Form W-8BEN-E replaces the old Form W-8BEN, for U.S. taxpayers doing business with foreign entities or entities with foreign subsidiaries. Form W-8BEN-E documents the status of those foreign entities for U.S. income tax, tax treaty benefits, and FATCA (Foreign Account Tax Compliance Act ) purposes.
Form W-8BEN-E serves four main purposes:
- Establish non-U.S. status;
- Claim beneficial owner status;
- Claim exemption from, or reduction in, U.S. withholding tax under Chapter 3 (the original foreign tax withholding laws); and
- Identify the entity’s category under Chapter 4 (FATCA).
Any U.S. taxpayer engaging in non-product related transactions (i.e., services) with a foreign entity must receive a completed Form W-8BEN-E from that entity, to determine whether that foreign entity is subject to the 30% default withholding on payments to foreign entities. In addition, the completed Form W-8BEN-E will determine whether the foreign entity is eligible for any reduced withholdings related to an applicable tax treaty.