entity, if applicable, can also use the withholding certificate to claim any tax treaty benefits.
For example, Company ABC Ltd. is a limited company (Ltd) formed in the Cayman Islands. It wants to open a brokerage account with JP Morgan Bank. Since it is a foreign entity for U.S. tax purposes, it completes Form W-8BEN-E instead of Form W-9. The Form W-8BEN-E confirms to JP Morgan Chase that the entity is a non-U.S. entity for federal tax purposes.
Information Required on Form W-8BEN-E
Part I – Identification of Beneficial Owner
- Name of the organization that is the beneficial owner
- Country of incorporation or organization for the entity
- Permanent residence address and mailing address
- Chapter 3 Classification. The organization should confirm its classification for U.S. tax purposes (e.g., corporation, partnership, trust private foundation, foreign government, disregarded entity, etc.)
- Chapter 4 Classification. The Chapter 4 classification is the entity classification under the U.S. Foreign Account Tax Compliance Act (FATCA).
- U.S. taxpayer identification number (TIN), if applicable. Provide the employer identification number (EIN) if the foreign entity has an EIN.
- Global Intermediary Identification Number (GIIN), if applicable.
- Foreign taxpayer ID number
- Reference number. The reference number is not required but may be helpful information for the withholding agent. For example, a foreign person who opens a U.S. bank account may list the bank account number as the reference number.
Part III – Claim of Treaty Benefits
The organization can complete Part III if the foreign entity wants to claim an exemption from withholding tax or a reduced withholding tax rate under a relevant income tax treaty.
For example, Company ABC Ltd. is a limited company (Ltd) formed in Germany. It is owned 100% by Hans Smith who is a citizen and tax resident of Germany. The company opens U.S. brokerage account and provides the broker a Form W-8BEN-E with Parts I, III, and XXVI completed. Hans claims treaty benefits under the U.S.-German Tax Treaty for the entity. The treaty provides a reduced withholding tax rate on U.S. source dividend income paid to the foreign company.
Parts IV through XXIX – Chapter 4 FATCA Classification
There are various types of entity classifications under FATCA. The primary purpose is to identify a foreign financial institution (FFI) that may have a FATCA filing obligation.
The Chapter 4 entity classifications include, but are not limited to, the following:
- Sponsored FFI
- Certified Deemed-Compliant Entity
- Certain Investment Entities that Do Not Maintain Financial Accounts
- Owner-Documented FFI
- Restricted Distributor
- Nonreporting IGA FFI
- Foreign Government, Government of U.S. Possession, or Foreign Central Bank
- International Organization
- Exempt Retirement Plans
- Territory Financial Institution
- Excepted Nonfinancial Entity
- Nonprofit Organizations
- Publicly Traded NFFE or NFFE Affiliated of a Publicly Traded Entity
- Excepted Territory NFFE
- Active NFFE or a Passive NFFE
Part XXX – Certification
An authorized representative for the foreign organization must sign the certification, which includes a declaration, under penalty of perjury, that all information is true, correct, and complete.
Video Tutorials Regarding Forms W-8BEN-E
View some of our videos below on how to completes Form W-8BEN-E:
Additional Information
Taxpayers can find more information on Form W-8BEN-E instructions and on the IRS website.