United States

IRS delays required implementation of new Form W-8BEN-E

New Form W-8BEN-E must be used on Jan. 1, 2017

TAX ALERT  | 

In a surprisingly muted update to their website, the IRS announced that the April 2016 revision of Form W-8BEN-E, originally scheduled to become mandatory after October 2016, will instead not be required until Jan. 1, 2017. Up until that time, withholding agents may accept, and even require, taxpayers to use the February 2014 revision of the form.

Form W-8BEN-E is part of a series of forms (the ‘W-8 series’), published after the enactment of the Foreign Account Tax Compliance Act (FATCA) that replaced pre-FATCA Form W8-BEN. Prior to FATCA, these forms were used to collect information about foreign persons receiving payments potentially subject to U.S. tax withholding or who claimed benefits under a U.S. income tax treaty. FATCA more than tripled the size of these forms, as they were expanded to not just collect income tax withholding information, but also to collect information regarding a non-U.S. person’s FATCA status. The W-8BEN-E is used to collect this information about entities that are the beneficial owner of any potentially withholdable payments or who are otherwise claiming tax treaty benefits.

The April 2016 revision of Form W-8BEN-E added several additional items of information to be provided to withholding agents, the most notable of which is the enhanced detail required as part of a claim of tax treaty benefits. By delaying the date when the new revision becomes mandatory, the IRS has given withholding agents more time to adapt their compliance systems to account for the additional information required by the new form.

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