The Tax Times: FATCA FAQs Provides for Substituted Form W-8's

Wednesday, December 17, 2014

FATCA FAQs Provides for Substituted Form W-8's

IRS has updated its list of frequently asked questions (FAQs) on the Foreign Account Tax Compliance Act (FATCA) to explain what is a "Similar Agreed Form" that can be used instead of the self-certification made on Form W-8, Certificate of Foreign Status, as provided in Annex I of both the Model 1 and Model 2 intergovernmental agreements (IGAs).

IRS also clarified when a nonreporting financial institution in a jurisdiction with a Model 1 IGA in effect is treated as a certified deemed-compliant foreign financial institution (FFI) and isn't required to register.

Under the category titled "General Compliance," IRS added a new FAQ (#8) to address what would be considered a "Similar Agreed Form" which, as stated in Annex I of the Model 1 or Model 2 IGA, could be used instead of the self-certification made on Form W-8.

IRS said that a similar agreed form could include, for example, a substitute Form W-8BEN, W-8BEN-E, W-8ECI, W-8EXP, or W-8IMY, if its content is substantially similar to IRS's official Form W-8BEN, W-8BEN-E, W-8ECI, W-8EXP, or W-8IMY, and the partner jurisdiction doesn't decline such treatment. A substitute Form W-8 is generally valid only if it contains the same penalties of perjury statement and certifications as the official forms and the required signature.

Filers could:

Develop and use a substitute form that is in a foreign language, if they make an English translation of the form and its contents available to IRS upon request.
Combine Forms W-8BEN, W-8BEN-E, W-8ECI, W-8EXP, and W-8IMY into a single substitute form.
Provide a substitute form that doesn't include all of the chapter 4 statuses provided on the Form W-8, as long as it includes any chapter 4 status for which withholding may apply (e.g., the categories for a nonparticipating FFI or passive NFFE).
Incorporate a substitute Form W-8 into other business forms customarily used, such as account signature cards, if the required certifications are clearly set out.