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Tag Archive for W-8BEN-E

Form W-8BEN And What It’s Used For

Non-U.S. persons must pay U.S. tax on certain kinds of income they receive from U.S. sources. Typically, the income is taxed at a flat rate of 30%. The only way for this tax to be alleviated is if an income tax treaty exists between the U.S. and another country and that treaty authorizes a lower rate of tax.

You might be wondering how the United States collects this tax. For example, the non-U.S. person might decide not to pay it, thus thumbing his nose at the government. In that case, does the U.S. government dispatch secret service agents to all four corners of the globe to track down the tax evader, who may owe only a small amount of tax? Of course not. The U.S. knows all too well that it would be a waste of time and resources to take on the role of a bounty hunter. Read more

Clock Ticking Down – Only Days Left To FATCA Registration

IGA List Expands To 55 (And Mexico IGA Revised)

60 days remain until the July 1st deadline that FATCA’s 30% withholding applies to payments from US sources.

But of immediate importance is the 4 days remaining for foreign financial institutions (FFIs) to register by May 5 with the IRS to obtain a GIIN and to be included on the IRS’ list of participating FFIs in order to avoid the attracting the 30% withholding by US withholding agents.  Yet, as of April 30th, the list of IGAs now to be treated in effect is only, including 28 that have been signed and 27 that have only been agreed in substance.  Firms in the other 100 jurisdictions, many who expected last minute relief, are now in a panic. Read more