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Foreign partnerships, foreign simple trusts, and foreign

Certain entities that are disregarded for U.S. tax

grantor trusts are not the beneficial owners of income paid

purposes may be recognized for purposes of claiming

to the partnership or trust. The beneficial owners of

treaty benefits under an applicable tax treaty (see the

income paid to a foreign partnership are generally the

definition of hybrid entity below). A hybrid entity claiming

partners in the partnership, provided that the partner is not

treaty benefits is required to complete Form W-8BEN-E.

itself a partnership, foreign simple or grantor trust,

See Form W-8BEN-E and its instructions.

nominee or other agent. The beneficial owners of income

Financial account. A financial account includes:

paid to a foreign simple trust (that is, a foreign trust that is

A depository account maintained by a financial

described in section 651(a)) are generally the

institution;

beneficiaries of the trust, if the beneficiary is not a foreign

A custodial account maintained by a financial

partnership, foreign simple or grantor trust, nominee or

institution;

other agent. The beneficial owners of a foreign grantor

Equity or debt interests (other than interests regularly

trust (that is, a foreign trust to the extent that all or a

traded on an established securities market) in investment

portion of the income of the trust is treated as owned by

entities and certain holding companies, treasury centers,

the grantor or another person under sections 671 through

or financial institutions as defined in Regulations section

679) are the persons treated as the owners of the trust.

1.1471-5(e);

The beneficial owners of income paid to a foreign complex

Cash value insurance contracts; and

trust (that is, a foreign trust that is not a foreign simple

Annuity contracts.

trust or foreign grantor trust) is the trust itself.

For purposes of chapter 4, exceptions are provided for

For purposes of section 1446, the same beneficial

accounts such as certain tax-favored savings accounts;

owner rules apply, except that under section 1446 a

term life insurance contracts; accounts held by estates;

foreign simple trust rather than the beneficiary provides

escrow accounts; and annuity contracts. These

the form to the partnership.

exceptions are subject to certain conditions. See

The beneficial owner of income paid to a foreign estate

Regulations section 1.1471-5(b)(2). Accounts may also

is the estate itself.

be excluded from the definition of financial account under

an applicable IGA.

Note. A payment to a U.S. partnership, U.S. trust, or

U.S. estate is treated as a payment to a U.S. payee that is

Financial institution. A financial institution generally

not subject to 30% withholding under chapter 3 or 4. A

means an entity that is a depository institution, custodial

U.S. partnership, trust, or estate should provide the

institution, investment entity, or an insurance company (or

withholding agent with a Form W-9. For purposes of

holding company of an insurance company) that issues

section 1446, a U.S. grantor trust or disregarded entity

cash value insurance or annuity contracts.

shall not provide the withholding agent a Form W-9 in its

Foreign financial institution (FFI). A foreign financial

own right. Rather, the grantor or other owner shall provide

institution (FFI) generally means a foreign entity that is a

the withholding agent the appropriate form.

financial institution.

Chapter 3. Chapter 3 means Chapter 3 of the Internal

Foreign person. A foreign person includes a

Revenue Code (Withholding of Tax on Nonresident Aliens

nonresident alien individual and certain foreign entities

and Foreign Corporations). Chapter 3 contains sections

that are not U.S. persons (entities should complete Form

1441 through 1464.

W-8BEN-E rather than this Form W-8BEN).

Chapter 4. Chapter 4 means Chapter 4 of the Internal

Hybrid entity. A hybrid entity is any person (other than

Revenue Code (Taxes to Enforce Reporting on Certain

an individual) that is treated as fiscally transparent in the

Foreign Accounts). Chapter 4 contains sections 1471

United States but is not treated as fiscally transparent by a

through 1474.

country with which the United States has an income tax

Deemed-compliant FFI. Under section 1471(b)(2),

treaty. Hybrid status is relevant for claiming treaty

certain FFIs are deemed to comply with the regulations

benefits.

under chapter 4 without the need to enter into an FFI

Intergovernmental agreement (IGA). An IGA means a

agreement with the IRS. However, certain

Model 1 IGA or a Model 2 IGA. For a list of jurisdictions

deemed-compliant FFIs are required to register with the

treated as having in effect a Model 1 or Model 2 IGA, see

IRS and obtain a GIIN. These FFIs are referred to as

“List of Jurisdictions” available at

registered deemed-compliant FFIs. See Regulations

section 1.1471-5(f).

A Model 1 IGA means an agreement between the

United States or the Treasury Department and a foreign

Disregarded entity. A business entity that has a single

government or one or more agencies to implement

owner and is not a corporation under Regulations section

FATCA through reporting by FFIs to such foreign

301.7701-2(b) is disregarded as an entity separate from

government or agency thereof, followed by automatic

its owner. A disregarded entity does not submit this Form

exchange of the reported information with the IRS. An FFI

W-8BEN to a partnership for purposes of section 1446 or

in a Model 1 IGA jurisdiction that performs account

to an FFI for purposes of chapter 4. Instead, the owner of

reporting to the jurisdiction’s government is referred to as

such entity provides appropriate documentation. See

a reporting Model 1 FFI.

Regulations section 1.1446-1 and section 1.1471-3(a)(3)

A Model 2 IGA means an agreement or arrangement

(v), respectively.

between the U.S. or the Treasury Department and a

foreign government or one or more agencies to implement

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Instructions For Form W-8ben - Certificate Of Foreign Status Of Beneficial Owner For United States Tax Withholding And Reporting (Individuals) - 2014 Page 4

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