IRS Updates Instructions for the Requester of Forms W-8BEN, W-8BEN-E, W-8ECI, W-8EXP, and W-8IMY

Adam Rivera
May 11, 2018

The IRS has updated the Instructions for the Requester of Forms W-8BEN, W-8BEN-E, W-8ECI, W-8EXP, and W-8IMY.


There are a number of changes from the previous revision of the Instructions:

  • Chapter 3 Withholding Changes
    • Withholding agents must also withhold under section 1443 on certain payments to foreign tax-exempt organizations that are unrelated business taxable income or subject to the 4% excise tax imposed by section 4948
    • Withholding under chapter 3 is also not required if the payment is made to a U.S. branch of a foreign insurance company or foreign bank or a territory financial institution that agrees to be treated as a U.S. person under the requirements and provides a valid Form W-8IMY certifying to such status.
  • Chapter 4 Withholding Changes
    • If you are a withholding agent, you must withhold 30% of any payment that is a withholdable payment made to a nonparticipating FFI that is not an exempt beneficial owner or to a non-financial foreign entity (NFFE) that is not an excepted NFFE and does not disclose its substantial U.S. owners (or certify that it has no substantial U.S. owners).
  • New sections introduced
    • Section 1446 Responsibilities
    • Other Uses of Form W-8
    • Foreign TINs
  • Final and temporary regulations under chapters 3 and 4 modified certain requirements with respect to the collection of Forms W-8, the contents of their forms, their validity periods, and the due diligence requirements of withholding agents
    • If the presumption rules are applies to treat a person as a foreign person, the 30% withholding rate applied and cannot be reduced
    • Presumption rules have also been updated
    • Updated notes for validating W-8 forms
      • If you receive a Form W-8EXP without a foreign TIN (or a reasonable explanation for why the account holder has not been issued a foreign TIN) on line 8b (or on a separate statement) when required, you must treat the form as invalid for payments of U.S. source income reportable on Form 1042-S (as determined before the application of this requirement).
    • The rules for withholding and reporting certain payments made to qualified derivative dealers (QDDs) were modified.
      • Specifically, certain amendments such as delaying withholding under chapters 3 and 4 on dividends paid to a QDD in its equity derivatives dealer capacity until 2019
    • New revised guidance for certain withholding agents to obtain and report taxpayer identification numbers and dates of birth of their account holders
    • New instructions for providing substitute W-8 Forms

To view the updated Instructions for the Requester of Forms W-8BEN, W-8BEN-E, W-8ECI, W-8EXP, and W-8IMY, please click the link below here.

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Adam Rivera

Adam Rivera is a member of the Regulatory Analysis Team’s Direct Tax division at Sovos. His main areas of focus are Federal and State Tax Withholding and Affordable Care Act (ACA) Reporting. Prior to Sovos, Adam worked as a legislative aide in the Florida House of Representatives. He also has experience in securities law, focusing on securities litigation and researching emerging crowdfunding methods of raising capital. Adam is a member of both the Massachusetts and Florida Bars. He earned his B.A. from the University of Florida and his J.D. from the University of Miami.
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