Section I – FATCA Self Certification Forms
The U.S. Foreign Account Tax Compliance Act (“FATCA”, also referred to as “Chapter 4”) requires Foreign Financial Institutions (FFIs) to identify the “FATCA” status of their new and exisiting customers. When the classification can not be done by the FFIs, FATCA requires the customers provide a “self- certification” by using the relevant US tax form.
Failure to document the applicable FATCA status when required may result in MFM Investment Ltd considering the customer as undocumented or ‘recalcitrant’ account holder and to subject the customer to 30% withholding tax on US Sourced withholdable payments.
B. Classification of US Persons
For purposes of FATCA classification, customers considered by the IRS as US Persons (All U.S. citizens, permanent legal residents or “green card” holders, and persons born in the U.S.) are required to complete IRS Form W-9 – “Request for Taxpayer Identification Number and Certification”.
For individuals, the Taxpayer Identification Number (“TIN”)is generally the individual’s social security number. MFM Investment Ltd ’s policy requires that all U.S. persons must provide their TIN by completing IRS Form W-9.
Link to the form: http://www.irs.gov/pub/irs-pdf/fw9.pdf
Link to the IRS instructions for this form: http://www.irs.gov/pub/irs-pdf/iw9.pdf
C. Classification of Non-US Persons
For purposes of FATCA/Chapter 4 classification, all non-US persons are required to complete the appropriate IRS Form W-8BEN as self-certification form depending on their situation.
Form W-8BEN-“Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (individuals)”, must be provided by a nonresident alien who is the beneficial owner of an amount subject to withholding.
Link to the form: http://www.irs.gov/pub/irs-pdf/fw8ben.pdf
Link to the IRS instructions for this form: http://www.irs.gov/pub/irs-pdf/iw8ben.pdf
D. Frequently Asked Questions (FAQ)
1. Who should provide a W-8BEN?
The Form W-8BEN should be provided by a non-US Person (see definition in Section I. B & C) that is the beneficial owner maintaining an account providing the same information provided in the account opening documents. Only one beneficial owner can appear on the Form.
2. What is a permanent address?
The permanent resident address is the address in the country where the individual is a resident for income tax purposes.
3. Should the country of citizenship match the country of permanent residence?
No, the country of citizenship does not need to match the country of permanent residence.
Your country of tax residence is the country in which you are subject to tax obligations. Normally an individual will be resident for tax purposes in only one country (the country in which you live.)
Some individuals are resident in more than one country. For example, if an individual spends significant amounts of time in two or more countries. Whether this will make you resident in that other country will depend on the local rules for determining tax residence.
Tax residence is different to citizenship. You can be tax resident in one country and be a citizen of another.
4. How does the mailing address differ from the permanent address?
Mailing address should only be filled out if different than the permanent address. If the mailing address includes a P.O. Box, in care of address, financial institutions or a US address, additional documentation may be required to validate the Form such as a valid explanation explaining such address.
5. Is a Foreign Tax ID number or Date of Birth required?
If the foreign individual’s country of tax residence has issued a foreign TIN, it should be entered. If not, the date of birth must be provided. For UK purposes this would be your National Insurance number.
6. Is a claim of treaty benefits required?
Although not mandatory, if the foreign individual is a resident of a tax treaty country, this section should be completed to obtain a reduction in withholding tax under the applicable treaty. In order to make a proper treaty claim, the country of residence must match the country included in this section.
7. Is a signature required?
The Form W-8BEN must be signed by an individual authorized to sign on behalf of the beneficial owner. The signer’s name must be printed and capacity must be provided if the Form is not signed by the beneficial owner. This signature must be an original hand signed signature.
8. Who should complete the Form W-9?
The Form W-9 should be completed by the US individual or US entity that is the beneficial owner maintaining the account providing the same information provided in the account opening documents. Only one beneficial owner can appear on the Form.
9. For the W-9 does the address need to be located in the United States?
The address provided can be either U.S. or foreign.
10. Is a taxpayer identification number required on the W-9?
A valid 9 digit U.S. social security number or TIN (individuals) must be provided, if applicable.
11. Is a signature required?
The Form W-9 must be signed by an individual authorized to sign on behalf of the beneficial owner and must attest to this capacity by checking a box. This signature must be an original hand signed signature.
D.2. Detailed Tax Form Instructions
Reference the link below for detailed IRS instructions for each tax form:
D.3. FATCA FAQs
Reference the link below for FATCA FAQ on the IRS website: