I want to confirm if the bank reports all foreign customers who earn interest on a 1042-S or just Canadians. I read on BOL that 1042-S is only required for Canadians but it's my understanding that you report any interest paid to Foreign customers on the form. It maybe that you report all Canadians on a 1042-S regardless of interest earned but only other Foreign customers if interest is earned. I am more familiar with 1099's and you only report if interest is earned. Below is what I read on BOL.

[u]We have a few foreign customers and they have provided us with W-8BENs which are maintained on file. In the past, I understood that we had to complete a 1042-S if the W-8BEN indicated the NRA was a Canadian resident. Has the rule changed to include all foreign customers?

Answer: 1042S reporting is only required for Canadian citizens. You should be able to identify them by reviewing your W-8BENs and noting those showing Canada as the person's permanent address.

If you are paying interest on bank deposits owned by non U.S. persons, then you are only required to report on payments to Canadian citizens. Those payments are reported on Form 1042S. (Accounts owned by other non U.S. persons are not subject to any type of reporting if they are supported by a current W8-BEN for each owner on the account.)

Other types of payments to non U.S. persons are subject to reporting under treaty arrangements that are considerably more complex.