The box should be used to certify its status. Part I, Line 12: New section 1446(f) checkbox for dealers in securities who are transferring an interest in a PTP and claiming an exemption from withholding under section 1446(f).Part I, Lines 8a and 8b: The Foreign Tax Identification Number (“FTIN”) line has been split into two lines to allow taxpayers to certify when a FTIN is not legally required.Part I, Line 4: The Type of Entity “government” has been split into two boxes, one for integral parts of foreign governments and one for controlled entities of foreign governments.Those drafts include, but are not limited to, a number of changes related to the new section 1446(f) regulations. Over the past weeks, the IRS has issued draft versions for its W-8IMY, W-8ECI, W-8BEN, W-8BEN-E Forms and related instructions. However, the wait continues for the rider to the QI Agreement (with respect to 1446(f)), updated Form 1042-S, and clarification on nominee reporting obligations for QIs.ĭraft Forms W8-IMY, W-8ECI, W-8BEN, W8BEN-E and related instructionsĪs previously mentioned, following the release of the Final Regulations under IRC section 1446, several updates are necessary in terms of documentation and guidance, including an updated QI Agreement.
#W8 IMY INSTRUCTIONS UPDATE#
The IRS also intends to update the QI Agreement to include section 1446(f). This notice is welcome news to impacted taxpayers and the industry as a whole, as the original effective date was only four months away. However, the IRS released end of August an advance version of Notice 2021-51 announcing that the Treasury and IRS intend to amend the regulations under sections 1446(a) and 1446(f) to defer the applicability date to January 1 st, 2023. With an initial implementation date of January 1, 2022, QIs had less than 5 months to prepare.
The withholding agent can be the transferee (for non-PTP interest or PTP interest without a broker), the broker (for PTP interest), or a Qualified Intermediary (“QI”). Two different rules apply depending on whether the partnership is publicly traded (“PTP”) or not (“non-PTP”). Section 1446(f) provides withholding and reporting rules applicable to the transfer of partnership interests if a portion of the gain must be treated as effectively connected gain, unless an exception applies.
#W8 IMY INSTRUCTIONS CODE#
On October 8, 2020, the Department of Treasury (“Treasury”) and the Internal Revenue Service (“IRS”) released final regulations regarding withholding and reporting obligations with respect to dispositions of certain partnership interests under Internal Revenue Code (“IRC”) section 1446 and related sections of the code.
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