Publication 515 - Introductory Material
Qualified intermediaries. A branch of a financial institution may not act as a qualified intermediary in a country that does not have approved know-your-customer
Qualified intermediary under Foreign Intermediaries.
U.S. real property interest. . The rules related to distributions of the gain from the disposition of a U.S. real property interest by a mutual fund or
investment company (RIC) have been modified. See U.S. Real Property Interest, for more information.
Interest-related dividends and short-term capital gain dividends received from mutual funds. For tax years beginning after 2007, the exemption from withholding on certain interest-related dividends and short-term capital
gain dividends paid
by a mutual fund or other regulated investment company will no longer apply.
Portfolio interest paid to 10% owners. New rules establish when the 10% ownership test applies to interest distributions that may otherwise qualify as portfolio
interest. These rules can
be found in section 1.871-14(g) of the regulations.
Failure to withhold — interest and penalties. Withholding agents are not liable for interest and penalties for failure to withhold tax if the liability is satisfied by
the payee or other
New treaty and protocols. The United States has exchanged instruments of ratification for a new income tax treaty with Belgium and new protocols with
Denmark, Finland, and
Belgium. The provisions relating to withholding tax at source are effective for amounts paid or credited on or after February 1, 2008.
For other taxes, the treaty is effective for tax periods beginning on or after January 1, 2008. A person entitled to benefits
under the previous
treaty can elect to have that treaty apply in its entirety for a twelve-month period following the date the new treaty would
Denmark. The provisions relating to withholding tax at source are effective for amounts paid or credited on or after February 1, 2008.
For other taxes, the protocol is effective for tax periods beginning on or after January 1, 2008.
Finland. The provisions relating to withholding tax at source are effective for amounts paid or credited on or after February 1, 2008.
However, the provisions for dividends covered by footnotes oo and ss in Table 1 (at the end of this publication), are effective
January 1, 2007. For other taxes, the protocol is effective for tax years beginning on or after January 1, 2008.
Germany. The provisions relating to withholding tax at source are effective for amounts paid or credited on or after January 1, 2007.
For other taxes, the treaty is effective for tax years beginning on or after January 1, 2008. A person entitled to benefits
under the treaty before
modification by this protocol can elect to have the unmodified treaty apply in its entirety for a twelve-month period following
the date the protocol
would otherwise apply.
Magnetic media. . Beginning with tax year 2008, processing year 2009, the IRS will no longer accept tape cartridges. You will not be able to
use magnetic media to
file Form 1042-S.
Note. This publication serves as the Small Entity Compliance Guide required by section 212 of the Small Business Regulatory Enforcement
Fairness Act of
1996, P.L. 104-121.
Form W-8. There are four forms in the W-8 series. The form to use depends on the type of certification being made. As used in this publication,
“Form W-8” refers to the appropriate document. For more information, see Documentation, later.
Electronic deposit rules. You must use the Electronic Federal Tax Payment System (EFTPS) to make electronic deposits of all depository tax liabilities
you incur after 2007,
if you meet either of the following conditions.
You had to make electronic deposits in 2007.
You deposited more than $200,000 in federal depository taxes in 2006.
If you do not meet these conditions, electronic deposits are voluntary.
For more information about depositing electronically, see Publication 966, The Secure Way to Pay Your Federal Taxes.
Filing electronically. If you file Form 1042-S electronically, you will use the Filing Information Returns Electronically (FIRE) system. You get
to the system through the
For files submitted on the FIRE system, it is the responsibility of the filer to verify the results of the transmission within
5 business days. The
IRS will not mail error reports for files that are bad.
IRS taxpayer identification numbers for aliens. The IRS will issue an individual taxpayer identification number (ITIN) to an alien who does not have and is not eligible to
get a social security
An ITIN is for tax use only. It does not entitle an alien to social security benefits or change his or her employment or immigration
For more information on ITINs, see U.S. Taxpayer Identification Numbers, later.
Real estate mortgage investment conduits (REMIC). Excess inclusion income is treated as income from sources in the United States. The date an excess inclusion allocated to
a foreign person by
certain pass-through entities is subject to withholding is, generally, the close of the entity's tax year. An excess inclusion
is not eligible for any
reduction in withholding tax (by treaty or otherwise). See REMIC excess inclusions.
Partnership withholding on effectively connected income (ECI). A partnership must withhold tax on ECI allocated to a foreign partner. However, a publicly traded partnership (PTP) cannot
elect to withhold tax
based on ECI allocable to its foreign partners. The PTP must withhold on the distribution of that income to its foreign partners.
For more information, see Publicly Traded Partnerships under Partnership Withholding on Effectively Connected Income.
Dematerialized book-entry systems. . Under these systems, bonds are required to be represented only by book entries. Generally, these bonds are considered to
be in registered form.
See Reduced Rates of Withholding on Interest.
Photographs of missing children. The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of
selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children
home by looking at the
photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.
This publication is for withholding agents who pay income to foreign persons, including nonresident aliens, foreign corporations,
partnerships, foreign trusts, foreign estates, foreign governments, and international organizations. Specifically, it describes
responsible for withholding (withholding agents), the types of income subject to withholding, and the information return and
tax return filing
obligations of withholding agents. In addition to discussing the rules that apply generally to payments of U.S. source income
to foreign persons, it
also contains sections on the withholding that applies to the disposition of U.S. real property interests and the withholding
by partnerships on
income effectively connected with the active conduct of a U.S. trade or business.
Comments and suggestions.
We welcome your comments about this publication and your suggestions for future editions.
You can write to us at the following address:
Internal Revenue Service
Individual Forms and Publications Branch
1111 Constitution Ave. NW, IR-6526
Washington, DC 20224
We respond to many letters by telephone. Therefore, it would be helpful if you would include your daytime phone number,
including the area code, in
You can email us at
. (The asterisk must be included in the
address.) Please put “Publications Comment
” on the subject line. Although we cannot respond individually to each email, we do appreciate your
feedback and will consider your comments as we revise our tax products.
Ordering forms and publications.
to download forms and publications, call 1-800-829-3676, or write to the address below and receive a response
within 10 days after your request is received.
National Distribution Center
P.O. Box 8903
Bloomington, IL 61702-8903
If you have a tax question, check the information available on
or call 1-800-829-1040. We cannot answer tax questions sent to
either of the above addresses.
Useful Items - You may want to see:
(Circular E), Employer's Tax Guide
Employer's Supplemental Tax Guide
Employer's Tax Guide to Fringe Benefits
(Circular A), Agricultural Employer's Tax Guide
U.S. Tax Guide for Aliens
U.S. Tax Treaties
Form (and Instructions)
Application for Employer Identification Number
Wage and Tax Statement
Employee's Withholding Allowance Certificate
Withholding Certificate for Pension or Annuity Payments
Application for IRS Individual Taxpayer Identification Number
Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding
Certificate of Foreign Person's Claim That Income Is Effectively Connected With the Conduct of a Trade or Business in the
Certificate of Foreign Government or Other Foreign Organization for United States Withholding
Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or Certain U.S. Branches for United States Tax Withholding
Employer's Quarterly Federal Tax Return
Annual Withholding Tax Return for U.S. Source Income of Foreign Persons
Foreign Person's U.S. Source Income Subject to Withholding
Annual Summary and Transmittal of Forms 1042-S
See How To Get Tax Help, at the end of this publication for information about getting publications and forms.