Collection of customer documentation
- Index
- NRA and US Person Documentation
- Definition and documentation of US Person
- Definition and documentation of NRA
- Period of validity of the W8 and W9 documentation
NRA and US Person Documentation
The collection of documentation from its customers is the backbone of the entire QI regime. Non Resident Alien (NRA) customers must be correctly identified and documented with the W-8 module or alternative documentary evidence (e.g. Know Your Customer, KYC, rules). US customers must submit a W-9 form instead.
Only correctly documented QI customers are entitled to the reduced withholding tax.
W8 and W9. There are different types of W-8 modules, each of which is used to document a type of customer.
| Form Name | Recipient type |
| W-9 | US person |
| W-8BEN | NRA natural persons |
| W-8BEN-E | NRA legal persons |
| W-8IMY | NRA:
|
| W-8EXP | Other NRA customers requesting withholding tax exemption::
|
| W-8ECI | NRA customers requesting withholding tax exemption because the income received is relevant to the permanent establishment in the U.S. |
As an alternative to the W-8 forms, the QI may collect other documentary evidence allowed by the IRS. For direct NRA customers, IRS allows documentation via the KYC rules. As an example, the QI may accept the copy of the ID card provided by its customer if it is considered as valid proof for the purposes of the KYC of the country in which the QI is established.
Definition and documentation of US Person
The US person is defined in section 7701(a)(30) of the IRC and is defined as:
- a U.S. citizen or resident in the United States;
- a partnership incorporated in the United States;
- a corporation incorporated in the United States;
- a trust, if
- a United States court is able to exercise primary jurisdiction over the administration of the trust, and
- one or more US Persons have the authority to review all substantive decisions of the trust.
A US Person who has completed and signed form W-9 (https://www.irs.gov/pub/irs-pdf/fw9.pdf) is considered documented. Form W-9 must include the customer’s tax identification number, i.e. the customer’s U.S. Taxpayer Identification Number (TIN). In the absence of W9, or if TIN is missing, the QI shall apply the 24% withholding tax (i.e. the current rate for Backup Withholding) on both proceeds and sales revenues for US securities.
Definition and documentation of NRA
All customers not classified as US Persons are considered NRAs.
NRA customers must be identified by a special form W-8, which varies according to the type of customer. For direct customers, IRS permits documentation through the KYC rules.
| Client | Documentation |
| Natural Persons NRA |
|
| Transparent entities (FTE, NQI) | The documentation of the entity collecting the proceeds shall be:
The documentation of the partners/beneficiaries/customers is distinguished according to whether they are actual beneficiaries for QI purposes or not. Beneficial Owners:
NON Beneficial Owners:
|
| Legal persons NRA |
|
Period of validity of the W8 and W9 documentation
The period of validity of the documentation submitted by modules W-8 or W-9 depends for each module. The terms currently in force for each module are as follows.
| Form | Period of Validity |
| W-8IMY | As long as the information given does not change |
| W-9 | |
| W-8BEN | Until the third calendar year following the date of subscription and issue
|
| W-8BEN-E | |
| W-8EXP | |
| W-8ECI |