IRS Updates Form W-8 EXP for Withholding for Foreign Governments and Organizations

The IRS has released a final 2023 revision of Form W-8EXP, “Certificate of Foreign Government or Other Foreign Organization for United States Tax Withholding and Reporting,” and the related instructions with several updates from the last revision that was published more than five years ago. 

Foreign governments and certain other foreign organizations use Form W-8EXP to claim a reduced rate, or exemption, from tax withholding on payments of U.S. income. The revised instructions include more detailed background on the withholding regimes that can apply to payments to foreign entities and the withholding exemptions that can be claimed on Form W-8EXP.

The IRS has also updated the new instructions to account for new rules applicable to qualified foreign pension funds claiming a withholding exemption under Internal Revenue Code Section 1445. The IRS published the final regulations relating to qualified foreign pension funds in December 2022. The rules address gain or loss of a qualified foreign pension fund attributable to certain interests in U.S. real property and the requirements for certifying that a qualified foreign pension fund is not subject to withholding on certain dispositions of, and distributions with respect to, certain interests in U.S. real property. 

The new Form W-8EXP instructions also include updates with respect to line 13c relating to the supporting information required for an entity qualifying under Section 501(c)(3) to represent that it is not a foreign private foundation. The revisions relate to changes made by Revenue Procedure 2017-53.

Changes to the form itself include:

• A new checkbox in line 3 (type of entity) for a “Withholding qualified holder under section 1445,”
• New certifications for foreign governments in lines 10d and 10e, and
• New certifications for a withholding qualified holder in lines 15a and 15b.