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#1935993 - 06/26/14 11:55 PM W-8BEN Foreign Customer Interest Withholding
Elaine Offline
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Joined: Jun 2014
Posts: 2
If a new foreign (non-U.S. resident) customer fails to provide a valid W-8BEN form to certify their foreign status, the Bank must treat that person as an U.S. person and withhold 28% of any interest payment made to that individual. Is that correct?

What happen if the customer's W-8BEN has expired (3 years from the tome account opened) and the bank is not able to obtain a new W-8BEN, should the Bank still consider the customer as a foreign individual, or should the bank now treats the customer as a missing TIN U.S. person?

If the Bank still consider the customer as a Non-Resident Alien (NRA), then should the bank be required to withhold any deposit interest payment paid to the account? According to IRS pub 515, it appears deposit interest to NRA is exempt for withholding.

Thank you.

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#1936205 - 06/27/14 04:52 PM Re: W-8BEN Foreign Customer Interest Withholding Elaine
NotDoneYet Offline
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NotDoneYet
Joined: Jul 2010
Posts: 482
PA
I would not treat the NRA as a missing TIN US person because the W-8BEN has expired. A signed W-9 would change the status.
We have done withholding because a valid (unexpired) form isn't on file, and that is what gives them the exemption.

I don't know what happened. I gave my thoughts on this before 9:00 and when I checked back it wasn't here.

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