May 23, 2013: Updated Draft of Form W-8EXP for Exempt Entities
Foreign Account Tax Compliance Act (FATCA)
Updated draft of form W-8EXP for exempt entities
The IRS has released another draft of the W-8EXP for exempt entities. Although an updated release was expected, an unexpected substantial change has been made to the form. The updated form now includes a new line 4 for the beneficial owner to select its FATCA status and includes several of the FATCA status types found on the Form W-8BEN-E (e.g., participating FFI, registered deemed-compliant FFI, certain IGA FFI designations, territory FFI, passive NFFE, and the FATCA exempt status types). As with the W-8BEN-E, each FATCA status type has its own certification that must be completed by the beneficial owner. As a result of the new status types and certifications, the updated form has gone from two pages to three pages. Additional changes include the addition of a GIIN checkbox alongside the Foreign TIN checkbox and a required agreement from the signor that he/she will submit a new form within 30 days if any certification made on the form becomes incorrect. As with the prior version of the form, the capacity line has been replaced with a checkbox for the signor to certify that he or she has the capacity to sign on behalf of the entity named on line 1.
Instructions to the forms W-8, reporting forms, and other forms W-8
Instructions to accompany the newly released draft form were not released. The IRS has stated that it would not issue draft instructions and will instead publish final versions of the instructions along with the final versions of the Forms W-8 expected later this year. This leaves many open questions such as the foreign TIN validation requirements, GIIN collection requirements, and many more. Given the final version approach, it does not appear that industry will have an opportunity to comment on any new or missing items in the instructions.
The Form W-8EXP is the fourth updated withholding certificate published in draft form in the past three weeks, following the release of the Forms W-9, W-8BEN for individuals and W-8BEN-E for entities. Another Form W-8IMY should be released in a similar draft form soon and may generally follow the format laid out in the Form W-BEN-E. A new draft of the Form W-8ECI is likely to be issued soon and given the change to the Form W-8EXP, may include the new FATCA statuses and certifications.
Industry has been pushing for the new forms to be released given the short amount time left for FATCA to become effective and the amount of work necessary to update systems, processes, and procedures to accommodate the new forms. Hopefully these recent developments are signs that the wait is almost over.
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