Instructions For Form W-8exp - Certificate Of Foreign Government Or Other Foreign Organization For United States Tax Withholding And Reporting Page 4
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9funds, and certain entities wholly owned by one or more
Commercial activities. For purposes of chapter 4,
exempt beneficial owners. In addition, an exempt
commercial activities are financial activities of a type
beneficial owner includes any person treated as an
engaged in by an insurance company, custodial
exempt beneficial owner under an applicable Model 1 IGA
institution, or depository institution (including the act of
or Model 2 IGA.
accepting deposits). An exempt beneficial owner will not
be considered exempt for chapter 4 purposes with
Financial institution. A financial institution generally
respect to payments derived from an obligation held in
means an entity that is a depository institution, custodial
connection with a commercial financial activity. See
institution, investment entity, or an insurance company (or
Regulations section 1.1471-6(h), including limitations on
holding company of an insurance company) that issues
the scope of a commercial financial activity. For purposes
cash value insurance or annuity contracts. See
of chapter 3, commercial activities are described in
Regulations section 1.1471-5(e).
Temporary Regulations section 1.892-4T.
Foreign central bank of issue. A foreign central bank of
Controlled commercial entity. A controlled commercial
issue is a bank that is by law or government sanction the
entity is an entity engaged in commercial activities
principal authority, other than the government itself, to
described in Temporary Regulations section 1.892-4T
issue instruments intended to circulate as currency. Such
(whether within or outside the United States) if the foreign
a bank is generally the custodian of the banking reserves
government holds:
of the country under whose law it is organized. The Bank
Any interest in the entity that is 50% or more of the total
of International Settlements is treated as though it were a
of all interests in the entity, or
foreign central bank of issue.
A sufficient interest or any other interest in the entity
A foreign central bank of issue must provide Form
which provides the foreign government with effective
W-8EXP to establish eligibility for exemption from
practical control of the entity.
withholding for payments exempt from tax under either
An entity includes a corporation, a partnership, a trust
section 892 or section 895.
(including a pension trust), and an estate. A partnership’s
Foreign financial institution (FFI). A foreign financial
commercial activities are attributable to its general and
institution (FFI) generally means a foreign entity that is a
limited partners for purposes of determining whether the
financial institution.
partner is a controlled commercial entity for purposes of
section 892. The partnership’s activities will result in the
Foreign person. A foreign person includes a
partnership having to withhold tax under section 1446 on
nonresident alien individual, foreign corporation, foreign
commercial income that is the effectively connected
partnership, foreign trust, foreign estate, foreign
taxable income allocable to a foreign government partner.
government, international organization, foreign central
bank of issue, foreign tax-exempt organization, foreign
Note. A foreign central bank of issue will be treated as a
private foundation, or government of a U.S. possession,
controlled commercial entity only if it engages in
and any other person that is not a U.S. person. It also
commercial activities within the United States.
includes a foreign branch or office of a U.S. financial
institution or U.S. clearing organization if the foreign
Chapter 4 status. The term chapter 4 status means a
branch is a qualified intermediary. Generally, a payment to
person’s status as a U.S. person, specified U.S. person,
a U.S. branch of a foreign person is a payment to a foreign
foreign individual, participating FFI, deemed-compliant
person.
FFI, restricted distributor, exempt beneficial owner,
nonparticipating FFI, territory financial institution,
Foreign government. For chapter 3 purposes, a foreign
excepted nonfinancial foreign entity (NFFE), or passive
government includes only the integral parts or controlled
NFFE. See Regulations section 1.1471-1(b) for the
entities of a foreign sovereign as defined in Temporary
definitions of these terms.
Regulations section 1.892-2T. Similar definitions apply for
chapter 4 purposes under Regulations section
Deemed-compliant FFI. Under section 1471(b)(2),
1.1471-6(b).
certain FFIs are deemed to comply with the regulations
under chapter 4 without the need to enter into an FFI
An integral part of a foreign sovereign, in general, is
agreement with the IRS. However, certain
any person, body of persons, organization, agency,
deemed-compliant FFIs are required to register with the
bureau, fund, instrumentality, or other body, however
IRS and obtain a Global Intermediary Identification
designated, that constitutes a governing authority of a
Number (GIIN). These FFIs are referred to as registered
foreign country. The net earnings of the governing
deemed-compliant FFIs. See Regulations section
authority must be credited to its own account or to other
1.1471-5(f).
accounts of the foreign sovereign, with no portion
benefiting any private person.
Exempt beneficial owner. An exempt beneficial owner
A controlled entity of a foreign sovereign is an entity
means a person that is described in Regulations section
that is separate in form from the foreign sovereign or
1.1471-6 and includes a foreign government, a political
otherwise constitutes a separate juridical entity only if:
subdivision of a foreign government, a wholly owned
It is wholly owned and controlled by the foreign
instrumentality or agency of a foreign government or
sovereign directly or indirectly through one or more
governments, an international organization, a wholly
controlled entities.
owned agency or instrumentality of an international
It is organized under the laws of the foreign sovereign
organization, a foreign central bank of issue, a
by which it is owned.
government of a U.S. possession, certain retirement
-4-
Instructions for Form W-8EXP (Rev. 7-2017)
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