Limitation of benefits, or LOB provisions are contained in all recent US income tax treaties and are designed to ensure that a persons (other than individuals) claiming treaty benefits have substantial ties to one (or both) treaty country. LOB provisions do not apply to individuals.

Beginning on January 1, 2017, QI's are required to inform clients regarding the appliable LOB provisions and obtain either Form W-8BEN-E or a written certification of the specific LOB provision as part of the treaty statement. For entity accounts opened before January 1, 2017 QIs are required to obtain a LOB certifcation upon the expiry of Form W-8 or in case the client was documented via the KYC rules by January 1, 2019.

In case an entity is not capable of making a LOB certification then no treaty benefits will be available, however the exemption for portfolio interest may still apply.