QI & FATCA News
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The IRS has released a new Form W-8BEN-E, Certificate of Status of Beneficial Owner for United States Tax Withholding and Reporting (Entities), version April 2016. Significant changes have been made to the chapter 3 treaty certifications, which now require entities to identify the type of limitation on benefits provision applicable in the relevant US income tax treaty and certify such provision is satisfied. The new form allows entities to indicate if the account is not a financial account under FATCA, thus not requiring a chapter 4 certification (line 5, Part I). In addition, changes have been made to the certifications and documentation requirements for certain certified-deemed compliant and nonreporting FFIs, including for Trustee Documented Trusts, Sponsored, Closely Held Investment Vehicles, and Local FFIs. The new form also provides for indication of a sponsored FFIs GIIN, including for FFIs that are certified deemed-compliant under an applicable IGA.
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The IRS has published Notice 2016-08 indicating that it intends to amend the chapter 4 regulations to modify the deadline to submit certifications under the FFI Agreement and eliminate the requirement to report gross proceeds paid to accounts held by non-participating FFIs in 2015.
The notice confirms that the first certification period begins on the date the FFI Agreement is entered and ends on 31 December of the following third calendar year and will continue thereafter on three year cycles. Certification of due diligence completion in relation to pre-existing accounts has been extended to coincide with the FFI Agreement certification period (instead of 60 days following the two-year anniversary of the FFI Agreement). In addition, FFIs will not be required to report foreign reportable amounts paid to accounts held by non-participating FFIs in 2015.
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The IRS has released a revised Form W-8BEN-E and Instructions in draft. Significant changes have been made to the chapter 3 treaty certification (limitation on benefits) in Part III. Other modifications include a box on line 5 in Part I to indicate if the account is not a financial account and clarification of the documentation requirements for FFIs that are nonreporting pursuant to an applicable IGA.
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IRS Notice 2015-66 extends FATCA transitional relief for gross proceeds, passthru payments, limited branches and FFIs, and the requirement to obtain a GIIN for sponsored entities.
