Analysis of New 2014 Form W-8IMY and W8-BEN-E

Analysis of New 2014 Form W-8IMY and W8-BEN-E

On April 30, 2014 the IRS released the new Form W-8IMY (“Form W-8IMY”), formally replacing its 2006 predecessor W-8IMY. This new Form W-8IMY has 28 parts, whereas the previous August 2013 FATCA draft W-8IMY only contained 26.  The new 2014 Form W-8IMY is vastly different from the seven-part 2006 predecessor form.  

Below is a summary for the W-8IMY and W-8BEN-E.  For a full compliance analysis of the new form W-8IMY and W-8BEN-E see LexisNexis® Guide to FATCA Compliance, Chapter 11 – Withholding And Qualified Intermediary, §§ 11.08[5] (Analysis of Form W-8IMY) and 11.08[2] (Analysis of Form W-8BEN-E).

Form W-8IMY

Form W-8IMY is submitted generally by a payment recipient (the “filer”) with non-beneficial owner status, i.e. an intermediary.  Such intermediary can be a U.S. branch, a qualified intermediary, a non-qualified intermediary, foreign partnership, foreign grantor or a foreign simple trust.  Form W-8IMY requires a tax identification number.

Part I of the Form adds FATCA classification.   Part I of the form requires general information, the Chapter 3 QI status, and the Chapter 4 FATCA classification of the filer.

Question 4 of Part I requests the QI status. If the filer is a Qualified Intermediary, then the filer must complete Part III, Qualified Intermediary.  If the filer is a Nonqualified Intermediary, then the filer must complete Part IV, Nonqualified Intermediary.

Territory Financial Institutions complete Part V. U.S. Branches complete Part VI.

Withholding Foreign Partnership or Withholding Foreign Trusts complete Part VII.

Nonwithholding Foreign Partnership, Nonwithholding Foreign Simple Trust, and Nonwithholding foreign grantor trusts must complete Part VIII.

Question 5 requests the FATCA classification of the filer. The classification indicated determines which one of the Parts IX through XXVII must be completed.

Part II of this form is to be completed if the entity is a disregarded entity or a branch receiving payment as an intermediary. Part II only applies to branches of an FFI outside the FFI’s country of residence.

Chapter 3 Status Certifications, Parts III – VIII

Parts III – VIII of this form address the QI Status of the entity. Part III is to be completed if the entity is a QI, and requires the entity to certify that it is a QI and has provided appropriate documentation. Part IV is to be completed if the entity is a Nonqualified Intermediary (NQI), and requires the entity to certify that it is a NQI not acting for its own account.

Part V is to be completed if the entity is a Territory Financial Institution. Part VI is to be completed by a U.S. branch only if the branch certifies on the form that it is the U.S. branch of a U.S. bank or insurance company, and that the payments made are not effectively connected to a U.S. trade or business. Part VII is to be completed if the entity is a Foreign Withholding Partnership (WP) or a Withholding Foreign Trust (WT). Part VIII is to be completed if the entity is either a Nonwithholding Foreign Partnership, Simple Trust, or Grantor Trust.

 Chapter 4 Status Certifications Parts IX – XXVI

Parts IX – XXVI of this form address the FATCA Status of the entity. These classifications include the new classification of a Restricted Distributor (Part XVI), but do not include the new classification of a Reporting NFFE.

Statement of Certification

Part XXVIII requires certification, under penalty of perjury, by the payee or a person authorized to sign on the payee’s behalf. Finally, the form contains the following language: “I agree that I will submit a new form within 30 days if any certification made on this form becomes incorrect.”

Structure of New Form, Form W-8IMY

Part I Identification of Entity

Part II Disregarded Entity or Branch Receiving Payment.

Chapter 3 Status Certifications

Part III Qualified Intermediary

Part IV Nonqualified Intermediary

Part V Territory Financial Institution

Part VI Certain U.S. Branches

Part VII Withholding Foreign Partnership (WP) or Withholding Foreign Trust (WT)

Part VIII Nonwithholding Foreign Partnership, Simple Trust, or Grantor Trust

 Chapter 4 Status Certifications

Part IX Nonparticipating FFI with Exempt Beneficial Owners

Part X Sponsored FFI That Has Not Obtained a GIIN

Part XI Owner-Documented FFI

Part XII Certified Deemed-Compliant Nonregistering Local Bank

Part XIII Certified Deemed-Compliant FFI with Only Low-Value Accounts

Part XIV Certified Deemed-Compliant Sponsored, Closely Held Investment Vehicle

Part XV Certified Deemed-Compliant Limited Life Debt Investment Entity

Part XVI Restricted Distributor

Part XVII Foreign Central Bank of Issue

Part XVIII Nonreporting IGA FFI

Part XIX Exempt Retirement Plans

Part XX Excepted Nonfinancial Group Entity

Part XXI Excepted Nonfinancial Start-Up Company

Part XXII Excepted Nonfinancial Entity in Liquidation or Bankruptcy

Part XXIII Publicly Traded NFFE or NFFE Affiliate of a Publicly Traded Corporation

Part XXIV Excepted Territory NFFE

Part XXV Active NFFE

Part XXVI Passive NFFE

Part XXVII Sponsored Direct Reporting NFFE

Sworn Certification

Part XXVIII Certification

W-8BEN-E

On April 2, 2014 the IRS released the new 2014 Form W-8BEN-E (2-2014) that coincides with FATCA and QI entity classification reporting requirements.  Below is a simple summary for the 2014 W-8BEN-E .  

The newest version of Form W-8BEN-E must be used by entities that are beneficial owners of a payment, or of another entity that is the beneficial owner. The form has thirty parts, whereas the draft form only had twenty-seven.  All filers will complete Parts I and XXIX.

Part I of the form requires general information, the QI status, and the FATCA classification of the filer.  Question 4 of Part I requests the QI status. If the filer is a disregarded entity, partnership, simple trust, or grantor trust, then the filer must complete Part III if the entity is claiming benefits under a U.S. tax treaty. Question 5 requests the FATCA classification of the filer. The classification indicated determines which one of the Parts IV through XXVIII must be completed.

Part XXIX requires certification, under penalty of perjury, by the payee or a person authorized to sign on the payee’s behalf.  This part of the final form also contains the following language that does not appear in the current form: “I agree that I will submit a new form within 30 days if any certification made on this form becomes incorrect.”

Note that if the filer is a passive NFFE, it must complete Part XXVI as well as Part XXX if it has substantial U.S. owners.  For a Passive NFFE, a specified U.S. person is a substantial U.S. owner if the person has more than a 10 percent beneficial interest in the entity.

Completion of the other parts of the final form W-8BEN-E will depend upon the FATCA classification of the filer. The classifications on the newest version Form W-8BEN-E maintain the classification of a Restricted Distributor (previously Part X, but in the final form Part XI) (see the Rev. 2013 version of the W-8BEN-E).  

The structure of W-8BEN-E  is as follows:

Part I Identification of Beneficial Owner

Part II Disregarded Entity or Branch Receiving Payment.

Part III Claim of Tax Treaty Benefits (if applicable). (For chapter 3 purposes only)

Part IV Sponsored FFI That Has Not Obtained a GIIN

Part V Certified Deemed-Compliant Nonregistering Local Bank


Part VI Certified Deemed-Compliant FFI with Only Low-Value Accounts
Part VII Certified Deemed-Compliant Sponsored, Closely Held Investment Vehicle
Part VIII Certified Deemed-Compliant Limited Life Debt Investment Entity
Part IX Certified Deemed-Compliant Investment Advisors and Investment Managers
Part X Owner-Documented FFI
Part XI Restricted Distributor
Part XII Nonreporting IGA FFI
Part XIII Foreign Government, Government of a U.S. Possession, or Foreign Central Bank of Issue
Part XIV International Organization
Part XV Exempt Retirement Plans
Part XVI Entity Wholly Owned by Exempt Beneficial Owners
Part XVII Territory Financial Institution
Part XVIII Excepted Nonfinancial Group Entity
Part XIX Excepted Nonfinancial Start-Up Company
Part XX Excepted Nonfinancial Entity in Liquidation or Bankruptcy
Part XXI 501(c) Organization
Part XXII Non-Profit Organization
Part XXIII Publicly Traded NFFE or NFFE Affiliate of a Publicly Traded Corporation
Part XXIV Excepted Territory NFFE
Part XXV Active NFFE
Part XXVI Passive NFFE
Part XXVII Excepted Inter-Affiliate FFI
Part XXVIII Sponsored Direct Reporting NFFE
Part XXIX Certification
Part XXX Substantial U.S. Owners of Passive NFFE

For in-depth analysis of the practical compliance aspects of financial service business providing for exchange of information of information about foreign residents with their national competent authority or with the IRS (FATCA), see Lexis Guide to FATCA Compliance, 2nd Edition just published!

The LexisNexis® Guide to FATCA Compliance (2nd Edition) comprises 34 Chapters grouped in three parts: compliance program (Chapters 1–4), analysis of FATCA regulations (Chapters 5–16) and analysis of Intergovernmental Agreements (IGAs) and local law compliance requirements (Chapters 17–34), including  information exchange protocols and systems.  The 34 chapters include many practical examples to assist a compliance officer contextualize the regulations, IGA provisions, and national rules enacted pursuant to an IGA.  Chapters include by example an in-depth analysis of the categorization of trusts pursuant to the Regulations and IGAs, operational specificity of the mechanisms of information capture, management and exchange by firms and between countries, and insights as to the application of FATCA and the IGAs for BRIC and European country chapters.

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