Transcription
Guidelines for Completion of the Form W-8BEN-E and Foreign Account TaxCompliance Act (FATCA) Entity Classification GuideThis information is made available for general reference only. It does not constitute legal or tax advice. CitigroupInc. (Citi), its affiliates, and its employees are not in the business of providing tax or legal advice to any taxpayeroutside of Citi and its affiliates. These guidelines are not intended or written to be used, and cannot be used orrelied upon, by any such taxpayer for the purpose of avoiding tax penalties. This information was prepared bytax experts at a non-affiliated third party at Citi’s request for your reference only. We encourage you to seekthird party professional advice regarding your personal tax situation.
ContentsGuidelines for Completion of the Form W-8BEN-E and Foreign Account Tax Compliance Act (FATCA)Entity Classification Guide . 1Contents . 2Introduction . 3Section One: Guidelines for Completion of the Form W-8BEN-E. 4Details on Completing the W-8BEN-E Form . 4Part I: Identification of Beneficial Owner. 4Part II: Disregarded Entity or Branch Receiving Payment. 8Part III: Claim of Tax Treaty Benefits. 8Parts IV - XXVIII: Chapter 4 Certifications . 9Part XXIX: Substantial U.S. Owners of Passive NFFE . 9Part XXX: Certification . 10Additional Comments . 10Section Two: Foreign Account Tax Compliance Act (FATCA) Entity Classification Guide . 11FATCA Entity Classification: Summary Guidance. . 11Step One: Is the entity a financial institution?. 13Step Two: If the entity is a financial institution, has its country of organization or location executed anIntergovernmental Agreement (“IGA”) with the U.S.?. 14Step Three: Does the financial institution qualify for a Deemed-Compliant status? . 15Registered Deemed-Compliant Institutions . 15Certified Deemed Compliant Institutions . 15Financial Institutions that do not qualify for Deemed-Compliant Status . 16Step Four: The entity is not an FFI. Is the entity an Exempt Beneficial Owner (“EBO”)? . 17Step Five: If the entity is not an EBO, then it will be a Non- Financial Foreign Entity (“NFFE”). The first step isto determine if it is an Excepted NFFE. . 18Step Six: If the entity does not qualify as a Financial Institution, Exempt Beneficial Owner, or Excepted NFFE,it must be classified as a Passive NFFE. . 19Investment Entities: Determining FATCA Classifications for Investment Entities . 20Appendix: Important Definitions . 22Contents August 2022Page 2 of 23
IntroductionThis document has two main sections as follows: Section One: Guidelines for Completion of the Form W-8BEN-E.Section Two: Foreign Account Tax Compliance Act (FATCA) Entity Classification Guide.Please DO NOT USE this document if the entity completing the Form is an intermediary or flow through entitysuch as a partnership or grantor trust. In those cases, please refer to the Form W-8IMY.The following guidelines are provided for reference purposes and do not represent tax advice. Pleaseconsult with your tax or legal advisor should you need additional assistance in completing this Form.The Form W-8BEN-E should only be completed by a non-U.S. entity. This means: Corporations and partnerships cannot use this form if they are incorporated, formed, or otherwiseorganized in the U.S.Estates cannot use this form if the decedent was a U.S. person.Trusts cannot use this form if the trust is both subject to the control of a U.S. court and all substantialdecisions of the trust are made by one or more U.S. persons.A non-U.S. entity which is disregarded from its sole owner cannot complete this form if that sole owneris a U.S. person.Please note: the instructions for Form W-8BEN-E in this document are specific to the October 2021 version.Introduction August 2022Page 3 of 23
Section One: Guidelines for Completion of the Form W-8BEN-EDetails on Completing the W-8BEN-E FormPlease note: the instructions for Form W-8BEN-E in this document are specific to the October 2021 version.Part I: Identification of Beneficial Owner1.2.Name of Entity or Organization: Enter the full name of the legal entity that is the “Beneficial Owner.” The entity name should conform to the name as shown in the formation document, including anyamendments. Please do not use any abbreviations other than those commonly used to indicate the type of entity(e.g., S.A., A.G., etc.).Country of Incorporation or Organization: Enter the name of the country in which the legal entity was created, organized, incorporated orgoverned. Please do not abbreviate the country name. Note: If this country is the U.S., you ordinarily should not be completing a Form W-8, rather youshould complete the Form W-9.3.Name of Disregarded Entity Receiving the Payment (if any): Does NOT apply to legal entities otherthan financial institutions.4.Chapter 3 Status: Mark the one box that applies.Section One: Guidelines for Completion of the Form W-8BEN-E August 2022Page 4 of 23
You should determine the classification of the legal entity based on U.S. tax principles. There are now two classifications for foreign government entities: an integral part of a foreigngovernment or an entity that is controlled by a foreign government, as governed by TemporaryRegulations section 1.892-2T.i. An “integral part” of a foreign government is any person, body of persons,organization, agency, bureau, fund, instrumentality, or other body, however designated,that constitutes a governing authority of a foreign country. The net earnings of thegoverning authority must be credited to its own account or to other accounts of theforeign sovereign, with no portion inuring to the benefit of any private person.An integral part does not include any individual who is a sovereign, official, oradministrator acting in a private or personal capacity.ii. A “controlled entity” of a foreign government is an entity that is separate in form from aforeign government or otherwise constitutes a separate judicial entity by meeting thefollowing requirements: 1) It is wholly owned and controlled by a foreign sovereigndirectly or indirectly; 2) It is organized by the laws of the foreign sovereign it is ownedby; 3) Its net earnings are credited to its own account or to other accounts of the foreignsovereign, with no portion of its income inuring to the benefit of any private person; and4) It assets vest in the foreign sovereign upon dissolution.Please note, if the entity named on Line 1 is a hybrid entity claiming tax treaty benefits, you must tickthe YES box.5.Chapter 4 Status (FATCA Status):Section One: Guidelines for Completion of the Form W-8BEN-E August 2022Page 5 of 23
6. Mark the one box that applies and complete the Part of the Form associated with that FATCAstatus. To determine whether a particular FATCA status applies in your situation, please read thequalifications for that status as recited in the part of the Form associated with that status. If you need additional information, you should refer to Section Two of this document (the FATCAentity classification guide), the complete IRS instructions to Form W-8BEN-E, or consult your legalor tax advisor.Permanent Residence Address: Enter the permanent residence address of the entity identified on Line 1. The permanent residence address is the address in the country in which the entity claims to be aresident for purposes of the country’s income tax. If the entity does not have a tax residence in any country, the permanent residence address is thelocation of the entity’s principal place of business.Please do not enter: The address of a financial institution (unless you are a financial institution providing your ownaddress); A post office box; (unless that is the registered address of the entity) An in care of address. (unless that is the registered address of the entity) An address used solely for mailing purposes (provide on line 7)If you enter an in care of address or a post office box you must provide a copy of a formation documentconfirming that this is the registered address of the entity. Generally, you will find the registeredaddress to be included in the entity’s Articles of Association, Certificate of Incorporation, or other legalentity governing document.7. Mailing Address: Please enter the address to which correspondence should be sent if this is different than thepermanent residence address. If this is a U.S. address, please provide a copy of a formation document supporting that the entityis organized outside the U.S.8.U.S. Taxpayer Identification Number: If the entity named on Line 1 has a U.S. taxpayer identificationnumber, please list it here.9.(a) GIIN: If the entity named on Line 1 has registered with the U.S. Internal Revenue Service as aParticipating Foreign Financial Institution, a Reporting Model 1 FFI, a Reporting Model 2 FFI, aSection One: Guidelines for Completion of the Form W-8BEN-E August 2022Page 6 of 23
Registered Deemed Compliant FFI (including a Sponsored FFI), or a Direct Reporting NFFE(including a Sponsored Direct Reporting NFFE ) please enter the Global IntermediaryIdentification Number (“GIIN”) in the box for 9a. You must also provide your GIIN on line 9 if you are a nonreporting IGA FFI that is (1) treated asregistered deemed-compliant under Annex II to an applicable Model 2 IGA or (2) a registereddeemed-compliant FFI under the Regulations(b) Foreign TIN (Tax Identifying Number): If the entity named on Line 1 has been issued a taxpayer identification number by the country inwhich it claims tax residence, enter the Foreign TIN in 9b. This box must be completed for allaccounts maintained within the U.S. The only time you are not required to include a foreign taxpayer identification number is when thejurisdiction in which the entity is tax resident in does not issue taxpayer identification numbers orthe entity is otherwise not required to obtain a taxpayer identification number. If that is the case,see box 9c.(c) Check if FTIN not legally required: If you are an account holder as described for purposes of line 9b and you are not legally requiredto obtain an FTIN from your jurisdiction of residence (including if the jurisdiction does not issueFTINs), check this box. By checking this box you will be treated as having provided an explanation for not providing anFTIN on line 9b. If you wish to provide a further explanation, you may do so in the margins of thisform or on a separate statement attached to this form.10. Reference Number: If the entity filing the Form W-8BEN-E is the single owner of a disregarded entity,use line 10 to identify the disregarded entity (by name) and thereby associate the Form with an accountheld by the disregarded entity. A disregarded entity is an entity that is disregarded as an entity separatefrom its single owner for U.S. tax purposes.Section One: Guidelines for Completion of the Form W-8BEN-E August 2022Page 7 of 23
Part II: Disregarded Entity or Branch Receiving Payment11-13This part applies only to a disregarded entity that has its own GIIN or a branch that is an FFI located in acountry other than the country identified on line 2.Part III: Claim of Tax Treaty Benefits14. Treaty Claim: If the entity named on Line 1 is making a claim for reduced withholding under atreaty on certain payments of U.S. source income, please tick the box for 14a and write in the countryfor which you are claiming treaty benefits. This would be the country of which the entity named on Line1 is a resident for purposes of that country’s income tax.You must also tick the box to certify on Line 14b that the entity derives the items of income for whichtreaty benefits are claimed and meets any applicable limitation on benefits (LOB) provisions. If alimitation on benefits article is applicable, you must also tick the box corresponding to the specificprovision of the LOB article under which you qualify. If you are a resident of a foreign country that hasentered into an income tax treaty with the United States that does not contain an LOB article, this mustalso be indicated on line 14b.Section One: Guidelines for Completion of the Form W-8BEN-E August 2022Page 8 of 23
For country-specific information on LOB articles, please see the IRS Tax Treaty Table on Limitationson Benefits (LOB) Articles.If you have questions as to whether the entity is eligible to claim treaty benefits, please contact yourlegal or tax advisor.15. Special Rates and Conditions: This line is generally not applicable to treaty benefits under an interestor dividends article of a treaty. However, if the entity named on Line 1 is a pension or tax-exemptentity that is claiming a special treaty rate applicable specifically to a pension or tax-exemptorganization or if a special rate would apply to the entity because of a status or condition particular tothat type of entity – e.g., Japanese financial institution, please pay particular attention to determinewhether this field is required. Additionally, this field is generally required for entities claiming treatybenefits on business profits or gains not attributable to a permanent establishment, including for aforeign partner that derives gain subject to tax under section 864(c)(8) upon the transfer of an interestin a partnership. This would include the transfer of publicly traded partnership (PTP) interest undersection 1446(f).Note 1: claims for treaty benefits on income other than interest or dividends from publicly traded securities willrequire either a U.S. taxpayer identification number be provided on Line 8 or a foreign taxpayer identificationnumber be provided on Line 9b.Note 2: claims for treaty benefits related to sections 1446(a) and 1446(f) require a U.S. taxpayer identificationnumber be provided on Line 8.Note 3: PTPs will generally have a permanent establishment in the US due to the nature of their business. Insuch cases, a foreign partner in a PTP will not satisfy the treaty requirements as their availability of treatybenefits depends on whether the particular PTP itself has a US permanent establishment.Parts IV - XXVIII: Chapter 4 CertificationsPlease review the Chapter 4 (FATCA) status claimed on Line 5. If the status claimed states “Complete Part.”then you must complete the section indicated. You should only complete the section corresponding to yourclaimed FATCA status. Please read the applicable certifications carefully and tick the appropriate boxes. Insome instances, you may be required to fill in additional information. If you fail to provide the required additionaldocumentation, your Form cannot be validated.Please pay particular attention to the certifications if the entity named on Line 1 is a Nonreporting IGA FFI. Inaddition to ticking the box on Line 26, you must also indicate the applicable IGA country, whether it is a model 1or model 2 IGA, and provide the specific category of FFI described in Annex II of the applicable IGA Agreementor the Treasury Regulations. If you are claiming a status under the Treasury Regulations, you must alsoreference the relevant regulations section on this line. If the entity named on Line 1 is a trustee documentedtrust or a sponsored entity, the name of the trustee or sponsor, and that party’s status as a U.S. or non-U.S.person must also be entered.If you have questions as to whether the entity named on Line 1 meets the requirements stated in thecertifications, please contact your legal or tax advisor.Part XXIX: Substantial U.S. Owners of Passive NFFEIf you ticked Passive NFFE on Line 5 of Part I, and ticked box 40c in Part XXVI, you must provide the name,address, and TIN of each substantial U.S. owner. If you are providing details of controlling U.S. persons (asdefined in an applicable IGA) to a Model 1 FFI or reporting Model 2 FFI with which you maintain an account, youmust provide the name, address and TIN of any controlling U.S. person(s) in this section.Section One: Guidelines for Completion of the Form W-8BEN-E August 2022Page 9 of 23
Part XXX: CertificationTo execute the Form W-8BEN-E and attest to the correctness and completeness of the information andrepresentations provided on the Form, an authorized individual must sign the form and provide all the requiredinformation in the spaces indicated in Part XXX:a. Mark the box to certify that the signatory has capacity to sign for the entity identified on line 1. This linehas now moved to above the signature line to become a part of the certification.b. Sign the form by handc. Print the name of the signerd. Enter the date on which the Form is signed in a MM-DD-YYYY formatAn individual who has capacity to sign a tax form on behalf of a corporation includes an officer or anotherindividual authorized to sign the form by a board resolution or a tax power of attorney.Note on Electronic Signatures: A withholding agent may allow you to provide this form with an electronicsignature. The electronic signature must indicate that the form was electronically signed by a person authorizedto do so (for example, with a time and date stamp and statement that the form has been electronically signed).Simply typing your name on the signature line is not an electronic signature.Additional CommentsPlease deliver the completed Form W-8BEN-E to your Citi contact person by hand, postal service, courier, faxor email with the Form attached. If you deliver a paper Form to Citi, you must provide us with the handsigned original and not a photocopy.Citi may contact you for additional information as it reviews the Form. If you receive such a request, pleaserespond as promptly as possible to assist in making sure that your account is appropriately documented.As a reminder, these guidelines are provided for reference purposes only and do not represent taxadvice. Please consult with your tax or legal advisor should you need additional assistance incompleting the Form.Section One: Guidelines for Completion of the Form W-8BEN-E August 2022Page 10 of 23
Section Two: Foreign Account Tax Compliance Act (FATCA) EntityClassification GuideIn order to comply with the requirements of the Foreign Account Tax Compliance Act (“FATCA”), Citi is requiredto collect a valid Form W-8 or other acceptable documentation from non-U.S. clients. A key step in completingthe form involves determining the appropriate FATCA classification for the entity.This guide is designed to provide useful guidance to assist in that determination process. However, it is notintended to be and should not be used as a substitute for reviewing the U.S. Treasury Regulations, an applicableIntergovernmental Agreement (“IGA”), or other relevant guidance.This document does not represent tax advice and should not be used as a substitute for obtainingqualified tax or legal guidance.FATCA Entity Classification: Summary Guidance *.*Itis strongly recommended that you refer to local implementation guidance issued by local tax authority as well as the text ofthe IGA itself, for potential subtle classification differences which could impact the specific FATCA complianceresponsibilities of the entitySection Two: Foreign Account Tax Compliance Act (FATCA) Entity Classification Guide August 2022Page 11 of 23
Section Two: Foreign Account Tax Compliance Act (FATCA) Entity Classification Guide August 2022Page 12 of 23
Step One: Is the entity a financial institution?The FATCA definition of financial institution is very broad, and there are multiple types of financial institutions. Ifthe entity named on Line 1 is engaged in the following types of businesses, the entity will be classified as afinancial institution.Type of FFIDescriptionDepositoryInstitutionAccepts deposits in the ordinary course of a banking or similar business, e.g., bank,credit union.Custodial InstitutionHolds financial assets for the account of others, e.g., broker dealer, clearingorganization.Investment EntityEngages in trading, investing, managing or administering financial assets on behalfof customers. May also trade or invest in financial assets on its own behalf but bemanaged by an FFI - e.g., private equity fund.Specified InsuranceCompanyIssues cash value insurance or annuity contracts. Institutions issuing only generalinsurance or term life insurance are NOT specified insurance companies and shouldproceed to Step 5 for NFFEs.Serves as holding company or treasury center for a commonly owned group thatHolding Companies / includes at least one FFI OR a treasury center which primarily enters into financialTreasury Centerstransactions with FFIs. Rules relating to these entities vary across jurisdictions, soplease consult your local legal or tax advisor for further details.Generally, institutions falling into one of the above categories are required to register with the IRS and commit tocompleting certain due diligence, withholding, reporting, and governance requirements in order to be consideredFATCA compliant.If the entity is a financial institution, please proceed to Step Two. A special supplement specificallyaddressing Investment Entities is included at the end of this document.If the entity is not a financial institution, please proceed to Step Four.Section Two: Foreign Account Tax Compliance Act (FATCA) Entity Classification Guide August 2022Page 13 of 23
Step Two: If the entity is a financial institution, has its country of organization or location executed anIntergovernmental Agreement (“IGA”) with the U.S.?Financial institutions located in jurisdictions which have executed an Intergovernmental Agreement (“IGA”) withthe U.S. will generally be classified as either Reporting Model 1 IGA FFIs or Reporting Model 2 IGA FFIs. If youare unsure as to whether a specific country has executed an IGA with the U.S. or whether it is considered to Pages/FATCA.aspx . Financial institutions in countries with Agreements in Substance should alsorefer to the IRS website to confirm that the IGA is still listed as “having an IGA in Effect”. If so, a Financial Institutionin a Model 1 IGA jurisdiction for example would generally classify itself as a Reporting Model 1 FFI as opposed toa PFFI.If the entity is a financial institution in a Model 1 or Model 2 IGA jurisdiction, it is strongly recommended that yourefer to any local implementation guidance issued by the local tax authority as well as the text of the IGA itself.These documents may provide for subtle classification differences which could impact the specific FATCAcompliance responsibilities of the entity.If the entity is tax resident in a country which has entered into an IGA, it is generally required to register on theIRS FFI Portal and obtain a GIIN. The applicable FATCA status once registered would be either Reporting Model1 FFI or Reporting Model 2 FFI. Both of these statuses will require a GIIN to be included on the Form W-8BENE. Please enter the GIIN on Line 9a.It is no longer permissible for sponsored entities to enter the sponsoring entity’s GIIN on line 9a. Effective January1, 2017, certain sponsored entities need to obtain and include their own GIIN on line 9a.After determining whether the financial institution is resident in an IGA jurisdiction, please proceed toStep Three.Section Two: Foreign Account Tax Compliance Act (FATCA) Entity Classification Guide August 2022Page 14 of 23
Step Three: Does the financial institution qualify for a Deemed-Compliant status?Certain institutions are deemed to present a low risk of tax avoidance and therefore may have simplified FATCAcompliance responsibilities.Is the institution located in a Model 1 or Model 2 IGA jurisdiction? If yes and it qualifies for a Registered orCertified Deemed Compliant status under the regulations (per below tables), it should NOT tick RegisteredDeemed Compliant FFI. Rather it should select Nonreporting IGA FFI and complete Part XII.The remainder of this step and actions described within the tables are for those financial institutions that are notlocated in a Model 1 or Model 2 IGA jurisdiction but have a Deemed-Compliant status accordingly.Registered Deemed-Compliant InstitutionsRegistered deemed-compliant institutions are required to register and obtain a GIIN. The chart below lists thevarious types of registered deemed-compliant institutions. Please note that the descriptions included are generaland that there are a number of specific requirements which must be met for each status. An entity that wouldpotentially qualify for one of these statuses is encouraged to seek legal or tax advice to understand whether itwould in fact qualify, as well as what the ongoing compliance requirements would be for the status.Registered Deemed-Compliant Classifications:StatusNext Steps:Financial Institution with a Local Client Base - Certain financial institutionslicensed as a financial institution in their country of operation where at least 98%of financial accounts by value are held by residents of its country of formation.Non-Reporting Member of a Participating FFI group - An affiliate of aThese entities mustParticipating FFI group which either closes reportable accounts or transfers them register on the IRS FFIto another FFI in its group.Portal and obtain a GIINin order to be consideredFATCA compliant.Restricted Funds - An investment entity which includes prohibitions on investorswhich are U.S. persons, NPFFIs / NPFIs, and Passive NFFEs with substantialThe entity would tickU.S. owners.Registered deemedcompliant FFI (otherthan a reporting Model1 FFI, sponsored FFI, ornonreporting IGA FFIQualified Credit Card Issuer - An FFI solely because of issuing credit cards.The FFI must implement specific requirements around refunding credit balancesin excess of 50,000.Certified Deemed Compliant InstitutionsCertified deemed-compliant institutions are only required to certify their compliance with the specificrequirements for each status. Please note that the descriptions included are general and that there are a numberof specific requirements which must be met for each status. An entity that would potentially qualify for one ofthese statuses is encouraged to seek legal or tax advice to understand whether it would in fact so qualify.The following schedule details the specific certified deemed-compliant statuses as well as the appropriate Part ofthe Form W-8BEN-E to complete.Section Two: Foreign Account Tax Compliance Act (FATCA) Entity Classification Guide August 2022Page 15 of 23
Certified Deemed-Compliant Classifications:If Status Is:Then:Nonregistering Local Bank - Operates solely as a bank and does not have afixed place of business outside its country of incorporation.Refer to Part V of theForm W-8BEN-E.FFI with only Low-Value Accounts - An FFI other than an investment entitythat does not have accounts with balances exceeding 50,000 and its assets donot exceed 50 million in value.Refer to Part VI of theForm W-8BEN-E.Sponsored, Closely Held Investment Vehicle - An investment entity with lessthan 20 owners which has entered an agreement for a sponsor to manage itsFATCA compliance responsibilities.Refer to Part VII of theForm W-8BEN-E.Limited Life Debt Investment Entity - Certain securitization vehicles designedto hold debt until maturity or the liquidation of the vehicle.Refer to Part VIII of theForm W-8BEN-E.Certain Investment Entities that do not Maintain Financial Accounts Institution which provides investment advice or management and does notmaintain financial accounts for clients.Refer to Part IX of theForm W-8BEN-E.Financial Institutions that do not qualify for Deemed-Compliant StatusIf the institution qualifies as a f
10. Reference Number: If the entity filing the Form W-8BEN-E is the single owner of a disregarded entity, use line 10 to identify the disregarded entity (by name) and thereby associate the Form with an account held by the disregarded entity. A disregarded entity is an entity that is disregarded as an entity separate
