General Instructions For Form 8709 printable pdf download

Form 8709 (Rev. 5-97)

Page

Paperwork Reduction Act

designated, that constitutes a governing

government taxpayer does not apply to any

authority of a foreign country. The net

income (1) received by a controlled

Notice

earnings of the governing authority must be

commercial entity; (2) received directly or

credited to its own account, or to other

indirectly from a controlled commercial entity;

We ask for the information on this form to

accounts of the foreign sovereign, with no

or (3) received from the disposition of any

carry out the Internal Revenue laws of the

portion benefiting any private person.

interest in a controlled commercial entity.

United States. To verify exemption from

withholding on investment income exempt

A “controlled entity of a foreign sovereign”

Where and When To File

from tax under section 892, you may be

is an entity that is separate from the foreign

required to provide the information. We need

sovereign or otherwise constitutes a separate

Taxpayers may file Form 8709 with the

it to ensure that you are complying with these

juridical entity only if (1) it is wholly owned

withholding agent as proof that exemption

laws and to allow us to figure and collect the

and controlled by the foreign sovereign

from withholding is warranted. Taxpayers are

right amount of tax.

directly or indirectly through one or more

not required to file Form 8709, but a

controlled entities; (2) it is organized under

You are not required to provide the

withholding agent may require taxpayers to

the laws of the foreign sovereign by which it

information requested on a form that is

file the form prior to the payment of income.

is owned; (3) its net earnings are credited to

subject to the Paperwork Reduction Act

If, after filing this form, the taxpayer becomes

its own account or to other accounts of the

unless the form displays a valid OMB control

ineligible for benefits under section 892, the

foreign sovereign with no portion of its

number. Books or records relating to a form

taxpayer must notify the withholding agent in

income benefiting any private person; and (4)

or its instructions must be retained as long as

writing.

its assets vest in the foreign sovereign upon

their contents may become material in the

dissolution.

Instructions for

administration of any Internal Revenue law.

Generally, tax returns and return information

Withholding Agent

Note: The term “controlled entity” also

are confidential, as required by section 6103.

includes pension trusts defined in Temporary

A withholding agent must determine whether

Regulations section 1.892-2T(c).

The time needed to complete and file this

exemption from withholding is warranted.

form will vary depending on individual

International organization.—The term

Although a taxpayer is not required to submit

circumstances. The estimated average time

“international organization” means any public

Form 8709 nor is a withholding agent

is: Recordkeeping, 13 min.; Learning about

international organization entitled to

required to obtain Form 8709 from a taxpayer

the law or the form, 25 min.; Preparing the

privileges, exemptions, and immunities as an

prior to the payment of investment income, a

form, 26 min.; Copying, assembling, and

international organization under the

withholding agent will be subject to liability if

sending the form to the withholding agent,

International Organizations Immunities Act

it is later determined that the income was not

20 min.

(22 U.S.C. 288-288f). In general, to qualify as

in fact exempt from tax.

an international organization, the United

If you have comments concerning the

Except as provided below, obtaining Form

States must participate in the organization

accuracy of these time estimates or

8709 excuses a withholding agent from

pursuant to a treaty or under the authority of

suggestions for making this form simpler, we

liability for failure to withhold. A withholding

an Act of Congress authorizing the

would be happy to hear from you. You can

agent may request that the taxpayer submit

participation. See Regulations section

write to the Tax Forms Committee, Western

Form 8709. If the taxpayer does not submit

1.893-1(b)(3).

Area Distribution Center, Rancho Cordova,

the form, the withholding agent may withhold

CA 95743-0001. DO NOT send the form to

Note: Only foreign governments and

tax and will be considered for purposes of

this office. Instead, see Where and When To

international organizations defined above

sections 1461 through 1463 to have been

File on this page.

qualify for exemption from tax under section

required to withhold the tax.

892 and exemption from withholding under

General Instructions

A withholding agent will not be protected

sections 1441 and 1442.

from liability by obtaining Form 8709, and

Investment income.—The term “investment

Section references are to the Internal

must withhold, if (1) the withholding agent

income” means income from investments in

Revenue Code unless otherwise noted.

knows or has reason to know that the

the United States in stocks, bonds, other

taxpayer is not eligible for the exemption from

Purpose of Form

domestic securities (as defined in Temporary

tax under section 892, either because the

Regulations section 1.892-3T(a)(3)), financial

taxpayer does not qualify as a foreign

Temporary Regulations sections 1.892-7T(e)

instruments held in the execution of

government or international organization (as

and 1.1441-8T(a) state that withholding is not

governmental financial or monetary policy (as

defined above) or the income is not eligible

required on amounts paid to a foreign

defined in Temporary Regulations section

for exemption; or (2) the withholding agent

government or international organization from

1.892-3T(a)(4) and (a)(5)), and interest on

knows or has reason to know that any of the

sources within the United States that are

deposits in banks in the United States.

facts or assertions on Form 8709 may be

exempt from tax under section 892. Form

false. In addition, withholding must be made

Controlled commercial entity.— Generally, a

8709 is used by foreign governments or

on any item of income paid to a foreign

“controlled commercial entity” means any

international organizations (“the taxpayer”) to

government taxpayer by a payer identified on

entity engaged in commercial activities

claim exemption from withholding under

line 5.

(whether conducted within or outside the

sections 1441 and 1442 on items of income

United States) if the foreign government (1)

A withholding agent who accepts Form

qualifying for tax exemption under section

holds any interest in the entity that is 50% or

8709 and then finds that either (1) or (2)

892. The taxpayer may use Form 8709

more of the total of the interests in the entity,

above applies must promptly notify in writing

instead of the written statement described in

or (2) holds a sufficient interest or any other

the Office of the Assistant Commissioner

Temporary Regulations section 1.1441-8T(b).

interest in the entity that provides the foreign

(International), Director, Office of International

For foreign government taxpayers, only

government with effective practical control of

District Operations, Attn: CP:IN:D:C:E, 950

investment income can qualify for exemption

the entity. See Temporary Regulations section

L’Enfant Plaza, SW, Washington, DC 20024,

from tax under section 892. See Definitions

1.892-5T.

and must withhold on any amounts not yet

below. The taxpayer should complete and file

paid. In addition, a withholding agent who is

this form with the withholding agent for each

A central bank of issue (as defined in

notified by the Director, Office of International

tax year the exemption is claimed.

Regulations section 1.895-1(b)) shall be

District Operations, that a taxpayer’s eligibility

treated as a controlled commercial entity only

Definitions

for the section 892 exemption is in doubt or

if it engages in commercial activities within

that particular items of income are ineligible

the United States.

Foreign government.—The term “foreign

for exemption under section 892 must

Note: The section 892 exemption for a foreign

government” means only the integral parts or

withhold on any amounts not yet paid.

government taxpayer does not apply to

controlled entities of a foreign sovereign as

Do not send Form 8709 to the IRS.

income from the conduct of a commercial

defined under Temporary Regulations section

Instead, keep Form 8709 for at least 4 years

activity, or from sources other than those

1.892-2T.

after the end of the calendar year in which

listed in Part I, line 4, of Form 8709. (For the

In general, an “integral part of a foreign

the income was paid for which this form was

definition of “commercial activities,” see

sovereign” is any person, body of persons,

filed.

Temporary Regulations section 1.892-4T.) In

organization, agency, bureau, fund,

addition, the exemption for a foreign

instrumentality, or other body, however

General Instructions For Form 8709

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