Substitute W-8 Forms
A financial institution may use an in-house-created substitute for a W-8 form. This thread is for questions, answers and discussion of these forms.
General banking issues and other banking issue sub-thread links are at Banking Issues.
I just received a ‘ substitute’ W8Ben from a US bank in which I retained a small deposit account after leaving the US and giving up US citizenship some years ago.
The form asked me to state how many days I had been present in the US over the past 3 years and also defined the ‘substantial presence test’ with a statement that:
‘A person is considered a US resident for tax purposes if they are present in the US for a minimum of 31 days in the current year and a total of 183 days over the 3 year period .’
I also had to give my country tax id number, dob, citizenship, and copy of my passport.
This seems to me to have nothing to do with reporting the small amount of interest ( less than $10.00 ) that I receive to my resident country, but more to do with searching for people who could be deemed US residents for tax purposes for the IRS.
Beware those who spend any extended time in the USA.
It’s to confirm you’re entitled to claim the treaty rate, presumably. (Not a US citizen, and not US-resident under the treaty tie-breaker rules)
@PH
Yes, but why not just a simple W8 BEN irs form. Why is a bank entitled to demand to know how may days one has spent in the country under the pain of perjury?
An IRS w8-BEN does not ask that.
Interest is non existent on a simple bank deposit account, so there is no interest on which to apply the treaty rate anyway!
A substitute W-8BEN is one drawn up by the bank according to the criteria stipulated by the IRS, as per the IGA. The bank is required to keep it on file so they can prove they’re FATCA-compliant.
Here you are:
https://www.irs.gov/instructions/iw8
A Substitute W8 BEN is usually used by non USbanks who do not wish ask their non US persons to sign a US generated form but who have to comply with FATCA requirements, which are to only establish tax residence and possible US personhood.
There is no need for a US bank to use their own ‘substitute’ form which demands more intrusive questions not required by the IRS W8BEN.
I don’t see why you think it’s unreasonably intrusive for a US bank to ask an accountholder questions which are relevant to the accountholder’s eligibility to claim treaty benefits. But if it’s a concern to you, why not raise it with the bank?
@PH
On a simple non interest earning account that triggers no treaty benefits asking substantial present dates is unnecessary apart from wasting my time looking up passport stamps .
The age of sweeping data collection concerns me and should concern others.
PS @PH
“Why not raise it with the bank”
Banks now have no interest in serving the individual.
I paid $2350 to be able to confirm truthfully to banks that I’m not resident in the US and am eligible to claim treaty benefits.
It’s in my interest for the bank to know the answer to these questions. There’s no risk to me in answering the questions.
Before I renounced, banks wanted me to confirm that I was resident in America (though I wasn’t).
Now that’s what I call objectionable.
@PH
Of course that’s objectionable, because of FATCA and US CBT, banks around the world now serve the IRS, not their customers. I can understand that foreign banks need to protect themselves but this is overreach by a US bank for no reason. Where does one draw the line?
I was only in the US for a period of 7 days total in the 3 year period, but I just wanted people who travel to the US for extended periods to be aware of the substantial presence test coming from banks as well as the INS. Its a complex calculation of a 3 yr rolling average.
“overreach by a US bank for no reason.”
It protects both the bank and the accountholder from the consequences of FATCA.
I agree, anyone who travels extensively in America and holds accounts in America, while residing and claiming NRA treaty benefits in a different country, needs to be aware of the risk of exceeding the limits.
Is my signature under the penalty of perjury enough for them for a non interest account ?!
They are NOT required to ask about my US travel. How much further can they go, perhaps ask me to send photocopies of all the pages of my passport? This is overreach. Its the little people who suffer this time wasting while the real money launderers get away with it.
I will say no more, it just makes me angry.
I strongly disagree. It’s not overreach for a US bank to require answers to relevant questions as a condition of providing a cross-border account.
It would be overreach for a bank to require answers to irrelevant questions as a condition of providing a non-cross-border account.
Residence-country accounts for non-US-resident individuals with a US birthplace are presumed by the US (and, post-FATCA, by the residence country) to be cross-border accounts even if the accountholder has never had any US-source income and never even been to the US. That’s the problem.
A person who’s not a US citizen and is not US-resident is able to deal with the problem by certifying their status. The certification is a solution, not a problem. It’s not risky for a non-US-resident non-US-citizen to certify their status. Just be careful not to become US-tax-residence — either by acquiring a Green Card, or inadvertently, by spending too much time in America.
@PH
It seems you are ready to answer any question a bank asks you even those questions are not required by law or that countries tax authority.There is a thin line that protects our privacy and our rights. I prefer to defend mine.
We have to agree to disagree.
@PH
I do not have a US birthplace, I was naturalized, they have my cln, they have my non US address, they have my signature under penalty of perjury, I earn no interest to be reported. I am not legally required to provide anything else.
I don’t see any data protection issue when it comes to certifying to a bank that I’m eligible for an account and am not reportable under CRS or FATCA. I paid good money to prevent my privacy from being infringed. It would be a complete waste of that money if I refused to certify my hard-bought non-reportable status.
“I am not legally required to provide anything else.”
No. Presumably if you refuse to answer the question, the bank will just assume you’re US-tax-resident and not entitled to claim the treaty rate.
You CAN certify up to the limit that is required by FATCA, you do not owe the bank your travel history or life story. Data is precious, it is stolen, it is sold, you have no idea how it will be used.
The fact that I’m not US-tax-resident isn’t a precious secret I need to protect.
As long as it’s a secret, it’s useless. Revealed, it acts as an antidote to my US birthplace, and allows me to hold a bank account without being reported to the IRS.
I am not claiming a treaty rate. There is no tax due by any country on zero interest and any interest under $10,00 is not reportable either to the IRS (on a 1099-int. ) and also not reportable on 1042-S to my resident country if under $10.00 interest.
I fill in a regular W8-Ben which has been acceptable for the last 7 yrs. we will see what happens.
“All paths lead to renounciation”
Which leads to the W-8BEN (or similar form) 🙂
“Which leads to the W-8BEN (or similar form).”
Not if you answer “no” if your bank asks “the question”. I left the US a half a century ago because of their b/s so I’m in absolutely no mood to put up with it at this point in time. I feel so strongly about this that I’d switch banks over the issue but so far it hasn’t come to that. The Canadian banks seem almost relieved when you answer “no”, accept your answer without question, and immediately move on to the real business.
I understand that its not quite so simple elsewhere in the world.
@ maz57
In the past year I was asked by a bank clerk, “Do you pay taxes to any other country?” No is such an easy answer. I like easy. No was my one word response.
Indeed. If you’d rather do without the account than self-certify, there’s no need to self-certify.
‘In the past year I was asked by a bank clerk, “Do you pay taxes to any other country?” ‘
When UK banks ask that question it’s because of CRS. Yes or no is indeed all the accountholder needs to say.