Tax Information and Reporting

Initial Application & Data Collection

All non-US persons and entities are required to complete IRS Form W-8 to certify your country of tax residence and to establish whether you qualify for a reduced rate of withholding when opening an account. Forms W-8 are not provided to the IRS.

Jump to a section

• W-8
• W-8BEN
• W-8IMY

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Valid Form W-8

Forms W-8 are valid for the year in which they are signed and for the next three calendar years. For example, a Form W-8BEN signed on March 5, 2010, remains valid through December 31, 2013, and must be resubmitted to IB no later than January 30, 2014.

Generally, tax is withheld at a rate of 30% on payments of US source stock dividends and substitute payments in lieu. The rate of withholding may be reduced if there is a tax treaty between your country of tax residence and the US.

Updating Form W-8

Forms W-8 are valid for the year in which they are signed and for the next three calendar years. For example, a Form W-8BEN signed on March 5, 2010, remains valid through December 31, 2013, and must be resubmitted to IB no later than January 30, 2014.

Note: IB will send you an email when you are required to resubmit your Form W-8.

Requirement to Complete Form W-8

Form W-8, Certificate of Foreign Status, must be on file with IB. This form must be renewed every three years. If the form W-8 is no longer valid, IB will assume that you are a non-US person and withhold US tax at 30% on interest, dividends, and payments and lieu. Treaty rates, if applicable will no longer apply.

Note that if you complete Form W-8 you will not receive a Consolidated Form 1099, but you may receive Form 1042S.

Withholding Penalty

If you fail to provide a Form W-8, or do not resubmit a new W-8 when prompted upon the three-year expiration, additional withholding will apply. IB encourages its customers to consult with their tax advisors for further guidance on how to seek relief for any tax withheld.

Refer to information below for the specific type of W-8 you should complete and how long your Form W-8 is valid from the date signed.

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Form W-8BEN (Individual)

Click here for a sample Form W8-BEN

Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding, allows you to certify that you are a not a US person and claim treaty benefits under an existing tax treaty between the US and your country of tax residence, if applicable.

You should complete Form W-8BEN if:

• You are opening an individual or joint account and are not a US Citizen, green card holder or legal resident of the US.
• You are the representative of an entity that is not organized in the US but is recognized as a corporation under US law. Refer to a list of entities considered to be per se corporations.
• You represent a foreign entity and you have made an election on IRS Form 8832 to be treated as a corporation for US tax purposes.
• You are a foreign tax-exempt organization or foreign private foundation that is not a recognized US charity.
• You are the trustee of a complex trust as defined under US law.
• You are the representative of an estate.

Part I identifies the name, location and the beneficial owner, which for purposes of Forms W-8, is the owner of the account.

In Part II you must certify your country of tax residence or incorporation in order to claim tax treaty benefits, if you are the resident of a treaty country.

How Long Is Form W-8BEN Valid?

A W-8BEN (Individual) completed without a US taxpayer identification number, is in effect beginning on the date signed until the last day of the third succeeding calendar year, in general three years. If a change in circumstances causes any information on the form to be incorrect, this will render the form invalid. Towards the end of the three-year period you will receive an email request to resubmit your W-8BEN (Individual) form.

You are not required to resubmit Form W-8BEN (Individual) if you have a US taxpayer ID or ITIN and provided the number on the form.

W-8BEN-E (Entities)

On April, 2014 the IRS released the new 2014 Form W-8BEN-E (2014) that is updated with FATCA and QI entity classification reporting requirements.

The newest version of Form W-8BEN-E must be used by entities that are beneficial owners of a payment, or of another entity that is the beneficial owner. The form has thirty parts, which the draft form only had twenty-seven. All filers will complete Parts I and XXIX.

Part I of the form requires general information, the QI status, and the FATCA classification of the filer. Question 4 of Part I requests the QI status. If the filer is a disregarded entity, partnership, simple trust, or grantor trust, then the filer must complete Part III if the entity is claiming benefits under a U.S. tax treaty.

Question 5 requests the FATCA classification of the filer. The classification indicated determines which one of the Parts IV through XXVIII must be completed.

Part XXIX requires certification, under penalty of perjury, by the payee or a person authorized to sign on the payee’s behalf. This part of the final form also contains the following that did not appear in the prior W-8BEN form: "I agree that I will submit a new form within 30 days if any certification made on this form becomes incorrect."

Note that if the filer is a passive NFFE, it must complete Part XXVI as well as Part XXX if it has substantial U.S. owners. For a Passive NFFE, a specified U.S. person is a substantial U.S. owner if the person has more than a 10 percent beneficial interest in the entity.

Completion of the other parts of the final form W-8BEN-E will depend upon the FATCA classification of the filer. The classifications on the newest version Form W-8BEN-E maintain the classification of a Restricted Distributor (in the final form Part XI)

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Form W-8IMY

Form W-8IMY is submitted generally by a payment recipient (the “filer”) with non-beneficial owner status, i.e. an intermediary. Such intermediary can be a U.S. branch, a qualified intermediary, a non-qualified intermediary, foreign partnership, foreign grantor or a foreign simple trust. Form W-8IMY requires a tax identification number.

Part I of the Form adds FATCA classification. Part I of the form requires general information, the Chapter 3 QI status, and the Chapter 4 FATCA classification of the filer.

Part II Disregarded Entity or Branch Receiving Payment. Part II of this form is to be completed if the entity is a disregarded entity or a branch receiving payment as an intermediary. Part II only applies to branches of an FFI outside the FFI’s country of residence.

Question 4 of Part I requests the QI status. If the filer is a Qualified Intermediary, the filer must complete Part III, Qualified Intermediary. If the filer is a Nonqualified Intermediary, the filer must complete Part IV, Nonqualified Intermediary.

Territory Financial Institutions complete Part V. U.S. Branches complete Part VI.

Withholding Foreign Partnership or Withholding Foreign Trusts complete Part VII.

Nonwithholding Foreign Partnership, Nonwithholding Foreign Simple Trust, and Nonwithholding foreign grantor trusts must complete Part VIII.

Question 5, Part I requests the FATCA classification of the filer. The classification indicated determines which one of the Parts IX through XXVII must be completed.

Chapter 4 Status Certifications Parts IX – XXVI

Parts IX – XXVII of this form address the FATCA Status of the entity.