On August 30, 2021, the IRS published a DRAFT Form W-8BEN and Instructions. Similar to the recently published DRAFT Forms W-8ECI and IMY, the BEN incorporates updates related to the rules under sections 1446(a) and 1446(f), foreign taxpayer identification numbers (FTINs), and a few others.
Changes to the face of the form include the following:
- Line 6 FTINs. Broken out into Line 6a for FTINs, similar to old Line 6, and 6b for where FTINs are not required.
- Certifications. Incorporates section 1446(f) certifications that the form relates to the partner’s amount realized from the transfer of a partnership interest subject to withholding under section 1446(f). Further, the language around income has been updated to include income ‘or proceeds’ to which the form relates. Another instance where the forms add the word ‘proceeds.’
- Effectively Connected Income (ECI). In all new forms, the IRS has included additional language around ECI to state that the income is effectively connected with the conduct of a trade or business in the United States.
Changes to the Instructions for Form W-8BEN incorporate updates for Line 10, Special Rates and Conditions, Section 6050Y reporting, and electronic signatures. The key updates include:
- Line 10 Special Rates and Conditions. Updated to include the following representations required by individuals claiming treaty benefits:
- On business profits or gains not attributable to a permanent establishment. This includes a non-U.S. partner that derives gain subject to tax under section 864(c)(8) upon the transfer of an interest in a partnership.
- Under an income tax treaty that provides for treaty benefits related to a remittance-based tax system.
- Section 6050Y reporting. Updated to reference the use of Form W-8BEN by a non-U.S. individual who is the seller of a life insurance contract or interest therein who is a recipient of a reportable death benefit for purposes of reporting under section 6050Y.
- Electronic signature updates. Updated to include additional guidance in the final regulations issued under chapter 3 regarding the use of electronic signatures on withholding certificates. These rules state that a withholding agent may rely on an electronically signed withholding certificate if the beneficial owner provides any additional information or documentation requested by the withholding agent to support that the form was signed by the beneficial owner or any other person authorized to do so. With a reference to Regulations section 1.1441-1(e)(4)(i)(B).
Check out the DRAFT Form W-8BEN here:
and the DRAFT Instructions to Form W-8BEN here: