We have NRAs at our institution that have completed W-8BEN forms.

1. Are these customers only reportable on a 1042-S if they only have interest on their account?
2. If they have a W-8 BEN completed that has not expired do we withhold and at what tax rate if we do?
3. What if we have a W-8 BEN E completed for a business what do we need to do?

Does anyone have a procedure or flowchart what needs to be done. This would be very helpful as I find the IRS instructions to be not easy to follow.

Thank you in advance!

1. If it's not an interest bearing account, there is nothing to report on a 1042S and no need for any certification of any type.
2. If the W8-BEN is current, reporting is required for most countries, but withholding is not.
3. Not enough information is offered to answer the question, but you need to make certain that this is the appropriate form for your customer; i.e. it is not a U.S. entity. Consider whether your bank should be offering interest bearing accounts to foreign entities if it does not understand how to handle their income tax ramifications.

1. So if an personal customer has an interest bearing account and is a NRA with a W-8 BEN completed, we are not required to withhold and 1042 needs to be filed correct?

2. What if there is a entity(business or trust) that contains NRA as the owners with W8-BEN and W8-BENE completed on a interest bearing account. Would it be the same 1042 needs to be filed and with no withholding applied?

3. How is chapter 4 how applicable to a U.S. Financial Institution pertaining to 1042 filing and withholding?


Thanks for your help in advance!

Anyone?

You really need to sit down with a good tax accountant for detailed explanations.

1. Appears correct - but not just a completed from, but one that has not expired.

2. Not sure what beneficial ownership has to do with it, unless you are talking about a entity not formed in the US.

3. Again, if you are going to be engaging in this sort of business, you need the proper expertise on board from the get-go.