Direct account holders

Withholding certificates

You have reason to know that a Form W-8 provided by a direct account holder that is a foreign person is unreliable or incorrect if:

1. The Form W-8 is incomplete with respect to any item on the form that is relevant to the claims made by the account holder,
2. The Form W-8 contains any information that is inconsistent with the account holder's claim,
3. The Form W-8 lacks information necessary to establish entitlement to a reduced rate of withholding, if a reduced rate is claimed, or
4. You have information not contained on the form that is inconsistent with the claims made on the form.

Establishment of foreign status

You have reason to know that a Form W-8 BEN or Form W-8 EXP is unreliable or incorrect to establish a direct account holder's status as a foreign person if:

1. The Form W-8 has a permanent residence address in the United States,
2. The Form W-8 has a mailing address in the United States,
3. You have a residence or mailing address as part of your account information that is an address in the United States,
4. The person providing the certificate notifies you of a new residence or mailing address in the United States, or
5. If the Form W-8 is provided with respect to an offshore account, the account holder has standing instructions directing you to pay amounts from its account to an address or account maintained in the United States.

NOTE: Items (2) and (3) above do not apply if the U.S. mailing address is provided on a Form W-8 received before December 31, 2001. In addition, a Form W-8 provided by a nonresident alien student, trainee, teacher, researcher, Exchange Visitor, or Cultural Exchange Visitor in F-1, J-1, M-1, or Q-1 nonimmigrant status shall not be considered invalid solely because the Form W-8 shows an address in the United States, if the account holder can show that he is a nonresident alien.

You may, however, rely on a Form W-8 as establishing the account holder's foreign status if any of the following applies:

1. You receive the Form W-8 from an individual and:
   1. You possess or obtain documentary evidence (that does not contain a U.S. address) that was provided within the last three years, was valid when provided, supports the claim of foreign status, and the beneficial owner provides you with a reasonable explanation in writing supporting the account holder's foreign status, or
   2. If the account is maintained at your office outside the United States, you are required to report annually a payment to the account holder on a tax information statement filed with the tax authority of the country in which your office is located and that country has an income tax treaty in effect with the United States.
2. You receive the Form W-8 from an entity that is not a flow-through entity and:
   1. You have in your possession or obtain documentation that substantiates that the entity is organized or created under foreign law, or
   2. If the account is maintained at your office outside the United States, you are required to report annually a payment to the account holder on a tax information statement filed with the tax authority of the country in which your office is located and that country has an income tax treaty in effect with the United States.
3. You may treat an account holder that has provided standing instructions to make payments with respect to its offshore account to a U.S. account or U.S. address as a foreign person if the account holder provides a reasonable explanation in writing that supports the account holder's foreign status.

Claim of reduced rate of withholding under treaty

You have reason to know that a Form W-8 BEN provided by a direct account holder to claim a reduced rate of withholding under a treaty is unreliable or incorrect for purposes of establishing the account holder's residency in a treaty country if:

You may, however, rely on a Form W-8 BEN as establishing an account holder's claim of a reduced rate of withholding under a treaty if any of the following apply.

1. If the permanent residence address is not in the treaty country and:
   1. The account holder provides a reasonable explanation for the permanent residence address outside the treaty country, or
   2. You possess or obtain documentary evidence that establishes residency in a treaty country.
2. If the mailing address is not in the treaty country and:
   1. You possess or obtain additional documentation (that does not contain an address outside the treaty country) supporting the beneficial owner's claim of residence in the treaty country,
   2. You possess or obtain documentation that establishes that the beneficial owner is an entity organized in a treaty country,
   3. You know that the address outside the treaty country is a branch of a bank or insurance company that is a resident of the treaty country, or
   4. You obtain a written statement from the beneficial owner that reasonably establishes its entitlement to treaty benefits.
3. If you have instructions to pay amounts outside the treaty country, and the account holder gives you a reasonable explanation, in writing, establishing residence in the applicable treaty country.

Documentary evidence unreliable or incorrect

You have reason to know that documentary evidence provided by a direct account holder that is a foreign person is unreliable or incorrect if:

1. The documentary evidence does not reasonably establish the identity of the person presenting the documentary evidence,
2. The documentary evidence contains information that is inconsistent with the account holder's claim of a reduced rate of withholding, or
3. You have account information that is inconsistent with the account holder's claim of a reduced rate of withholding, or the documentary evidence lacks information necessary to establish a reduced rate of withholding. For example, the documentary evidence does not contain, or is not supplemented by, statements regarding the derivation of the income or compliance with limitations on benefits provisions in the case of an entity claiming treaty benefits.

Establishment of foreign status

You have reason to know that documentary evidence is unreliable or incorrect to establish a direct account holder's status as a foreign person if:

1. The only mailing or residence address on documentary evidence provided after December 31, 2000, is an address at a financial institution (unless the financial institution is the beneficial owner), an in-care-of address, or a P.O. Box,
2. You have a mailing or residence address for the account holder in the United States or if the account holder notifies you of a new address in the United States, or
3. The account holder has standing instructions directing you to pay amounts from the account to an address or account maintained in the United States.

You may, however, rely on documentary evidence as establishing an account holder's foreign status if any of the following apply:

1. If the mailing or residence address is in the United States, you receive the documentary evidence from an individual, and
   1. You possess or obtain additional documentary evidence (that does not contain a U.S. address) supporting the claim of foreign status and a reasonable explanation in writing supporting the account holder's foreign status,
   2. You possess or obtain a Form W-8 that contains a permanent residence address and mailing address outside the United States (or if a mailing address is inside the United States the account holder provides a reasonable explanation, in writing, supporting the account holder's foreign status, or the Form W-8 was received before December 31, 2001), or
   3. The account is maintained at your office outside the United States and you are required to report annually a payment to the account holder on a tax information statement filed with the tax authority of the country in which your office is located and that country has an income tax treaty in effect with the United States.
2. If the mailing or residence address is in the United States, you receive the documentary evidence from an entity (other than a flow-through entity) and:
   1. You possess or obtain documentation to substantiate that the entity is actually organized under the laws of a foreign country,
   2. You obtain a valid Form W-8 that contains a permanent residence address and mailing address outside the United States (or if a mailing address is inside the United States, the account holder provides additional documentary evidence sufficient to establish the account holder's foreign status, or the Form W-8 was received before December 31, 2001), or
   3. The account is maintained at an office outside the United States and you are required to report annually a payment to the account holder on a tax information statement filed with the tax authority of the country in which your office is located and that country has an income tax treaty in effect with the United States.
3. If you have instructions to pay amounts to an address or an account in the United States and the account holder provides you with a reasonable explanation, in writing, that supports the account holder's foreign status.

Claim of reduced rate of withholding under treaty unreliable or incorrect

You have reason to know that documentary evidence provided by a direct account holder to claim a reduced rate of withholding under a treaty is unreliable or incorrect for purposes of establishing the account holder's residency in a treaty country if:

1. You have a mailing or residence address for the account holder that is outside the applicable treaty country,
2. The only address that you have (whether in or outside the treaty country) is a P.O. box, an in-care-of address, or the address of a financial institution (that is not the beneficial owner of the income), or
3. The account holder has standing instructions for you to pay amounts from its account to an address or account not in the treaty country.

You may, however, rely on documentary evidence as establishing an account holder's claim of a reduced rate of withholding under a treaty if any of the following apply.

1. If the mailing or residence address is outside the treaty country and:
   1. You possess or obtain additional documentary evidence supporting the account holder's claim of residence in the treaty country (and the documentary evidence does not contain an address outside the treaty country, a P.O. Box, an in- care-of address, or the address of a financial institution),
   2. You possess or obtain documentary evidence that establishes that the account holder is an entity organized in a treaty country, or
   3. You obtain a valid Form W-8 BEN that contains a permanent residence address and a mailing address in the applicable treaty country.
2. If you have instructions to pay amounts outside the treaty country and the account holder gives you a reasonable explanation, in writing, establishing residence in the applicable treaty country.

Related

• Standards of Knowledge