Guide to Global Payroll Management - 2020 - D-39

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Appendix
D--proofs.
Federal
and
Instructions

Instructions for
Form W-8BEN

Department of the Treasury
Internal Revenue Service

(Rev. July 2017)

Certificate of Foreign Status of Beneficial Owner for
United States Tax Withholding and Reporting (Individuals)
Section references are to the Internal Revenue Code
unless otherwise noted.

Future Developments

For the latest information about developments related to
Form W-8BEN and its instructions, such as legislation
enacted after they were published, go to IRS.gov/
FormW8BEN.

What's New

Minor updates are made to Form W-8BEN to conform with
Form W-8BEN-E. A note on reciprocal exchange is added
before Part I; Part II, line 10, is updated to match Form
W-8BEN-E; and the first bullet in Part III is revised for
clarity. These instructions have been updated to reflect
temporary and final regulations under chapters 3 and 4
published in January 2017. These instructions include
additional information on when a foreign TIN and date of
birth are required to be included on Form W-8BEN. In
addition, these instructions include information about the
use of electronic signatures.
More information. For more information on FATCA, go
to IRS.gov/FATCA.

General Instructions

For definitions of terms used throughout these
instructions, see Definitions, later.

Purpose of Form

Establishing status for chapter 3 purposes. Foreign
persons are subject to U.S. tax at a 30% rate on income
they receive from U.S. sources that consists of:
Interest (including certain original issue discount (OID));
Dividends;
Rents;
Royalties;
Premiums;
Annuities;
Compensation for, or in expectation of, services
performed;
Substitute payments in a securities lending transaction;
or
Other fixed or determinable annual or periodical gains,
profits, or income.
This tax is imposed on the gross amount paid and is
generally collected by withholding under section 1441. A
payment is considered to have been made whether it is
made directly to the beneficial owner or to another person,
such as an intermediary, agent, or partnership, for the
benefit of the beneficial owner.
Jul 11, 2017

In addition, section 1446 requires a partnership
conducting a trade or business in the United States to
withhold tax on a foreign partner's distributive share of the
partnership's effectively connected taxable income.
Generally, a foreign person that is a partner in a
partnership that submits a Form W-8BEN for purposes of
section 1441 or 1442 will satisfy the documentation
requirements under section 1446 as well. However, in
some cases the documentation requirements of sections
1441 and 1442 do not match the documentation
requirements of section 1446. See Regulations sections
1.1446-1 through 1.1446-6.
Note. The owner of a disregarded entity (including an
individual), rather than the disregarded entity itself, must
submit the appropriate Form W-8BEN for purposes of
section 1446.
If you receive certain types of income, you must
provide Form W-8BEN to:
Establish that you are not a U.S. person;
Claim that you are the beneficial owner of the income
for which Form W-8BEN is being provided or a foreign
partner in a partnership subject to section 1446; and
If applicable, claim a reduced rate of, or exemption
from, withholding as a resident of a foreign country with
which the United States has an income tax treaty and who
is eligible for treaty benefits.
You may also be required to submit Form W-8BEN to
claim an exception from domestic information reporting
and backup withholding (at the backup withholding rate
under section 3406) for certain types of income that are
not subject to foreign-person withholding at a rate of 30%
under section 1441. Such income includes:
Broker proceeds;
Short-term (183 days or less) OID;
Bank deposit interest;
Foreign source interest, dividends, rents, or royalties;
and
Proceeds from a wager placed by a nonresident alien
individual in the games of blackjack, baccarat, craps,
roulette, or big-6 wheel.
A withholding agent or payer of the income may rely on
a properly completed Form W-8BEN to treat a payment
associated with the Form W-8BEN as a payment to a
foreign person who beneficially owns the amounts paid. If
applicable, the withholding agent may rely on the Form
W-8BEN to apply a reduced rate of, or exemption from,
withholding at source.
Provide Form W-8BEN to the withholding agent or
payer before income is paid or credited to you. Failure to
provide a Form W-8BEN when requested may lead to
withholding at the foreign-person withholding rate of 30%
or the backup withholding rate under section 3406.

Cat. No. 25576H

D-39
Guide to Global Payroll Management - 2020

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