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We need to fill out a W8-ben E, we are 51% owned by a

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We need to fill out a W8-ben E

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We are 51% owned by a Brazilian company. we are a C-corp. we need help filling out this form

Submitted: 8 months ago.Category: Tax
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9/15/2017
Tax Professional: taxmanrog, Certified Public Accountant (CPA) replied 8 months ago
taxmanrog
taxmanrog, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 1,067
Experience: Licensed CPA, MA, MST with 31 years' experience. Teach Accounting and Tax courses at Masters level.
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Tax Professional: taxmanrog, Certified Public Accountant (CPA) replied 8 months ago

This is an area that I specialize in and have worked in for over 30 years.

If you are a United States corporation, why are you filling out a W-8BEN E? This Form is a Certificate of foreign status of a beneficial owner for US tax withholding and reporting purposes, to be filled out by foreign companies doing business with US companies. IF you are a US company, even if you have foreign ownership, you DO NOT complete this form. If you look at the FIRST line of the form, just below the title, it says "Do NOT use this form for:" and the first item is "U.S. entity or U.S. Citizen or resident." You are a U.S. corporation, which is a U.S. entity. Therefore you do not use this form. It says to use a W-9 instead.

Who is asking for the W-8BEN E? There are many people who ask for this form and have no idea what it is to be used for. It is for FATCA reporting by foreign companies to US companies that they do business with. It is not to be used by U.S. companies or individuals. Yet banks and other companies ask for them all the time, and companies who are supposed to complete them often refuse to.

I just had a Canadian company that was doing business with a US company. The Form was clearly required, yet the bookkeeper at the Canadian company insisted that since they were Canadian they did not have to file any US tax forms. I pointed out to her the section where if they did not comply they would be faced with a 30% withholding requirement. They complied.

In your case, you are a US company, so you cannot give a certificate of status as being a foreign entity.

The fact that you are 51% owned by a foreign company means that you are also required to file a Form 5472. I don't know if you were aware of that. There will also be withholding on many payments made to the foreign shareholders. These sometimes can be reduced by treaty, but Brazil has no tax treaties with the United States, so most of the items that need withholding are withheld at 30%.

I hope this answers your questions. If you have any more, please feel free to ask and I will be happy to answer. I will be checking this site in the morning, but I have meetings most of the day. I will be back on tomorrow evening.

Thanks! Have a great weekend!

Roger

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Tax Professional: taxmanrog, Certified Public Accountant (CPA) replied 8 months ago

Do you have any more questions? I have not heard back from you.

If you do not have any further questions, please be suer that you rate me, as this is how the question is closed.

Thanks! Have a great weekend!

Roger

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