IRS Releases Instructions for Form W-8BEN-E and Form 8966

The IRS released its instructions to Form W-8BEN-E, a document that virtually every non-U.S. entity must complete in order to certify status under FATCA. The final version of the W-8BEN-E was issued in March 2014, albeit without instructions. This new eight-page form, which replaces the pre-FATCA one-page W-8BEN, requires a non-U.S. entity to declare its FATCA status by checking one of 31 boxes, many of which require further certifications by the non-U.S. entity. The new Form W-8BEN-E also is required to be used by non-U.S. entities to claim benefits under a tax treaty and otherwise to certify their status under income tax withholding rules. (Non-U.S. individuals file a much simpler form W-8BEN instead of the W-8BEN-E.) The newly issued instructions provide several pages of definitions of terms used in the Form, as well as "Special Instructions" for entities located in countries with either a Model 1 or Model 2 Intergovernmental Agreement ("IGA").

The IRS issued instructions to Form 8966, the form required to be filed by participating foreign financial institutions ("PFFIs") and financial institutions located in Model 2 IGA countries. Form 8966 is used to report information with respect to certain U.S. accounts, substantial U.S. owners of passive non-financial foreign entities ("NFFEs"), U.S. accounts held by owner-documented FFIs, and certain other accounts, as applicable, based on the filer's FATCA status. For calendar years 2015 and 2016, Form 8966 is also required to be filed by PFFIs, registered deemed-compliant FFIs and Reporting Model 2 FFIs to report certain amounts paid to their account holders that are nonparticipating FFIs. A U.S. withholding agent that is not an FFI, and that makes a withholdable payment to a passive NFFE with a substantial U.S. owner or an Owner Documented FFI ("ODFFI") with a specified U.S. person owning certain equity or debt interests in the ODFFI, must report such substantial U.S. owners or specified U.S. persons on Form 8966. FFIs in Model 1 IGA countries do not file Form 8966 directly with the IRS but must provide similar information to their local taxing authority, which will send such information to the IRS. According to the instructions, Form 8966 for 2014 is due on March 15, 2015; however, a 90-day extension is available. For 2014 only, such 90-day extension is automatically granted to all filers without their needing to file any form or take any action.

See: Instructions for Form 8966; Instructions for Form W-8BEN-E.See generally: Cabinet FATCA Materials.