Tax & Accounting Blog

New Versions of Forms W-8 Are Being Planned

1099, International Reporting & Compliance, ONESOURCE, Tax Information Reporting, Trust Tax, W-8 & W-9 Foreign Reporting, Withholding Management June 28, 2011

The IRS is working on changes to the Forms W-8 you use for documentation that a payee is a foreign person, and documentation that a foreign beneficial owner of income is entitled to a reduced rate of tax withholding.

The need for new Forms W-8 comes from FATCA, the Foreign Account Tax Compliance Act, most of which takes effect at the start of 2013.  But, the effects on W-8 documentation are broad because the forms will change for everyone, whether or not you’re making a payment that falls under the FATCA rules.

Instead of the current Form W-8BEN that’s used for both individual persons and various types of entities, the IRS has said in public meetings that a new type of individual W-8BEN will be created for the documentation of individual non-US persons.  Form W-8BEN is the Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding.

 It is expected that the IRS will also develop a handful of new Forms W-8 for documentation of foreign entities.  There may be separate new W-8s for certifications from foreign financial institutions that agree to report US owners to the IRS; certifications from non-agreeing foreign financial institutions; and, certifications from non-financial foreign entities. 

Drafts of the new W-8s may be issued for public comment in the fall of this year.  The final new forms will be needed before the end of 2012 so payers can get the necessary documentation in place before making any related payments in 2013.