IRS Publishes Revised Forms W-8BEN and W-8ECI Affecting Reporting Obligations Under FATCA

The IRS published a revised Form W-8BEN for use by individuals to establish that they are not U.S. persons and to claim certain treaty benefits.The form and accompanying instructions were modified to reflect reporting obligations under FATCA. Under FATCA, individuals can establish their status as non-U.S. persons by filing a Form W-8BEN with U.S. withholding agents, foreign financial institutions and Non-Financial Foreign Entities. Among other changes, the revised Form W-8BEN now requires individuals to report their date of birth.

The IRS also issued a revised Form W-8ECI which is used by foreign individuals and entities to claim certain income that is "effectively connected" with a U.S. trade or business of the foreign individual or entity. Such income is exempt from normal income tax withholding and FATCA withholding taxes, but is subject to normal net-basis taxation by the United States in the same manner generally as income earned by U.S. individuals and entities.

The IRS has not yet issued final versions of the more complicated Form W-8BEN-E, which is to be used by non-U.S. entities to claim their status under FATCA. A draft version of Form W-8BEN-E was published in 2012 but, since that date, final regulations and other guidance have been issued under FATCA that will require further revisions to the form. The IRS also must issue final versions of revised Forms W-8IMY (used by foreign partnerships and intermediaries) and W-8EXP (used by foreign tax exempt entities).

See: Instructions for Revised Form W-8BEN; Revised Form W-8BEN; Revised Form W-8ECI. See generally: Cabinet FATCA Materials (accessible to Cabinet subscribers only).For more information, please contact Daniel Mulcahy and Mark Howe.