Fill out Form W-8BEN-E, Certificate of Status of Beneficial Owner with Instafill.ai

Form W-8BEN-E should be completed and signed by a foreign entity, including certain partnerships, trusts, and estates, that is acting as a withholding agent or is a participating FFI or an agent thereof. This form is also required to be completed by a foreign entity that is claiming a reduction or exemption from withholding under a tax treaty or U.S. tax law.

Part I of Form W-8BEN-E requires the following information: (1) Name, address, and jurisdiction of the entity; (2) Taxpayer Identification Number (TIN) or the entity's registration number; (3) Type of entity; (4) Principal class of business or the nature of the activities; (5) Name and TIN of the entity's responsible party; and (6) Name and TIN of the entity's beneficial owner(s) or controlling person(s).

A participating FFI is a Foreign Financial Institution that agrees to report certain information to the Internal Revenue Service (IRS) regarding payments made to non-U.S. entities and non-U.S. individuals. In contrast, a nonparticipating FFI is a Foreign Financial Institution that does not agree to report such information to the IRS. Participating FFIs are required to enter into an agreement with the IRS to become a participating FFI and to meet certain due diligence requirements.

Reporting Model 1 FFIs and reporting Model 2 FFIs are two different methods for Foreign Financial Institutions to report payments made to non-U.S. entities and non-U.S. individuals. Reporting Model 1 FFIs report the information directly to the IRS, while reporting Model 2 FFIs report the information to their withholding agents, who then report the information to the IRS. Both models have different due diligence requirements and reporting obligations.

A registered deemed-compliant FFI (Foreign Financial Institution) is one that has registered with the IRS to comply with the FATCA regulations. A certified deemed-compliant FFI, on the other hand, is one that has self-certified to the IRS that it has already put in place the necessary procedures to report to the IRS. The certified status provides a higher level of assurance to the IRS that the FFI is compliant with the regulations.

A sponsored FFI is a foreign financial institution that is owned or controlled by a U.S. person. A certified deemed-compliant sponsored FFI is a sponsored FFI that has self-certified to the IRS that it has put in place the necessary procedures to report to the IRS. This certification provides the same level of assurance to the IRS as for a certified deemed-compliant FFI.

A restricted distributor is a non-financial foreign entity that is engaged in the business of distributing investment income to its beneficial owners. It is exempt from reporting under FATCA if it meets certain conditions, such as being located in a jurisdiction with an Intergovernmental Agreement (IGA) with the United States and agreeing to report to its tax authority. A nonreporting IGA FFI is a foreign financial institution that is located in a jurisdiction with an IGA but has not agreed to report to its tax authority. It is required to report directly to the IRS.

A foreign government, government of a U.S. possession, or foreign central bank of issue is generally exempt from FATCA reporting requirements. This is because they are considered to be sovereign entities and are not subject to U.S. taxation. An international organization, on the other hand, is not a sovereign entity and may be subject to FATCA reporting requirements if it meets certain conditions, such as having a substantial presence in the United States or conducting business as a financial institution.

An exempt retirement plan is a retirement plan that is exempt from FATCA reporting requirements because it is a qualified retirement plan under the U.S. tax code. An entity wholly owned by exempt beneficial owners, on the other hand, is an entity that is owned entirely by individuals or entities that are exempt from reporting under FATCA, such as charitable organizations or government entities. The entity itself is not exempt from reporting, but it may not have any reportable accounts if all of its beneficial owners are exempt.

A territory financial institution is a financial institution organized or chartered under the laws of a U.S. territory or possession. An excepted nonfinancial group entity is a non-financial entity that is part of a larger group of entities, one or more of which is a financial institution. The key difference lies in the nature of their business activities. While a territory financial institution is primarily engaged in financial activities, an excepted nonfinancial group entity is not.

An excepted nonfinancial start-up company is a non-financial entity that has been in existence for less than 24 months and has not yet commenced business operations. An excepted nonfinancial entity in liquidation or bankruptcy is a non-financial entity that is in the process of being liquidated or has filed for bankruptcy. The primary difference between the two lies in their current business status. A start-up company is yet to begin operations, while an entity in liquidation or bankruptcy is ceasing operations.

A 501(c) organization is a specific type of nonprofit organization recognized by the Internal Revenue Service (IRS) under section 501(c) of the Internal Revenue Code. It is an organization that is exempt from federal income tax under this section. A nonprofit organization, on the other hand, is an organization that uses its surplus revenues to achieve its goals, rather than distributing its surplus income to the owners or shareholders as profit or dividends. Not all nonprofit organizations are 501(c) organizations; some may be tax-exempt under other sections of the tax code.

A publicly traded NFFE (Nondiscriminatory Wage Paying Foreign Entity) or NFFE affiliate of a publicly traded corporation is a foreign entity that is publicly traded on a U.S. or foreign stock exchange or is an affiliate of a corporation whose stock is publicly traded. An excepted territory NFFE is a foreign entity that is organized or chartered under the laws of a U.S. territory or possession and is not publicly traded. The primary difference lies in their public trading status.

An active NFFE is a foreign entity that conducts a trade or business within the United States, while a passive NFFE is a foreign entity that does not conduct a trade or business within the United States and derives its income from sources within the United States primarily as portfolio or investment income. The primary difference lies in their business activities and the source of their income within the United States.

A territory financial institution is a financial institution organized or chartered under the laws of a U.S. territory or possession. An excepted nonfinancial entity is a non-financial entity that is not a financial institution and is not an excepted nonfinancial group entity, start-up company, or entity in liquidation or bankruptcy. The key difference lies in their nature of business activities. While a territory financial institution is primarily engaged in financial activities, an excepted nonfinancial entity is not.

An excepted inter-affiliate FFI (Foreign Financial Institution) is a foreign entity that is considered to be in reporting status with the Internal Revenue Service (IRS) under certain conditions. Specifically, an excepted inter-affiliate FFI is a foreign entity that is a member of a controlled group with a US member and is exempt from reporting under FATCA (Foreign Account Tax Compliance Act) because it is deemed to have a substantial presence in the United States. On the other hand, a sponsored direct reporting NFFE (Non-Financial Foreign Entity) is a foreign entity that is required to report under FATCA even if it is not a financial institution. A sponsored direct reporting NFFE is sponsored by a withholding agent, which is typically a US entity or a foreign financial institution that is subject to FATCA. The key difference between the two is that an excepted inter-affiliate FFI is exempt from reporting under FATCA, while a sponsored direct reporting NFFE is required to report.

Part XXIX of Form W-8BEN-E is the Certification of Status of Beneficial Owner for United States Tax Withholding and Reporting (FATCA) and Certain Other Tax Treaties. This part of the form is used to certify the status of the beneficial owner, which is the person who ultimately owns or controls the entity or the person who is entitled to the income. The purpose of this part of the form is to help the withholding agent determine whether the beneficial owner is subject to FATCA reporting requirements and whether the beneficial owner is eligible for any reduced or zero withholding rates under tax treaties. The form requires the beneficial owner to provide information about their taxpayer identification number, their country of residence, and their status as a US person or a foreign person. The form also requires the beneficial owner to certify that they are not subject to FATCA reporting and that they are eligible for any applicable tax treaty benefits.

Providing false information on Form W-8BEN-E can result in significant penalties. Under the Internal Revenue Code, there are penalties for failing to provide a correct and complete Form W-8BEN-E. Specifically, there is a penalty of $10,000 for each failure to provide a correct statement, and there is a penalty of $50,000 for each failure to keep records required to be kept under the FATCA regulations. In addition, there is a penalty of $10,000 for each failure to provide correct payee identification information, and there is a penalty of $50,000 for each failure to provide correct payee identification information for each account. These penalties can be imposed on both the beneficial owner and the withholding agent. It is important to ensure that all information provided on Form W-8BEN-E is accurate and complete to avoid these penalties.