The IRS has posted a final version of Form W-8BEN-E (click here to download form), Certificate of Status of Beneficial Owner for United States Tax Withholding and Reporting (Entities). U.S. withholding agents will need to fully implement these changes by July 1, 2014 when Foreign Account Tax Compliance Act (FATCA) withholding begins on a variety of US-sourced payments.
Foreign entities that receive certain types of income must provide Form W-8BEN-E to establish they are not a U.S. person; claim that they are a beneficial owner of the income; and claim a reduced rate or exemptions from withholding of U.S. income taxes. U.S.entities making payments to foreign entities must retain the W-8BEN-E to substantiate either a reduced rate or exemption from withholding.
Companies should conduct a comprehensive review of their vendor files and require all foreign vendors to complete the new version of Form W-8BEN-E. U.S. withholding agents should review the forms and follow up on errors and incomplete forms.
For more information on the new W-8BEN-E form, please click here to leave a message for one of our tax planning and preparation consultants. Or, feel free to contact us directly at one of our three office locations Cleveland, Akron, or Tampa.