Generally, you treat a payee as a flow-through entity if it provides you with a Form W-8IMY on which it claims such status. If you make a withholdable payment to a flow-through entity that is not one of the types described above, you must treat the partner, beneficiary, or owner (as applicable) of the flow-through entity as the payee for Chapter 4 purposes (similar to the determination of the payee for Chapter 3 purposes) (looking through partners, beneficiaries, and owners that are themselves flow-through entities that are not one of the types described above). An excepted NFFE that is not acting as an agent or intermediary with respect to the payment.An FFI that is not a participating FFI or deemed-compliant FFI, or restricted distributor (an entity that operates as a distributor that holds debt or equity interests in a restricted fund as a nominee and meets the requirements described in Regulations section 1.1471-5(f)(4)) receiving the payment on behalf of its owners (in such a case, the entity is a nonparticipating FFI subject to withholding under Chapter 4) or.trade or business) if the flow-through entity is: For purposes of Chapter 4, however, a foreign entity that is a flow-through entity is a payee with respect to a payment (other than income effectively connected with the conduct of a U.S. tax purposes, but the payee is claiming treaty benefits, see Fiscally transparent entities claiming treaty benefits, below.Ĭhapter 4 payees. If the Chapter 3 payee is a disregarded entity or flow-through entity for U.S. A foreign simple or foreign grantor trust (other than a withholding foreign trust)
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