THE FIRM BLOG OF FLOTT & CO. PC

Once people and businesses cross borders, they by necessity encounter two legal and tax systems that must be reconciled: their own and the foreign country where they wish to operate.

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Recent Articles

Final Version of W8-BEN-E Released: New FATCA Compliance Requirements for non-US Entities

On March 28, 2014, the IRS released the final version of the W-8BEN-E. The W-8BEN-E is an important step in enforcing FATCA, and replaces the W-8BEN for non-US entities receiving payments from US payors. The purpose of the W-8BEN-E for non-US entities to certify their FATCA status. However, it is still the responsibility of the US payor to request the W-8BEN-E from the non-US entity.

As mentioned above, the major difference between the W-8BEN-E and the W-8BEN is the addition of the FATCA status question in Part 1 of the new form. Currently, the questions lists 31 different FATCA statuses for a non-US entity to select from. Adding to the complexity, many of FATCA statuses are newly minted terms created specifically for FATCA. This includes terms such as  “Non-Financial Foreign Entity” or “NFFE”, which most people are unfamiliar with. Fortunately, after a non-US entity has determined its FATCA status for the first time, it will be able to complete all future W-8BEN-E requests using the same FATCA status, unless its circumstances change. Going forward, non-US entities should familiarize themselves with the W-8BEN-E and anticipate that all US payors will request the W-8BEN-E instead of the W-8BEN.