Future Developments

Future Developments

Publication 515

Withholding of

Tax on

Nonresident

Aliens and

Foreign

Entities

For use in

2026

For the latest information about developments related to

Pub. 515, such as legislation enacted after it was

published, go to IRS.gov/Pub515.

What’s New

Information Returns Intake System (IRIS). The IRS

has developed IRIS, an online portal e-filing information

returns that will replace the Filing Information Returns

Electronically (FIRE) system once it is retired. FIRE is set

to retire for tax year 2026 and will not be available for submissions for filing season 2027 (forms due in 2027). IRIS

will be available beginning January 1, 2026, and must be

used to e-file 2026 Forms 1042-S (due March 15, 2027).

Either IRIS or FIRE may be used to e-file 2025 Forms

1042-S (due March 15, 2026). For more information about

IRIS, see Pub. 5717, IRIS Taxpayer Portal User Guide, or

go to IRS.gov/IRIS.

Forms 1042-S for prior tax years, as well as submissions by foreign filers, must continue to be electronically

filed using the FIRE system until it is retired.

IRIS will be the only intake system for information returns currently received through FIRE. For more information on e-filing with IRIS, go to IRS.gov/InfoReturns.

Direct deposit and electronic payments. If you have

access to U.S. banking services or electronic payment

systems, you are now able to request your tax refund electronically deposited for free into your financial account.

Also, the IRS added another option for withholding agents

to make federal tax deposits and make balance due payments using IRS Direct Pay. Go to IRS.gov/Payments to

see all your payment options.

Reminders

Get forms and other information faster and easier at:

• IRS.gov (English)

• IRS.gov/Korean (한국어)

• IRS.gov/Spanish (Español) • IRS.gov/Russian (Pусский)

• IRS.gov/Chinese (中文)

• IRS.gov/Vietnamese (Tiếng Việt)

Mar 10, 2026

Partial suspension of income tax convention with

USSR as it relates to Belarus. On December 17, 2024,

the United States provided formal notice to the Republic of

Belarus of the partial suspension of its tax treaty with the

USSR as it relates to Belarus. The United States has suspended the operation of paragraph 1, subparagraph (g),

of Article 3 of the Convention. The rest of the treaty articles will remain in place. The suspension went into effect

December 17, 2024, and will continue until December 31,

2026, or earlier if mutually determined by the two governments.

Withholding agents may not accept treaty claims for tax

withholding on interest payments on credits, loans, and

other forms of indebtedness connected with the financing

of trade made to residents of Belarus on or after December 17, 2024.

Partial suspension of income tax convention with

Russia. On June 17, 2024, the United States provided

formal notice to the Russian Federation of the partial

suspension of its treaty with Russia. The United States

Publication 515 (2026) Catalog Number 15019L

Department of the Treasury Internal Revenue Service www.irs.gov

has suspended the operation of paragraph 4 of Article 1,

Articles 5 through 21, and Article 23 of the Convention, as

well as the Protocol. The suspension went into effect both

for taxes withheld at source and in respect of other taxes

on August 16, 2024, and will continue until otherwise decided by the two governments.

Beginning on or after August 16, 2024, withholding

agents are required to withhold at the statutory 30% withholding tax rate on payments of U.S. source income made

to recipients who may have previously qualified for treaty

benefits under the U.S.–Russia income tax treaty.

Termination of 1979 tax convention with Hungary. On

July 15, 2022, the U.S. Treasury Department announced

that Hungary was notified on July 8, 2022, that the United

States would terminate its tax treaty with Hungary. In accordance with the treaty’s provisions on termination, termination of the treaty is effective on January 8, 2023. With

respect to taxes withheld at source, the treaty ceases to

have effect on January 1, 2024. Therefore, as of January

1, 2024, withholding agents are required to withhold at the

statutory 30% withholding rate on payments of U.S.

source income made to recipients who may have previously qualified for treaty benefits under the U.S.–Hungary

income tax treaty. In respect of other taxes, the treaty

ceases to have effect with respect to tax periods beginning on or after January 1, 2024.

E-filing returns. The Taxpayer First Act of 2019 authorized the Department of the Treasury and the IRS to issue

regulations that reduce the 250-return e-file threshold. T.D.

9972, published February 23, 2023, lowered the e-file

threshold to 10 (calculated by aggregating all information

returns), effective for information returns required to be

filed on or after January 1, 2024. Go to IRS.gov/InfoReturn

for e-file options.

These final regulations also include requirements for

withholding agents to e-file Form 1042, Annual Withholding Tax Returns for U.S. Source Income of Foreign Persons, effective for Form 1042 returns required to be filed

on or after January 1, 2024. For more information, see the

Instructions for Form 1042.

Photographs of missing children. The IRS is a proud

partner with the National Center for Missing & Exploited

Children® (NCMEC). Photographs of missing children 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.

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 (USRPIs) 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 suggestions for future

editions.

You can send us comments through IRS.gov/

FormComments. Or, you can write to the Internal Revenue

Service, Tax Forms and Publications, 1111 Constitution

Ave. NW, IR-6526, Washington, DC 20224.

Although we can’t respond individually to each comment received, we do appreciate your feedback and will

consider your comments and suggestions as we revise

our tax forms, instructions, and publications. Don’t send

tax questions, tax returns, or payments to the above address.

Getting answers to your tax questions. If you have

a tax question not answered by this publication or the How

To Get Tax Help section at the end of this publication, go

to the IRS Interactive Tax Assistant page at IRS.gov/

Help/ITA where you can find topics by using the search

feature or viewing the categories listed.

Getting tax forms, instructions, and publications.

Go to IRS.gov/Forms to download current and prior-year

forms, instructions, and publications.

Ordering tax forms, instructions, and publications.

Go to IRS.gov/OrderForms to order current forms, instructions, and publications; call 800-829-3676 to order

prior-year forms and instructions. The IRS will process

your order for forms and publications as soon as possible.

Don’t resubmit requests you’ve already sent us. You can

get forms and publications faster online.

Useful Items

You may want to see:

Publication

15

15

(Circular E), Employer’s Tax Guide

15-A Employer’s Supplemental Tax Guide

15-A

15-B Employer’s Tax Guide to Fringe Benefits

15-B

15-T Federal Income Tax Withholding Methods

15-T

505 Tax Withholding and Estimated Tax

505

Introduction

519 U.S. Tax Guide for Aliens

This publication is for withholding agents who pay income

to foreign persons, including nonresident aliens, foreign

corporations, foreign partnerships, foreign trusts, foreign

estates, foreign governments, and international organizations. Specifically, it describes the persons 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

1179 General Rules and Specifications For

Substitute Forms 1096, 1098, 1099, 5498, and

Certain Other Information Returns

2

519

901 U.S. Tax Treaties

901

1179

5124 FATCA XML User Guide

5124

Form (and Instructions)

SS-4 Application for Employer Identification Number

SS-4

Publication 515 (2026)

W-2 Wage and Tax Statement

W-2

W-4 Employee’s Withholding Certificate

W-4

W-4P Withholding Certificate for Periodic Pension or

Annuity Payments

8966 FATCA Report

8966

See How To Get Tax Help later in this publication for information about getting publications and forms.

W-4P

W-7 Application for IRS Individual Taxpayer

Identification Number

Withholding of Tax

W-8BEN Certificate of Foreign Status of Beneficial

Owner for United States Tax Withholding and

Reporting (Individuals)

In most cases, a foreign person is subject to U.S. tax on its

U.S. source income. Most types of U.S. source income received by a foreign person are subject to U.S. tax of 30%.

A reduced rate, including exemption, may apply if there is

a tax treaty between the foreign person’s country of residence and the United States. The tax is generally withheld

(chapter 3 withholding) from the payment made to the foreign person.

W-7

W-8BEN

W-8BEN-E Certificate of Status of Beneficial Owner

for United States Tax Withholding and

Reporting (Entities)

W-8BEN-E

W-8ECI Certificate of Foreign Person’s Claim That

Income Is Effectively Connected With the

Conduct of a Trade or Business in the United

States

W-8ECI

W-8EXP Certificate of Foreign Government or Other

Foreign Organization for United States Tax

Withholding and Reporting

W-8EXP

W-8IMY Certificate of Foreign Intermediary, Foreign

Flow-Through Entity, or Certain U.S. Branches

for United States Tax Withholding and

Reporting

W-8IMY

W-8 Inst. Instructions for the Requester of Forms

W-8BEN, W-8BEN-E, W-8ECI, W-8EXP, and

W-8IMY

W-8 Inst.

W-9 Request for Taxpayer Identification Number and

Certification

W-9

W-9 Inst. Instructions for the Requester of Form W-9

W-9 Inst.

941 Employer’s QUARTERLY Federal Tax Return

941

945 Annual Return of Withheld Federal Income Tax

945

1042 Annual Withholding Tax Return for U.S. Source

Income of Foreign Persons

1042

1042-S Foreign Person’s U.S. Source Income

Subject to Withholding

1042-S

1042-T Annual Summary and Transmittal of Forms

1042-S

1042-T

13930 Central Withholding Agreement Application

13930

8233 Exemption From Withholding on

Compensation for Independent (and Certain

Dependent) Personal Services of a Nonresident

Alien Individual

The term “chapter 3 withholding” is used in this publication descriptively to refer to withholding required under

sections 1441, 1442, and 1443. In most cases, chapter 3

withholding describes the withholding regime that requires

withholding on a payment of U.S. source income. Payments to foreign persons, including nonresident alien individuals, foreign entities, and governments, may be subject

to chapter 3 withholding.

Withholding may also be required on a payment to the

extent required under chapter 4. “Chapter 4” refers to

chapter 4 of Subtitle A (sections 1471 through 1474). See

Chapter 4 Withholding Requirements, later.

Caution: Chapter 3 withholding, when referenced in (and

not provided otherwise) in this publication, does not include withholding under section 1445 (see U.S. Real

Property Interest, later) or under section 1446 (see Partnership Withholding on Effectively Connected Taxable Income (ECTI) and Section 1446(f) Withholding, later).

A withholding agent (defined next) is the person responsible for withholding on payments made to a foreign

person. However, a withholding agent that can reliably associate the payment with valid documentation (discussed

later) from a U.S. person is not required to withhold. In addition, a withholding agent may apply a reduced rate of

withholding (including an exemption from withholding) if it

can reliably associate the payment with documentation

from a beneficial owner that is a foreign person entitled to

a reduced rate of withholding.

8233

8288 U.S. Withholding Tax Return for Certain

Dispositions by Foreign Persons

If an amount subject to chapter 3 withholding is also a

withholdable payment and chapter 4 withholding is applied to the payment, no withholding is required under

chapter 3. See Chapter 4 Withholding Requirements,

later.

8288-A Statement of Withholding on Certain

Dispositions by Foreign Persons

Withholding Agent

8288-B Application for Withholding Certificate for

Dispositions by Foreign Persons of U.S. Real

Property Interests

Chapter 3 Withholding Requirements

8288

8288-A

8288-B

8288-C Statement of Withholding Under Section

1446(f)(4) on Disposition by Foreign Persons of

Partnership Interests

8288-C

Publication 515 (2026)

You are a withholding agent if you are a U.S. or foreign

person, in whatever capacity acting, that has control, receipt, custody, disposal, or payment of an amount subject

to chapter 3 withholding. A withholding agent may be an

3

individual, corporation, partnership, trust, association,

nominee (under section 1446), or any other entity, including any foreign intermediary, foreign partnership, or U.S.

branch of certain foreign banks and insurance companies.

You may be a withholding agent even if there is no requirement to withhold from a payment or even if another person

has withheld the required amount from the payment.

Although several persons may be withholding agents

for a single payment, the full tax is required to be withheld

only once. In most cases, the U.S. person who pays an

amount subject to chapter 3 withholding is the person responsible for withholding. However, other persons may be

required to withhold. For example, a payment made by a

flow-through entity or nonqualified intermediary (NQI) that

knows, or has reason to know, that the full amount of

chapter 3 withholding was not done by the person from

which it receives a payment is required to do the appropriate withholding since it also falls within the definition of a

withholding agent. In addition, withholding must be done

by any qualified intermediary (QI), withholding foreign

partnership (WP), or withholding foreign trust (WT) in accordance with the terms of its withholding agreement, discussed later.

person’s debt to the creditor is considered made to the

person. A payment is also considered made to a person if

it is made to that person’s agent.

A U.S. partnership should withhold when any distributions that include amounts subject to withholding are

made. However, if a foreign partner’s distributive share of

income subject to withholding is not actually distributed,

the U.S. partnership must withhold on the foreign partner’s

distributive share of the income on the earlier of the date

that a Schedule K-1 (Form 1065) is furnished or mailed to

the partner or the due date for furnishing that schedule.

Note: If the foreign distributive share of income includes effectively connected income (ECI), see Partnership Withholding on ECTI, later.

A U.S. trust is required to withhold on the amount includible in the gross income of a foreign beneficiary to the

extent the trust’s distributable net income consists of an

amount subject to withholding. To the extent a U.S. trust is

required to distribute an amount subject to withholding but

does not actually distribute the amount, it must withhold

on the foreign beneficiary’s allocable share at the time the

income is required to be reported on Form 1042-S.

Liability for tax. As a withholding agent, you are personally liable for any tax required to be withheld. This liability

is independent of the tax liability of the foreign person to

whom the payment is made. If you fail to withhold and the

foreign payee fails to satisfy its U.S. tax liability, then both

you and the foreign person are liable for tax, as well as interest and any applicable penalties.

The applicable tax will be collected only once. If the foreign person satisfies its U.S. tax liability, you are not liable

for the tax but remain liable for any interest and penalties

for failure to withhold.

Note: Proposed regulations issued on December 18,

2018 (83 FR 64757) would allow partnerships or trusts

that are permitted to withhold in a subsequent year, with

respect to a foreign partner’s or beneficiary’s share of income for the prior year, to designate the deposit of the

withholding as attributable to the preceding year. In such a

case, the partnership or trust will be required to report the

associated amount and tax withheld on Forms 1042 and

1042-S for the preceding year. See the Instructions for

Form 1042 and the Instructions for Form 1042-S for additional information.

Determination of amount to withhold. You must withhold on the gross amount subject to chapter 3 withholding. You cannot reduce the gross amount by any deductions.

If the determination of the source of the income or the

amount subject to tax depends on facts that are not known

at the time of payment, you must withhold an amount sufficient to ensure that at least 30% of the amount subsequently determined to be subject to withholding is withheld. In no case, however, should you withhold more than

30% of the total amount paid. You may elect to hold 30%

of the payment in escrow until the earlier of the date that

the amount of income from U.S. sources or the taxable

amount can be determined or 1 year from the date the

amount is placed in escrow, at which time the withholding

becomes due, or, to the extent that withholding is not required, the escrowed amount must be paid to the payee.

Chapter 4 Withholding Requirements

When to withhold. Withholding is required at the time

you make a payment of an amount subject to withholding.

A payment is made to a person if that person realizes income, whether or not there is an actual transfer of cash or

other property. A payment is considered made to a person

if it is paid for that person’s benefit. For example, a payment made to a creditor of a person in satisfaction of that

4

You are a withholding agent for purposes of chapter 4 if

you are a U.S. or foreign person, in whatever capacity you

are acting, that has control, receipt, custody, disposal, or

payment of a withholdable payment. Similar rules for determining who is a withholding agent as those described

in Chapter 3 Withholding Requirements, earlier, also apply

for chapter 4. For purposes of chapter 4, a withholding

agent includes a participating foreign financial institution

(FFI) (including a reporting Model 2 FFI) or registered

deemed-compliant FFI to the extent such FFI makes a

withholdable payment.

Under chapter 4, a withholding agent that makes a

withholdable payment to a payee that is an FFI must withhold 30% on the payment unless the withholding agent is

able to treat the FFI as a participating FFI, deemed-compliant FFI, or exempt beneficial owner. A withholding

agent must also withhold 30% on a withholdable payment

made to a payee that is a foreign entity other than an FFI

(that is, a nonfinancial foreign entity, or NFFE) that fails to

identify its substantial U.S. owners (or certify that it does

not have any substantial U.S. owners) unless the payment

is excepted from withholding under the regulations to

Publication 515 (2026)

section 1472. A participating FFI is a withholding agent

under chapter 4 and is required to withhold on a withholdable payment to the extent required under the FFI agreement, including on a payment made to an account holder

that the FFI is required to treat as a recalcitrant account

holder. A reporting Model 1 FFI is required to withhold under chapter 4 to the extent required in the applicable intergovernmental

agreement

(IGA).

A

registered

deemed-compliant FFI (other than a reporting Model 1

FFI) is required to withhold under chapter 4 to the extent

required under the conditions applicable to its registered

deemed-compliant FFI status. See Regulations section

1.1471-5(f)(1) for a description of the types of registered

deemed-compliant FFIs that may have withholding requirements.

Generally, a withholdable payment is a payment of U.S.

source fixed or determinable annual or periodical (FDAP)

income. Specific exceptions to withholdable payments apply instead of the exemptions from withholding or taxation

provided under chapter 3. See Income Subject to Withholding, later, for more information on payments of U.S.

source FDAP income that are excepted from the definition

of withholdable payment.

If a withholding agent makes a payment subject to both

chapter 4 withholding and chapter 3 withholding, the withholding agent must apply the withholding provisions of

chapter 4, and need not withhold on the payment under

chapter 3 to the extent that it has withheld under chapter 4.

Similar rules for withholding agent liability for tax, determination of amount to withhold, and when to withhold as

those described in chapter 3 withholding requirements,

earlier, also apply for chapter 4.

Forms 1042 and 1042-S Reporting

Obligations

You are required to report payments subject to chapter 3

withholding on Form 1042-S and to file a tax return on

Form 1042. (See Returns Required, later.) You are also required to report withholdable payments to which chapter 4

withholding was (or should have been) applied on Form

1042-S and to file a tax return on Form 1042 to report the

payments. An exception from reporting may apply for

chapter 3 purposes to individuals who are not required to

withhold from a payment and who do not make the payment in the course of their trade or business. A similar exception from reporting for chapter 4 purposes may apply

to an individual making a withholdable payment outside

the course of the individual’s trade or business (including

as an agent with respect to making or receiving such payment).

Withholding and Reporting

Obligations (Other Than Forms 1042

and 1042-S Reporting for Chapter 3 or

4 Purposes)

Form 1099 reporting and backup withholding. You

may also be responsible as a payer for reporting payments to a U.S. person, generally on Form 1099. You must

withhold 24% (backup withholding rate) from certain reportable payments made to a U.S. person that is subject

to Form 1099 reporting if any of the following apply.

• The U.S. person has not provided its taxpayer identification number (TIN) in the manner required.

• The IRS notifies you that the TIN furnished by the

payee is incorrect.

• There has been a notified payee underreporting.

• There has been a payee certification failure.

In most cases, a TIN must be provided by a U.S. nonexempt recipient (a U.S. person subject to Form 1099 reporting) on Form W-9.

A payer files a tax return on Form 945 to report backup

withholding.

You may be required to file Form 1099 and, if appropriate, backup withhold, even if you do not make the payments directly to that U.S. person. For example, you are

required to report income paid to a foreign intermediary or

flow-through entity that collects for a U.S. person subject

to Form 1099 reporting. However, you may not be required

to report on Form 1099 if you make a payment to a participating FFI or registered deemed-compliant FFI that provides a withholding statement allocating the payment to a

chapter 4 withholding rate pool of U.S. payees. See Identifying the Payee, later, for more information. Also, see Section S. Special Rules for Reporting Payments Made

Through

Foreign

Intermediaries

and

Foreign

Flow-Through Entities on Form 1099 in Pub. 1099,

General Instructions for Certain Information Returns.

Tip: Foreign persons who provide a valid Form W-8 (or

applicable documentary evidence when permitted in lieu

of a Form W-8) are exempt from backup withholding and

Form 1099 reporting.

Form 8966 reporting. For chapter 4 purposes, you may

be required to report on Form 8966 if you make a withholdable payment to an entity you agree to treat as an

owner-documented FFI or to a passive NFFE. See Returns Required, later.

Wages paid to employees. If you are the employer of a

nonresident alien, you must generally withhold taxes at

graduated rates. See Pay for Personal Services Performed, later.

Effectively connected income by partnerships. A

withholding agent that is a partnership (whether U.S. or

foreign) is also responsible for withholding on its income

effectively connected with a U.S. trade or business that is

allocable to foreign partners. In the case of a publicly

Publication 515 (2026)

5

traded partnership (PTP), however, either the partnership

or a nominee may be responsible for this withholding, as

applied to distributions by the partnership (PTP distributions). See Partnership Withholding on ECTI, later, for

more information.

Transfers of interests in partnerships engaged in the

conduct of a U.S. trade or business. A withholding

agent is also responsible for withholding on the amount

realized on the transfer by a foreign partner of an interest

in a partnership (domestic or foreign) engaged in the conduct of a U.S. trade or business. See Section 1446(f)

Withholding, later, for more information, including withholding requirements applicable to brokers effecting transfers of PTP interests.

USRPI. A withholding agent may also be responsible for

withholding if a foreign person transfers a USRPI to the

agent, or if it is a corporation, partnership, trust, or estate

that distributes a USRPI to a shareholder, partner, or beneficiary that is a foreign person. See U.S. Real Property Interest, later.

Persons Subject to Chapter 3

or Chapter 4 Withholding

Chapter 3 withholding applies only to payments made to a

payee that is a foreign person. It does not apply to payments made to U.S. persons.

Usually, you determine the payee’s status as a U.S. or

foreign person or, if you are making a withholdable payment to an entity (or are an FFI making a payment to an

account holder), the payee’s chapter 4 status, based on

the documentation that person provides. See Documentation, discussed later. However, if you have received no

documentation or you cannot reliably associate all or a

part of a payment with documentation upon which you can

rely, then you must apply certain presumption rules, discussed later.

Chapter 4 withholding applies to withholdable payments made to an entity payee that is an FFI unless the

withholding agent is able to treat the FFI as a participating

FFI, deemed-compliant FFI, or exempt beneficial owner.

Chapter 4 withholding also applies to withholdable payments made to a passive NFFE that fails to identify its

substantial U.S. owners (or certify that it does not have

any substantial U.S. owners). You must establish the

payee’s chapter 4 status to determine if withholding applies by applying the documentation requirements of

chapter 4, generally by obtaining a Form W-8 (or, under an

applicable IGA, a similar agreed form) associated with the

payment, or other documentation for payments made outside of the United States on offshore obligations. See

Regulations section 1.1471-3(d) for details on these documentation requirements. Withholding under chapter 4 also

applies to account holders of a participating FFI or registered deemed-compliant FFI that the FFI is required to

treat as recalcitrant account holders.

6

This section applies to both chapters 3 and 4 except

where otherwise indicated and except where the text

clearly applies to one or the other (for example, reduced

rates and exemptions under income tax treaties).

Identifying the Payee

In most cases, the payee is the person to whom you make

the payment, regardless of whether that person is the beneficial owner of the income. However, there are situations

in which the payee is a person other than the one to whom

you actually make a payment.

U.S. agent of foreign person. For purposes of chapter 3, if you make a payment to a U.S. person and you

have actual knowledge that the U.S. person is receiving

the payment as an agent of a foreign person, you must

treat the payment as made to the foreign person. However, if the U.S. person is a financial institution (FI), defined later, you may treat the institution as the payee provided you have no reason to believe that the institution will

not comply with its own obligation to withhold under chapter 3.

For chapter 4 purposes, if you make a withholdable

payment to a U.S. person and you have actual knowledge

that the U.S. person is receiving the payment as an intermediary or agent of a foreign person, you must treat the

foreign person as the payee. However, if you make a withholdable payment to a U.S. FI or a U.S. insurance broker

(to the extent the withholdable payment is a payment of an

insurance premium) that is receiving the payment as an intermediary or agent, you may treat the FI or insurance

broker as the payee if you do not have reason to know that

the FI or insurance broker will not comply with its obligations to withhold under chapter 4.

If the payment is not subject to chapter 3 withholding

and is not a withholdable payment, you must treat the payment as made to a U.S. person and not as a payment to a

foreign person. You may be required to report the payment

on Form 1099 and, if applicable, backup withhold.

Disregarded entities. In general, a business entity that

is not a corporation and that has a single owner may be

disregarded as an entity separate from its owner (a disregarded entity) for federal tax purposes. The payee of a

payment made to a disregarded entity is the owner of the

entity.

If the owner of the entity is a foreign person, you must

apply chapter 3 withholding unless you can treat the foreign owner as a beneficial owner entitled to a reduced rate

of withholding.

If the owner is a U.S. person, you do not apply chapter 3 withholding. However, you may be required to report

the payment on Form 1099 and, if applicable, backup

withhold. You may assume that a foreign entity is not a disregarded entity unless you can reliably associate the payment with documentation provided by the owner or you

have actual knowledge or reason to know that the foreign

entity is a disregarded entity.

Special chapter 4 rules. If you make a withholdable

payment to a disregarded entity owned by an FFI, for

Publication 515 (2026)

chapter 4 purposes you must determine whether you must

treat the payment as made to a payee that is a nonparticipating FFI (to which chapter 4 withholding applies) or a

payee that is an FFI with another chapter 4 status (such as

a participating FFI). If you make a withholdable payment to

a disregarded entity that is treated as a disregarded entity

that is a branch of an FFI that cannot comply with the requirements of an applicable IGA or the regulations under

chapter 4, you must treat the payment as made to a nonparticipating FFI and withhold 30% of the payment. See

the Instructions for Form W-8BEN-E for more information

on payments to disregarded entities.

Flow-Through Entities

Chapter 3 payees. The payees of payments (other than

income effectively connected with a U.S. trade or business

and dispositions of interests in partnerships engaged in a

trade or business within the United States) made to a foreign flow-through entity are the owners or beneficiaries of

the flow-through entity. This rule applies for purposes of

chapter 3 withholding and for Form 1099 reporting and

backup withholding. Income that is, or is deemed to be, effectively connected with the conduct of a U.S. trade or

business of a flow-through entity is treated as paid to the

entity.

The following are flow-through entities.

• A foreign partnership (other than a WP).

• A foreign simple or foreign grantor trust (other than a

WT).

If the chapter 3 payee is a disregarded entity or

flow-through entity for U.S. tax purposes, but the payee is

claiming treaty benefits, see Fiscally transparent entities

claiming treaty benefits, later.

Chapter 4 payees. 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. trade or business) if the

flow-through entity is:

• An FFI that is not a participating FFI or deemed-com-

pliant 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

• An excepted NFFE that is not acting as an agent or intermediary with respect to the payment.

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).

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In most cases, you treat a payee as a flow-through entity if it provides you with a Form W-8IMY (see Documentation, later) on which it claims such status. You may also

be required to treat the entity as a flow-through entity under the presumption rules, discussed later.

For purposes of chapter 3, you must determine whether

the owners or beneficiaries of a flow-through entity are

U.S. or foreign persons, how much of the payment relates

to each owner or beneficiary, and, if the owner or beneficiary is foreign, whether a reduced rate of chapter 3 withholding applies. For purposes of chapter 4, you must determine the chapter 4 status of the owners or beneficiaries

of a flow-through entity (subject to the exceptions described above), how much of the payment relates to each

owner or beneficiary, and whether withholding under

chapter 4 applies. You make these determinations based

on the documentation and other information (contained in

a withholding statement) that is associated with the

flow-through entity’s Form W-8IMY. If you do not have all

of the information that is required to reliably associate a

payment with a specific payee, you must apply the presumption rules. See Documentation and Presumption

Rules, later.

WPs and WTs are not flow-through entities.

Foreign partnerships. A foreign partnership is any partnership (including an entity classified as a partnership)

that is not organized under the laws of any state of the

United States or the District of Columbia or any partnership that is treated as foreign under the income tax regulations. If a foreign partnership is not a WP, the payees of income are the partners of the partnership, provided the

partners are not themselves flow-through entities or foreign intermediaries. However, the payee is the partnership

itself if the partnership is claiming treaty benefits on the

basis that it is not treated as fiscally transparent in the

treaty jurisdiction and that it meets all the other requirements for claiming treaty benefits. If a partner is a foreign

flow-through entity or a foreign intermediary, you apply the

payee determination rules to that partner to determine the

payees.

For purposes of chapter 4, a foreign partnership is a

payee of a withholdable payment if the partnership is a

WP that is not acting as an agent or intermediary with respect to the payment. If the partnership is not a WP, the

payees are the partners (looking through any partners that

are flow-through entities that are not treated as payees under the chapter 4 regulations).

Example 1. A nonwithholding foreign partnership has

three partners: a nonresident alien individual, a foreign

corporation, and a U.S. citizen. You make a payment of

U.S. source interest to the partnership. Assume that the

payment is subject to chapter 3 withholding but is not a

withholdable payment. The partnership gives you a Form

W-8IMY with which it associates Form W-8BEN from the

nonresident alien, Form W-8BEN-E from the foreign corporation, and Form W-9 from the U.S. citizen. The partnership also gives you a complete withholding statement that

enables you to associate a part of the interest payment to

each partner.

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You must treat all three partners as the payees of their

part of the interest payment as if the payment were made

directly to them. Report the payments to the nonresident

alien and the foreign corporation on Forms 1042-S. Report

the payment to the U.S. citizen on Form 1099-INT. You do

not need to determine the chapter 4 status of the partnership because the payment is not a withholdable payment.

Example 2. A nonwithholding foreign partnership has

two partners: a foreign corporation and a nonwithholding

foreign partnership. The second partnership has two partners, both nonresident alien individuals. You make a payment of U.S. source interest to the first partnership. Assume that the payment is subject to chapter 3 withholding

but is not a withholdable payment. The partnership gives

you a valid Form W-8IMY with which it associates a Form

W-8BEN-E from the foreign corporation and a Form

W-8IMY from the second partnership. In addition, Forms

W-8BEN from the partners are associated with the Form

W-8IMY from the second partnership. The Forms W-8IMY

from the partnerships have complete withholding statements associated with them. Because you can reliably associate a part of the interest payment with the Form

W-8BEN-E provided by the foreign corporation and the

Forms W-8BEN provided by the nonresident alien individual partners as a result of the withholding statements, you

must treat them as the payees of the interest. You do not

need to determine the chapter 4 status of the partnership

because the payment is not a withholdable payment.

Example 3. You make a payment of U.S. source dividends to a WP. Assume that the payment is subject to

chapter 3 withholding and is not a withholdable payment.

The partnership has two partners, both foreign corporations. You can reliably associate the payment with a valid

Form W-8IMY from the partnership on which it represents

that it is a WP. You must treat the partnership as the payee

of the dividends for purposes of both chapter 3 and chapter 4, and you must determine the chapter 4 status of the

partnership.

Foreign simple and grantor trust. A trust is foreign unless it meets both of the following tests.

• A court within the United States is able to exercise primary supervision over the administration of the trust.

• One or more U.S. persons have the authority to control

all substantial decisions of the trust.

In most cases, a foreign simple trust is a foreign trust

that is required to distribute all of its income annually. A

foreign grantor trust is a foreign trust that is treated as a

grantor trust under sections 671 through 679.

The payees of a payment made to a foreign simple trust

are the beneficiaries of the trust. The payees of a payment

made to a foreign grantor trust are the owners of the trust.

However, the payee is the foreign simple or grantor trust itself if the trust is claiming treaty benefits on the basis that

it is not fiscally transparent and that it meets all the other

requirements for claiming treaty benefits. If the beneficiaries or owners are themselves flow-through entities or foreign intermediaries, you apply the payee determination

rules to that beneficiary or owner to determine the payees.

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Example. A foreign simple trust has three beneficiaries: two nonresident alien individuals and a U.S. citizen.

You make a payment of U.S. source interest to the foreign

trust. Assume that the payment is subject to chapter 3

withholding but is not a withholdable payment. The foreign

trust gives you a Form W-8IMY with which it associates

Forms W-8BEN from the nonresident aliens and a Form

W-9 from the U.S. citizen. The trust also gives you a complete withholding statement that enables you to associate

the interest payment with the forms provided by each beneficiary. You must treat all three beneficiaries as the payees of their part of the interest payment as if the payment

were made directly to them. Report the payment to the

nonresident aliens on Forms 1042-S. Report the payment

to the U.S. citizen on Form 1099-INT. You do not need to

establish the chapter 4 status of the trust because the

payment is not a withholdable payment.

Fiscally transparent entities claiming treaty benefits.

For purposes of claiming treaty benefits, if an entity is fiscally transparent for U.S. tax purposes (for example, a disregarded entity or flow-through entity for U.S. tax purposes) and the entity is or is treated as a resident of a treaty

country, it will derive the item of income and may be eligible for treaty benefits. In such case, the entity is the payee

for chapter 3 purposes. It does not need to be taxed by the

treaty country on such item, but the item must be accounted for as the entity’s income, not the interest holders’ income, under the law of the treaty country whose treaty it is

invoking. It must also meet any other requirements for

claiming benefits, including the provisions of the limitation

on benefits (LOB) article, if any, in the treaty. The entity

should provide a Form W-8BEN-E to the U.S. withholding

agent in such circumstances. If, for chapter 3 purposes,

the payee is a foreign corporation or other

non-flow-through entity for U.S. tax purposes, it is nonetheless not entitled to claim treaty benefits if the entity is

fiscally transparent in its country of residence (that is, a

foreign reverse hybrid). Instead, any interest holder resident in that country will derive its allocable share of the

items of income paid to the foreign reverse hybrid and

may be eligible for benefits. If an interest holder is a resident of a third country, the interest holder may claim treaty

benefits under the third country’s treaty with the United

States, if any, only if the foreign reverse hybrid is fiscally

transparent under the laws of the third country. If an interest holder is entitled to treaty benefits under a treaty between the United States and its country of residence, the

payee may provide a Form W-8IMY and attach Form

W-8BEN or W-8BEN-E from any interest holder that

claims treaty benefits on such income.

The determination of whether an entity is fiscally transparent is made on an item of income basis (that is, the determination is made separately for interest, dividends, royalties, etc.). An interest holder in an entity makes the

determination by applying the laws of the jurisdiction

where the interest holder is organized, incorporated, or

otherwise considered a resident. An entity is considered

to be fiscally transparent with respect to the income generally to the extent the laws of that jurisdiction require the

interest holder to separately take into account on a current

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basis the interest holder’s share of the income, whether or

not distributed to the interest holder, and the character

and source of the income to the interest holder are determined as if the income was realized directly from the

source that paid it to the entity. Subject to the standards of

knowledge for purposes of chapter 3 and standards of

knowledge for purposes of chapter 4, discussed later, you

generally make the determination that an entity is fiscally

transparent based on a Form W-8IMY provided by the entity.

For chapter 3 purposes, the payees of a payment made

to a fiscally transparent entity are the interest holders of

the entity if the interest holders are claiming treaty benefits

with respect to the payment.

For chapter 4 purposes, if you are making a withholdable payment to a fiscally transparent entity, you must apply

the rules of chapter 4 to determine the payee (applying the

rules described earlier) and whether chapter 4 withholding

applies to the payment based on the payee’s chapter 4

status. Thus, chapter 4 withholding may apply to a withholdable payment made to a fiscally transparent entity

based on the chapter 4 status of the entity even when the

interest holders in the entity would be eligible for reduced

withholding under an income tax treaty with respect to the

payment. Treaty benefits may be granted to the interest

holder when the payment made is not subject to chapter 4

withholding based on the chapter 4 status of both the entity and the interest holder.

Example. Afloat Entity is a business organization organized under the laws of country X that has an income

tax treaty in force with the United States. Afloat has two interest holders, Benson and Carlson. Benson is a corporation organized under the laws of country Y. Carlson is a

corporation organized under the laws of country Z. Both

countries Y and Z have an income tax treaty in force with

the United States.

Afloat receives royalty income from U.S. sources that is

not effectively connected with the conduct of a trade or

business in the United States and that is not a withholdable payment. The chapter 4 status of Afloat does not need

to be determined because the payment is not a withholdable payment.

For U.S. income tax purposes, Afloat is treated as a

partnership. Country X treats Afloat as a partnership and

requires the interest holders in Afloat to separately take

into account on a current basis their respective shares of

the income paid to Afloat even if the income is not distributed. The laws of country X provide that the character and

source of the income to Afloat’s interest holders are determined as if the income were realized directly from the

source that paid it to Afloat. Accordingly, Afloat is fiscally

transparent in its jurisdiction, country X.

Benson and Carlson are not fiscally transparent under

the laws of their respective countries of incorporation.

Country Y requires Benson to separately take into account

on a current basis Benson’s share of the income paid to

Afloat, and the character and source of the income to

Benson is determined as if the income were realized directly from the source that paid it to Afloat. Accordingly,

Afloat is fiscally transparent for that income under the laws

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of country Y, and Benson is treated as deriving its share of

the U.S. source royalty income for purposes of the U.S.–Y

income tax treaty. Country Z, on the other hand, treats

Afloat as a corporation and does not require Carlson to

take into account its share of Afloat’s income on a current

basis whether or not distributed. Therefore, Afloat is not

treated as fiscally transparent under the laws of country Z.

Accordingly, Carlson is not treated as deriving its share of

the U.S. source royalty income for purposes of the U.S.–Z

income tax treaty.

Foreign Intermediaries

In most cases, if you make payments to a foreign intermediary, the payees are the persons for whom the foreign intermediary collects the payment, such as account holders

or customers, not the intermediary itself. This rule applies

for purposes of chapter 3 withholding and for Form 1099

reporting and backup withholding and chapter 4 withholding, provided the intermediary is not a nonparticipating FFI

to which you make a withholdable payment to which chapter 4 withholding applies. You may, however, treat a QI that

has assumed primary withholding responsibility for a payment as the payee, and you are not required to withhold.

An intermediary is a custodian, broker, nominee, or any

other person that acts as an agent for another person. A

foreign intermediary is either a QI or an NQI. In most cases, you determine whether an entity is a QI or an NQI

based on the representations the intermediary makes on

Form W-8IMY.

For purposes of chapter 3, you must determine whether

the customers or account holders of a foreign intermediary are U.S. or foreign persons and, if the account holder

or customer is foreign, whether a reduced rate of, or exemption from, chapter 3 withholding applies. For purposes

of chapter 4, you must generally determine the chapter 4

status of the account holders of a foreign intermediary if

the payment is a withholdable payment. The determination for chapter 3 purposes is not required when withholding applies under chapter 4 (that is, when the chapter 4

status of the foreign intermediary is a nonparticipating FFI

or an entity or branch treated as a nonparticipating FFI under an applicable IGA). You make these determinations

based on the foreign intermediary’s Form W-8IMY and associated information and documentation. If you do not

have all of the information or documentation that is required to reliably associate a payment with a payee, you

must apply the presumption rules of chapter 3, and you

must apply the presumption rules of chapter 4 to the foreign intermediary if the chapter 4 status of the entity

(when required) cannot be determined. See Documentation and Presumption Rules, later.

Special rule for chapter 4. For purposes of chapter 4, a

foreign person acting as an intermediary is generally not

the payee if the foreign person is:

• An NFFE, unless the NFFE is a QI that has assumed

primary chapters 3 and 4 withholding responsibility; or

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• A participating FFI, deemed-compliant FFI, or restric-

ted distributor, unless such entity is a QI that has assumed primary chapters 3 and 4 withholding responsibility.

If you make a withholdable payment to one of the types

of entities described above, the payee is the person for

whom the agent or intermediary collects the payment.

Nonqualified intermediary (NQI). An NQI is any intermediary that is a foreign person and that is not a QI. The

payees of a payment made to an NQI for both chapter 3

and chapter 4 purposes are the customers or account

holders on whose behalf the NQI is acting.

Example. You make a payment of interest to a foreign

bank that is an NQI. Assume the payment is subject to

chapter 3 withholding but is not a withholdable payment.

The bank gives you a Form W-8IMY, the Forms W-8BEN

of two foreign persons, and a Form W-9 from a U.S. person for whom the bank is collecting the payments. The

bank also associates with its Form W-8IMY a withholding

statement on which it allocates the interest payment and

provides all other information required to be on the withholding statement. The account holders are the payees of

the interest payment. You should report the part of the interest paid to the two foreign persons on Forms 1042-S

and the part paid to the U.S. person on Form 1099-INT.

You do not need to establish the chapter 4 status of the

NQI because the payment is not a withholdable payment.

Qualified intermediary (QI). A QI is generally a foreign

intermediary (or foreign branch of a U.S. intermediary) that

has entered into a QI agreement (discussed later) with the

IRS. Certain entities may also act as QIs even when they

are not intermediaries. You may treat a QI as a payee to

the extent it assumes primary chapters 3 and 4 withholding responsibility or primary Form 1099 reporting and

backup withholding responsibility for a payment. In this situation, the QI is required to withhold the tax. You can determine whether a QI has assumed responsibility from the

Form W-8IMY provided by the QI.

A payment to a QI to the extent it does not assume primary chapters 3 and 4 withholding responsibility is considered made to the person on whose behalf the QI acts.

If a QI does not assume Form 1099 reporting and backup

withholding responsibility, you must report on Form 1099

and, if applicable, backup withhold as if you were making

the payment directly to the U.S. person. See Qualified Intermediary (QI), later, for a discussion of withholding rate

pools and when a QI may include a U.S. nonexempt recipient in a U.S. payee pool.

Additionally, as of January 1, 2023, a QI may also assume primary withholding responsibilities with respect to

PTP distributions (including withholding under section

1446(a)) and transfers of PTP interests for section 1446(f)

purposes. For discussion of those provisions, see Publicly

Traded Partnership Distributions and Section 1446(f): PTP

Interests, later.

Qualified derivatives dealers (QDDs). For the definition of QDD, see Qualified derivatives dealer (QDD), later.

For QDD liability, see Amounts paid to QDDs, later.

10

Branches of FIs. Branches of FIs are not permitted to

operate as QIs if they are located outside of countries having approved “know-your-customer” (KYC) rules. The

countries with approved KYC rules are listed at IRS.gov/

KYCRules.

QI agreement. FFIs, foreign clearing organizations,

and foreign branches of U.S. FIs or clearing organizations

can enter into an agreement with the IRS to become a QI.

An eligible entity (as defined in Regulations section

1.1441-1(e)(6)(ii)) may also enter into a QI agreement for

purposes of becoming a QDD. To enter into a QI agreement, an FFI must have a chapter 4 status as:

• A participating FFI (including a reporting Model 2 FFI),

• A registered deemed-compliant FFI (including a reporting Model 1 FFI and a nonreporting Model 2 FFI

treated as registered deemed-compliant), or

• An FFI treated as a deemed-compliant FFI under an

applicable Model 1 IGA that is subject to similar due

diligence and reporting requirements with respect to

U.S. accounts as those applicable to a registered

deemed-compliant FFI (a “registered deemed-compliant Model 1 IGA FFI”).

Certain foreign corporations that are NFFEs acting on

behalf of persons other than shareholders or foreign central banks of issue may also apply to the IRS to become

QIs.

See Revenue Procedure 2022-43, 2022-52 I.R.B. 570,

available at IRS.gov/irb/2022-43_IRB#RP-2022-52, for

more information on becoming a QI.

An entity may apply for QI status at IRS.gov/QISystem.

Note: A QI (other than an NFFE acting on behalf of

persons other than shareholders and certain central

banks) must also register at IRS.gov/FATCA to obtain its

applicable chapter 4 status and global intermediary identification number (GIIN).

Documentation requirements. For documentation

requirements applicable to payments made to QIs, for

chapters 3 and 4 purposes, see Responsibilities and Documentation, discussed later under Qualified Intermediary

(QI).

Reporting requirements. For the reporting requirements of QIs, see Form 1042-S reporting and Collective

refund procedures, discussed later under Qualified Intermediary (QI).

U.S. branches of foreign banks and foreign insurance

companies. Special rules apply to a U.S. branch of a foreign bank subject to regulatory supervision by the Federal

Reserve Board or a U.S. branch of a foreign insurance

company required to file an annual statement on a form

approved by the National Association of Insurance Commissioners with the Insurance Department of any U.S.

state, a U.S. territory, or the District of Columbia. If you

make a payment of an amount subject to chapter 3 withholding or a withholdable payment to a U.S. branch of either a foreign bank or foreign insurance company that

agrees to be treated as a U.S. person, you may treat the

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U.S. branch as a payee that is a U.S. person, provided you

receive a Form W-8IMY from the U.S. branch that you can

reliably associate with the payment. If you treat the branch

as a U.S. person, you are not required to withhold on an

amount subject to chapter 3 withholding or a withholdable

payment. Even though you agree to treat the branch as a

U.S. person, you must report the payments made to the

branch on Form 1042-S.

A territory financial institution is an FI as defined for

chapter 4 purposes (except when it is an investment entity

that is not also a depository institution, custodial institution, or specified insurance company (each as defined in

Regulations section 1.1471-5(e))), incorporated or organized under the laws of a territory of the United States. A

territory financial institution that is an intermediary or

flow-through entity is treated as a U.S. branch that agrees

to be treated as a U.S. person. The special rules described in this section apply to a territory financial institution.

If you are paying a U.S. branch an amount that is not

subject to chapter 3 withholding and is not a withholdable

payment, treat the payment as made to a foreign person,

irrespective of any agreement to treat the branch as a U.S.

person for such amounts. Consequently, amounts not

subject to chapter 3 withholding and that are not withholdable payments that are paid to a U.S. branch are not subject to Form 1099 reporting or backup withholding.

Alternatively, a U.S. branch may provide you with a

Form W-8IMY with which it associates the documentation

of the persons on whose behalf it acts. In this situation, the

U.S. branch is not treated as a U.S. person, and the payees are the persons on whose behalf the branch acts provided you can reliably associate the payment with valid

documentation from those persons. See Nonqualified Intermediary (NQI) under Documentation, later.

If you cannot reliably associate the payment with a

Form W-8IMY from the U.S. branch but you have obtained

an employer identification number (EIN) for the branch,

you should treat the payment as a payment to a foreign

person of income that is effectively connected with the

conduct of a trade or business in the United States. If you

cannot reliably associate the payment with a Form

W-8IMY from the U.S. branch and you have not obtained

an EIN for the branch, you should treat the payment as a

payment to a foreign person of income that is not effectively connected with the conduct of a trade or business in

the United States.

Withholding foreign partnership (WP) and withholding foreign trust (WT). A WP is any foreign partnership

that has entered into a WP agreement with the IRS and is

acting in that capacity with respect to its partners. A WT is

a foreign simple or grantor trust that has entered into a WT

agreement with the IRS and is acting in that capacity with

respect to its owners and beneficiaries. In order to enter

into a WP or WT agreement with the IRS, a WP or WT that

is an FFI must have chapter 4 status as a:

• Participating FFI (including a reporting Model 2 FFI),

• Registered-deemed compliant FFI (including a reporting Model 1 FFI and a nonreporting Model 2 FFI treated as registered deemed compliant),

Publication 515 (2026)

• Registered deemed-compliant Model 1 IGA FFI, or

• Retirement fund.

A WP or WT that is an NFFE may also enter into a WP

or WT agreement with the IRS. An FFI that is a foreign reverse hybrid entity may apply to enter into a WP agreement, provided that the FFI is a participating FFI, a registered deemed-compliant FFI, or a registered

deemed-compliant Model 1 IGA FFI.

A WP or WT must act in that capacity for reportable

amounts that are distributed to, or included in the distributive share of, its direct partners, beneficiaries, or owners.

A WP or WT may act in that capacity for reportable

amounts that are distributed to, or included in the distributive share of, its indirect partners, beneficiaries, or owners

that are not U.S. nonexempt recipients (except for a U.S.

nonexempt recipient that is included in a chapter 4 withholding rate pool of U.S. payees). A WP or WT acting in

that capacity must assume primary chapters 3 and 4 withholding responsibility for payments subject to withholding

and must assume certain reporting requirements with respect to its U.S. partners, beneficiaries, and owners. You

may treat a WP or WT as a payee if it has provided you

with documentation (discussed later) that represents that

it is acting as a WP or WT for such amounts.

See Revenue Procedure 2017-21, 2017-6 I.R.B. 791,

available at IRS.gov/irb/2017-06_IRB#RP-2017-21, for

more information on becoming a WP or WT.

WP agreement and WT agreement. The WP agreement and WT agreement and the application procedures

for the agreements are in Revenue Procedure 2017-21,

earlier. An entity applies for WP or WT status at IRS.gov/

QISystem. The WP or WT will be assigned a WP-EIN or

WT-EIN to be used only when acting in that capacity.

A WP or WT that is an FFI (other than a retirement

fund) must also register with the IRS at IRS.gov/FATCARegistration to obtain its applicable chapter 4 status and

GIIN.

Documentation. A WP or WT must provide you with a

Form W-8IMY that certifies that the WP or WT is acting in

that capacity and provides all other information and certifications required by the form, including its WP-EIN or

WT-EIN. When you make a withholdable payment to a

WP or WT, the WP or WT may also generally provide a

certificate of a chapter 4 status permitted of a WP or WT

(and GIIN, if applicable). The WP or WT, when acting in

such capacity, is not required to provide a withholding

statement and is not required to disclose any information

regarding its direct partners, beneficiaries, or owners, or

any indirect partner, beneficiary, or owner for which it acts

as a WP or WT that is not a U.S. nonexempt recipient (except for a U.S. nonexempt recipient included in a chapter 4 withholding rate pool of U.S. payees). A chapter 4

withholding rate pool also means a payment of a single

type of income that is allocated to U.S. payees when the

WP provides the certification required on Form W-8IMY

for allocating payments to this pool. When a WP or WT is

not acting as a WP or WT with respect to an amount distributed to, or included in the distributive share of, an indirect partner, beneficiary, or owner, it must provide you with

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a nonwithholding foreign partnership or nonwithholding

foreign trust withholding certificate on a Form W-8IMY and

documentation for its indirect partners, beneficiaries, and

owners that are not included in a chapter 4 withholding

rate pool.

Foreign Persons

Rules relevant to chapters 3 and 4. A payee is subject

to withholding only if it is a foreign person. A foreign person includes a nonresident alien individual, foreign corporation, foreign partnership, foreign trust, foreign estate,

and any other person that is not a U.S. person. It also includes a foreign branch of a U.S. FI if the foreign branch is

a QI. In most cases, the U.S. branch of a foreign corporation or partnership is treated as a foreign person. The determination of whether a foreign person is treated as an

entity (that is, as opposed to being disregarded as separate from its owner), or as a foreign corporation, foreign

partnership, or foreign trust, is made under U.S. tax rules.

If an amount is both a withholdable payment and an

amount subject to chapter 3 withholding and the withholding agent withholds under chapter 4, it may credit this

amount against any tax due under chapter 3.

Nonresident alien. A nonresident alien is an individual

who is not a U.S. citizen or a resident alien. A resident of a

foreign country under the residence article of an income

tax treaty is a nonresident alien individual for purposes of

withholding.

Married to U.S. citizen or resident alien. Nonresident alien individuals married to U.S. citizens or resident

aliens may choose to be treated as resident aliens for certain income tax purposes. However, these individuals are

still subject to the chapter 3 withholding rules that apply to

nonresident aliens for all income except wages. Wages

paid to these individuals are subject to graduated withholding. See Wages Paid to Employees, later.

Resident alien. A resident alien is an individual who is

not a citizen or national of the United States and who

meets either the green card test or the substantial presence test for the calendar year.

• Green card test. An alien is a resident alien if the in-

dividual was a lawful permanent resident of the United

States at any time during the calendar year. This is

known as the green card test because these aliens

hold immigrant visas (also known as green cards).

• Substantial presence test. An alien is considered a

resident alien if the individual meets the substantial

presence test for the calendar year. Under this test,

the individual must be physically present in the United

States on at least:

1. 31 days during the current calendar year; and

In most cases, the days the alien is in the United States

as a teacher, student, or trainee on an “F,” “J,” “M,” or “Q”

visa are not counted. This exception is for a limited period

of time.

For more information on resident and nonresident status, the tests for residence, and the exceptions to them,

see Pub. 519.

Note: If your employee is late in notifying you that their

status changed from nonresident alien to resident alien,

you may have to make an adjustment to Form 941 if that

employee was exempt from withholding of social security

and Medicare taxes as a nonresident alien. For more information on making adjustments, see chapter 13 of Pub. 15

(Circular E) .

Resident of a U.S. territory. A bona fide resident of

Puerto Rico, the U.S. Virgin Islands (USVI), Guam, the

Commonwealth of the Northern Mariana Islands (CNMI),

or American Samoa who is not a U.S. citizen or a U.S. national is treated as a nonresident alien for the withholding

rules explained here. A bona fide resident of a territory is

someone who:

• Meets the presence test,

• Does not have a tax home outside the territory, and

• Does not have a closer connection to the United

States or to a foreign country than to the territory.

For more information, see Pub. 570.

Foreign corporations. A foreign corporation is one that

does not fit the definition of a domestic corporation. A domestic corporation is one that was created or organized in

the United States or under the laws of the United States,

any of its states, or the District of Columbia.

Guam or CNMI corporations. A corporation created

or organized in, or under the laws of, Guam or the CNMI is

not considered a foreign corporation for the purpose of

withholding tax for the tax year if:

• At all times during the tax year less than 25% in value

of the corporation’s stock is owned, directly or indirectly, by foreign persons; and

• At least 20% of the corporation’s gross income is de-

rived from sources within Guam or the CNMI for the

3-year period ending with the close of the preceding

tax year of the corporation (or the period the corporation has been in existence, if less).

Note: The provisions discussed below under USVI and

American Samoa corporations will apply to Guam or

CNMI corporations when an implementing agreement is in

effect between the United States and that territory.

USVI and American Samoa corporations. A corporation created or organized in, or under the laws of, the

2. 183 days during the current year and the 2 preceding

years, counting all the days of physical presence in

the current year, but only 1/3 the number of days of

presence in the first preceding year, and only 1/6 the

number of days in the second preceding year.

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USVI or American Samoa is not considered a foreign corporation for the purposes of withholding tax for the tax

year if:

• At all times during the tax year less than 25% in value

of the corporation’s stock is owned, directly or

indirectly, by foreign persons;

• At least 65% of the corporation’s gross income is ef-

fectively connected with the conduct of a trade or business in the USVI, American Samoa, Guam, the CNMI,

or the United States for the 3-year period ending with

the close of the tax year of the corporation (or the period the corporation or any predecessor has been in

existence, if less); and

• No substantial part of the income of the corporation is

used, directly or indirectly, to satisfy obligations to a

person who is not a bona fide resident of the USVI,

American Samoa, Guam, the CNMI, or the United

States.

Foreign private foundations. A private foundation that

was created or organized under the laws of a foreign

country is a foreign private foundation. Gross investment

income from sources within the United States paid to a

qualified foreign private foundation is subject to withholding at a 4% rate (unless exempted by a treaty) rather than

the ordinary statutory 30% rate.

Other foreign organizations, associations, and charitable institutions. An organization may be exempt from

income tax under section 501(a) and chapter 4 withholding tax even if it was formed under foreign law. In most cases, you do not have to withhold tax on payments of income to these foreign tax-exempt organizations unless the

IRS has determined that they are foreign private foundations.

Payments to these organizations, however, must be reported on Form 1042-S if the payment is subject to chapter 3 withholding, even though no tax is withheld.

You must withhold tax on the unrelated business income (as described in Pub. 598) of foreign tax-exempt organizations in the same way that you would withhold tax

on similar income of nonexempt organizations when the

organization does not provide you a Form W-8ECI to certify that the income is effectively connected with a U.S.

trade or business of the organization.

means any entity that is not a U.S. person and includes a

territory entity as defined in Regulations section

1.1471-1(b)(129).

A foreign entity is subject to chapter 4 withholding if it is

a nonparticipating FFI or a passive NFFE that does not

provide the appropriate certification regarding its substantial U.S. owners. A nonparticipating FFI is an FFI other

than a participating FFI, deemed-compliant FFI, or exempt

beneficial owner. See Definitions, later, for the definitions

of these terms.

A passive NFFE is:

• An NFFE other than a publicly traded corporation,

• Certain affiliated entities related to a publicly traded

corporation,

• Certain territory entities,

• Active NFFEs, or

• Excluded FFIs.

For chapter 4 purposes, a U.S. person does not include

a foreign insurance company that has made an election

under section 953(d) if it is a specified insurance company

(defined in Regulations section 1.1471-5(e)(1)(iv)) and is

not licensed to do business in any state. Notwithstanding

the foregoing, a withholding agent should treat such entity

as a U.S. person for purposes of documenting the entity’s

status for purposes of chapters 3 and 4.

Documentation

Documentation for Chapter 3

For purposes of chapter 3, in most cases, you must withhold 30% from the gross amount paid to a foreign payee

unless you can reliably associate the payment with valid

documentation that establishes either of the following.

• The payee is a U.S. person.

• The payee is a foreign person that is the beneficial

owner of the income and is entitled to a reduced rate

of withholding under the Internal Revenue Code, or an

applicable income tax treaty.

U.S. branches of foreign persons. In most cases, a

payment to a U.S. branch of a foreign person is a payment

made to the foreign person. However, you may treat payments to U.S. branches of foreign banks and foreign insurance companies (discussed earlier) as payments made to

a U.S. person, if you and the U.S. branch have agreed to

do so, and if their agreement is evidenced by a withholding certificate, Form W-8IMY. For this purpose, a territory

financial institution acting as an intermediary or that is a

flow-through entity is treated as a U.S. branch.

For rules related to when a withholding agent may rely

on an otherwise valid withholding certificate received electronically from a third-party repository, see Regulations

section 1.1441-1(e)(4)(iv)(E).

Additional Rules Specific to Chapter 4

If you make a withholdable payment, you must determine

the chapter 4 status of payees, beneficial owners, intermediaries, and flow-through entities receiving the payment to

the extent required for chapter 4 purposes. You must also

A payee may be subject to chapter 4 withholding only if it

is a foreign entity. A foreign entity for chapter 4 purposes

Publication 515 (2026)

If withholding is applied under chapter 4 on a payment,

no withholding will be required on such payment under

chapter 3.

Documentation for Chapter 4

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determine the chapter 4 status of persons that own an interest in an entity receiving a withholdable payment that

you treat as an owner-documented FFI, provided you are

either a U.S. FI, participating FFI, or reporting Model 1 FFI.

To establish chapter 4 status, you must generally obtain a

valid withholding certificate or documentary evidence that

you can reliably associate with the payment. If you make a

payment to a passive NFFE, you must obtain either a certification that the NFFE does not have any substantial U.S.

owners, or the name, address, and TIN of each substantial U.S. owner of the NFFE (or, under an applicable IGA,

each controlling person that is a specified U.S. person).

You can reliably associate a payment with a Form W-8

for purposes of establishing a payee’s chapter 4 status in

most cases if, prior to the payment, you:

• Obtain a valid form that contains the information required for chapter 4 purposes,

• Can reliably determine how much of the payment relates to the form, and

• Have no actual knowledge or reason to know that any

of the information, certifications, or statements in, or

associated with, the form is unreliable or incorrect for

chapter 4 purposes.

See Standards of Knowledge for Purposes of Chapter 4, later, for the reason to know standards that apply for

chapter 4 purposes.

For the requirements for documenting specific chapter 4 statuses of persons receiving withholdable payments, see Regulations section 1.1471-3(d). For rules related to when a withholding agent may rely on an

otherwise valid withholding certificate received electronically from a third-party repository, see Regulations section

1.1441-1(e)(4)(iv)(E). Also, see Regulations section

1.1471-3(d) for the extent to which a withholding agent

may rely on documentary evidence (other than a Form

W-8) to establish the chapter 4 status of an entity payee,

including the forms of documentary evidence permitted for

each specific chapter 4 status. For the requirements for

documentary evidence, see Regulations section

1.1471-3(c)(5). If you make a withholdable payment to an

entity payee and cannot reliably associate the payment

with a valid withholding certificate or valid documentary

evidence, you must apply the chapter 4 presumption rules

described in Presumption Rules for Chapter 4, later.

You may rely on the same documentation for purposes

of both chapters 3 and 4 provided the documentation is

sufficient to meet the requirements of each chapter. For

example, you may use a Form W-8BEN-E to obtain both

the chapter 3 and chapter 4 statuses of an entity providing

the form.

Additional Documentation Rules

Applicable to Chapters 3 and 4

In most cases, you must reliably associate the payment

with valid documentation to apply reduced withholding

and must get the documentation before you make the

payment. The documentation is not valid if you know, or

14

have reason to know, that it is unreliable or incorrect. See

Standards of Knowledge for Purposes of Chapter 3 and

Standards of Knowledge for Purposes of Chapter 4, later.

If you cannot reliably associate a payment with valid

documentation, you must use the presumption rules discussed later to determine the rate of withholding. For example, if you do not have documentation or you cannot

determine the part of a payment that is allocable to specific documentation, you must use the presumption rules

of section 1441.

The specific types of documentation are discussed in

this section. However, see Withholding on Specific Income, later, as well as the instructions to the particular

forms. As the withholding agent, you may also want to see

the Instructions for the Requester of Forms W-8BEN,

W-8BEN-E, W-8ECI, W-8EXP, and W-8IMY.

Sections 1446(a) and (f) withholding. Under section

1446(a), a partnership must withhold tax on its ECTI allocable to its foreign partner(s) or, for a partnership that is a

PTP, the PTP or a nominee for a PTP distribution must

withhold on the amount of the distribution subject to section 1446(a) withholding made to its foreign partner(s). In

most cases, a partnership (or nominee when applicable)

determines if a partner is a foreign partner and the partner’s tax classification is based on the withholding certificate provided by the partner. This is the same documentation that is provided for chapter 3 withholding, but may

require additional information, as discussed under each of

the forms in this section. For information on section

1446(a) withholding, go to Partnership Withholding on

ECTI, later.

For information on section 1446(f) withholding, go to

Section 1446(f) Withholding, later.

Documentation rule for joint payees. If you make a

payment to joint payees (such as holders of a joint account), you need to get documentation from each payee. If

you make a payment to joint payees and cannot reliably

associate the payment with documentation from all of the

payees, you must generally presume the payment is made

to an unidentified U.S. person. If the payment is a withholdable payment and any of the payees do not appear,

by name or other information in the account file, to be an

individual, you must treat the entire amount as a payment

made to an undocumented foreign person. However, if

one of the joint payees has provided you with a Form W-9,

you must treat the payment as made to that payee.

Form W-9. In most cases, you can treat the payee as a

U.S. person if the payee gives you a Form W-9. The Form

W-9 can be used only by a U.S. person and must contain

the payee’s TIN. U.S. persons are not subject to chapter 3

withholding (or withholding under section 1446(a) or (f)),

but may be subject to:

• Form 1099 reporting and backup withholding under

section 3406,

• Reporting as a U.S. account holder of a participating

FFI or registered deemed-compliant FFI, and

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• Classification as a recalcitrant account holder of a participating FFI or registered deemed-compliant FFI for

chapter 4 purposes (including chapter 4 withholding)

when the FFI is unable to report the information required with respect to the account holder.

Forms W-8. In most cases, a foreign payee of the income should give you a form in the Form W-8 series.

If certain requirements are met, the foreign person can

give you documentary evidence, rather than a Form W-8

for chapter 3 or 4 purposes. You can rely on documentary

evidence in lieu of a Form W-8 for an amount paid outside

the United States with respect to an offshore obligation.

Refer to Offshore obligations, later, to determine whether

a payment qualifies as such a payment.

Other documentation. Other documentation may be required to claim an exemption from, or a reduced rate of,

chapter 3 withholding on pay for personal services. The

nonresident alien individual may have to give you a Form

W-4 or a Form 8233. These forms are discussed in Pay for

Personal Services Performed under Withholding on Specific Income, later.

Beneficial Owners

If all the appropriate requirements have been established

on a Form W-8BEN, W-8BEN-E, W-8ECI, W-8EXP, or, if

applicable, on documentary evidence, you can treat the

payee as a foreign beneficial owner.

Claiming treaty benefits for purposes of chapter 3.

You may apply a reduced rate of withholding under chapter 3 to a foreign person that provides a Form W-8 claiming a reduced rate of withholding under an income tax

treaty only if the person provides a U.S. or foreign TIN and

certifies that:

• It is a resident of a treaty country;

• It is the beneficial owner of the income;

• If it is an entity, it derives the income within the meaning of section 894 (it is not fiscally transparent); and

• It meets any of the applicable LOB tests contained in

the treaty and specifies the test under which it qualifies for benefits.

If the payment you make is a withholdable payment to

an entity, a requirement to withhold under chapter 4 may

apply based on the chapter 4 status of the payee regardless of whether a claim of treaty benefits may apply to

such payee or other person receiving the income.

An entity derives income for which it is claiming treaty

benefits only if the entity is not treated as fiscally transparent for that income. See Fiscally transparent entities

claiming treaty benefits, discussed earlier under

Flow-Through Entities.

LOB provisions in income tax treaties generally prevent

third-country residents (unless the treaty contains a derivative benefits rule) and others that do not have a substantial nexus to the treaty country from obtaining treaty benefits. For example, a foreign corporation may not be entitled

to a reduced rate of withholding unless a minimum

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percentage of its owners are citizens or residents of the

United States or the treaty country. Foreign entities that

are residents of a country whose income tax treaty with

the United States contains an LOB article are eligible for

treaty benefits only if they satisfy one of the objective tests

under the LOB article or obtain a favorable discretionary

determination from the U.S. competent authority.

The exemptions from, or reduced rates of, U.S. tax vary

under each treaty. You must check the provisions of the

tax treaty that apply. See Tax Treaties, later, for information

on how to access tax treaties.

If you know, or have reason to know, that an owner of

income is not eligible for treaty benefits claimed or if the

United States does not have an income tax treaty in force

with that country, you may not reduce the rate of withholding. You are not, however, responsible for misstatements

on a Form W-8, documentary evidence, or statements accompanying documentary evidence for which you did not

have actual knowledge, or reason to know, that the statements were incorrect. Certain withholding agents, such as

FIs, have limited reason-to-know requirements for this purpose. See Regulations section 1.1441-7(b) for these requirements.

Exceptions to TIN requirement. A foreign person

does not have to provide a U.S. or foreign TIN to claim a

reduced rate of withholding under a treaty for chapter 3

purposes if the requirements for the following exceptions

are met.

• Income from marketable securities (discussed next).

• Unexpected payments to an individual (discussed under U.S. or Foreign TINs, later).

The allowance to provide a foreign TIN (rather than a

U.S. TIN) does not apply to a payment to compensate an

individual for personal services.

See U.S. or Foreign TINs, later, for when a foreign person is required to provide a foreign TIN for purposes other

than making a treaty claim.

Marketable securities. A Form W-8 provided to

claim treaty benefits does not need a U.S. or foreign TIN if

the foreign beneficial owner is claiming the benefits on income from marketable securities for chapter 3 purposes.

For this purpose, income from a marketable security consists of the following items.

• Dividends and interest from stocks and debt obligations that are actively traded.

• Dividends from any redeemable security issued by an

investment company registered under the Investment

Company Act of 1940 (mutual fund).

• Dividends, interest, or royalties from units of beneficial

interest in a unit investment trust that are (or were

upon issuance) publicly offered and are registered

with the SEC under the Securities Act of 1933.

• Income related to loans of any of the above securities.

Offshore obligations. An offshore obligation is an account maintained at an office or branch of a bank or other

FI located outside the United States or an obligation, contract, or other instrument with respect to which the payer

15

of the payment is either engaged in business as a broker

or dealer in securities or an FI that engages in significant

activities at an office or branch located outside the United

States.

A payment is made outside the United States if you

complete the acts necessary to effect the payment outside

the United States. However, an amount paid by a bank or

other FI on a deposit or account will usually be treated as

paid at the branch or office where the amount is credited

unless the other requirements of Regulations section

1.6049-5(e)(2) are met with respect to the branch or office, unless the amount is collected by the FI as an agent

of the payee.

If a payment is made outside the United States with respect to an offshore obligation, a payee may give you

documentary evidence, rather than a Form W-8, to establish that the payee is a foreign person. See Regulations

section 1.6049-5(c)(1) for the requirements for documentary evidence for offshore obligations. For accounts

opened on or after July 1, 2014, through December 31,

2014, you may use the rules regarding the use of documentary evidence under Regulations sections 1.6049-5(c)

(1) and (c)(4) as in effect prior to the issuance of the temporary regulations.

You may rely on documentary evidence given to you by

an NQI or a flow-through entity with its Form W-8IMY. This

rule applies even though you make the payment to an NQI

or flow-through entity in the United States. In most cases,

the NQI or flow-through entity that gives you documentary

evidence will also have to give you a withholding statement, discussed later.

Documentary evidence. You may apply a reduced

rate of withholding to income from marketable securities

(discussed earlier) paid outside the United States for

chapter 3 purposes with respect to an offshore obligation

if the beneficial owner gives you documentary evidence in

place of a Form W-8. To claim treaty benefits, the documentary evidence must be one of the following.

1. A certificate of residence that:

a. Is issued by a tax official of the treaty country of

which the foreign beneficial owner claims to be a

resident,

b. States that the person has filed its most recent income tax return as a resident of that country, and

c. Is issued within 3 years before it is presented to

you.

2. Documentation for an individual that:

a. Includes the individual’s name, address, and photograph;

b. Is an official document issued by an authorized

governmental body; and

c. Is issued no more than 3 years prior to being presented to you.

3. Documentation for an entity that:

b. Includes the address of its principal office in the

treaty country, and

c. Is an official document issued by an authorized

governmental body.

In addition to the documentary evidence, a foreign beneficial owner that is an entity must provide a statement

that it derives the income for which it claims treaty benefits

and that it meets one or more of the tests set forth in an

LOB article, if any (or similar provision), contained in the

applicable treaty and must identify the specific test in the

LOB article under which it qualifies for benefits. In the

case of a withholdable payment made to an entity, you

must also obtain the applicable documentation to establish that withholding does not apply under chapter 4.

Form W-8BEN. This form is used by a foreign individual

to:

• Establish foreign status;

• Claim that such individual is the beneficial owner of

the income for which the form is being furnished or a

partner in a partnership subject to withholding under

section 1446(a) or a transferee of an interest in a partnership under section 1446(f); and

• If applicable, claim a reduced rate of, or exemption

from, withholding under an income tax treaty.

A withholding agent, in some cases, may substitute its

own form for a Form W-8BEN for individuals.

Form W-8BEN may also be used to claim that the foreign individual is exempt from Form 1099 reporting and

backup withholding for income that is not subject to chapter 3 withholding and is not a withholdable payment. For

example, a foreign person may provide a Form W-8BEN to

a broker to establish that the gross proceeds from the sale

of securities are not subject to Form 1099 reporting or

backup withholding.

Date of birth requirement for certain account holders. If you are a U.S. office or branch of a depository institution, custodial institution, investment entity, or specified

insurance company (each as defined in Regulations section 1.1471-5(e)) documenting an individual account

holder (as defined in Regulations section 1.1471-5(a)(3))

of an account that is a financial account (as defined in

Regulations section 1.1471-5(b)), you must obtain the individual account holder’s date of birth on the Form

W-8BEN in order for the form to not be invalid for a payment of U.S. source income reportable on Form 1042-S. If

the individual’s date of birth is not provided on the Form

W-8BEN, the form is still valid if you otherwise have the

date of birth in your account files for the account holder or

you obtain the date of birth on a written statement (including a written statement transmitted by email) from the account holder and associate the written statement with the

Form W-8BEN. See the related foreign TIN requirement

discussed under Foreign TIN requirement for account

holders, later, which also generally applies with respect to

accounts described in this paragraph.

a. Includes the name of the entity,

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Form W-8BEN-E. This form is used by a foreign entity to:

• Establish foreign status;

• Establish an entity’s chapter 4 status to the extent required for chapter 4 purposes;

• Claim that such entity is the beneficial owner of the income for which the form is being furnished or a partner in a partnership subject to withholding under section 1446(a) or (f) (excluding a partnership or grantor

trust); and

• If applicable, claim a reduced rate of, or exemption

from, chapter 3 withholding under an income tax

treaty.

Form W-8BEN-E may also be used to claim that the foreign entity is exempt from Form 1099 reporting and

backup withholding for income that is not subject to chapter 3 withholding and is not a withholdable payment. For

example, a foreign entity may provide a Form W-8BEN-E

to a broker to establish that the gross proceeds from the

sale of securities are not subject to Form 1099 reporting or

backup withholding.

An entity payee may also provide a Form W-8BEN-E to

establish that certain income from notional principal contracts is not effectively connected with the conduct of a

U.S. trade or business. In addition, a foreign hybrid entity

claiming treaty benefits on its own behalf should provide

you with a Form W-8BEN-E with respect to the income for

which treaty benefits are being claimed. In certain cases,

a similar agreed form may be associated with the payment

instead of a Form W-8BEN-E.

Form W-8ECI. This form is used by a foreign person to:

• Establish foreign status,

• Claim that such person is the beneficial owner of the

income for which the form is being furnished, and

• Claim that the income is effectively connected with the

conduct of a trade or business in the United States.

(See Effectively Connected Income, later.)

• Claim that the person is a dealer in securities for the

exception to withholding under Regulations section

1.1446(f)-4(b)(6). See Section 1446(f): PTP Interests,

later.

ECI for which a valid Form W-8ECI has been provided

is generally not subject to chapter 3 or chapter 4 withholding.

If a partner submits this form to a partnership, the income claimed to be effectively connected with the conduct of a U.S. trade or business is subject to withholding

under section 1446. If the partner has made, or will make,

an election under section 871(d) or 882(d), the partner

must submit Form W-8ECI, and attach a copy of the election, or a statement of intent to elect, to the form.

Caution: If the partner’s only ECI is the income allocated

from the partnership and the partner is not making the

election under section 871(d) or 882(d), the partner

should provide Form W-8BEN or W-8BEN-E to the partnership.

Publication 515 (2026)

Form W-8EXP. This form is used by a foreign government, international organization, foreign central bank of issue, foreign tax-exempt organization, foreign private foundation, or government of a U.S. territory to:

• Establish foreign status,

• Establish the entity’s chapter 4 status to the extent required for chapter 4 purposes,

• Claim that such person is the beneficial owner of the

income for which the form is being furnished, and

• Claim an exemption from withholding under both

chapter 3 and chapter 4 for such entity or that the entity is a foreign private foundation subject to the 4%

tax. See section 1443 for the withholding required for

a payment made to such an entity.

If the government or organization named on the form is

a partner in a partnership carrying on a trade or business

in the United States, the ECTI allocable to the partner is

subject to withholding under section 1446.

See also Foreign Governments and Certain Other Foreign Organizations, later.

Foreign Intermediaries and Foreign

Flow-Through Entities

Payments made to a foreign intermediary or foreign

flow-through entity that is not a QI that assumes primary

chapters 3 and 4 withholding responsibility, a WP, a WT, or

a branch treated as a U.S. person (see U.S. branches of

foreign banks and foreign insurance companies, earlier)

are treated as made to the payees on whose behalf the intermediary or entity acts except when the intermediary or

flow-through entity is subject to chapter 4 withholding. See

Flow-Through Entities and Foreign intermediaries, earlier.

The Form W-8IMY provided by a foreign intermediary or

flow-through entity must be accompanied by additional information for you to be able to reliably associate the payment with a payee. The additional information required depends on the type of intermediary or flow-through entity

and the extent of the withholding responsibilities it assumes.

Form W-8IMY. This form is used by foreign intermediaries and foreign flow-through entities, as well as certain

U.S. branches for chapter 3 or 4 purposes, or when applicable, for section 1446(a) or (f) purposes, to:

• Represent that a foreign person is a QI or an NQI;

• Establish the entity’s chapter 4 status when required

for chapter 4 purposes;

• When applicable, certify that the entity is a participat-

ing FFI, a registered deemed-compliant FFI, or a QI

that may provide a withholding statement allocating a

payment to a chapter 4 withholding rate pool of U.S.

payees;

• Represent, if applicable, that the QI is assuming pri-

mary chapters 3 and 4 withholding responsibility

and/or primary Form 1099 reporting and backup withholding responsibility;

17

• Represent that a foreign partnership or a foreign simple or grantor trust is a WP or a WT;

• Represent that a foreign flow-through entity is a nonwithholding foreign partnership, or a nonwithholding

foreign trust;

• Represent that the provider is a U.S. branch of a for-

eign bank or insurance company and either is agreeing to be treated as a U.S. person or is transmitting

documentation of the persons on whose behalf it is

acting for the payments;

• Represent its status as a qualified securities lender

with respect to payments of U.S. source substitute dividends;

• Represent its status as a QI acting as a QDD for certain payments; and

• Represent that, for purposes of section 1446, it is an

upper-tier foreign partnership or a foreign grantor trust

and that the form is being used to transmit the required documentation. For information on qualifying as

an upper-tier foreign partnership, see Regulations

section 1.1446-5.

For purposes of chapter 4, an intermediary or

flow-through entity that is a participating FFI or registered

deemed-compliant FFI receiving a withholdable payment

may, instead of providing documentation for each payee,

provide pooled allocation information, as described under

FFI withholding statement next.

FFI withholding statement. An FFI withholding

statement must be provided by a participating FFI or registered deemed-compliant FFI (including a U.S. branch of a

participating FFI that is not treated as a U.S. person) that

is an NQI, nonwithholding foreign partnership, nonwithholding foreign trust, or a QI that makes an election to be

withheld on for chapter 4 purposes (that is, a QI that does

not assume chapter 3 or 4 withholding responsibility), as

described under qualified intermediary (QI), later.

An FFI withholding statement may include either

payee-specific information or pooled information. If the

withholding statement includes pooled information, the

withholding statement must indicate the portion of the

payment allocable to:

• A chapter 4 withholding rate pool of U.S. payees,

• Each class of recalcitrant account holders under Regulations section 1.1471-4(d)(6) or a single pool for a

QI, or

• A class of nonparticipating FFIs.

If the withholding statement includes payee-specific information, it must indicate both the portion of the payment

allocated to each payee and each payee’s chapter 4 status.

Any withholding statement provided by an FFI other

than an FFI acting as a WP, WT, or QI with respect to the

account must also identify each intermediary or

flow-through entity that receives the payment and such

entity’s chapter 4 status and GIIN, when applicable.

18

For additional information on the requirements for FFI

withholding statements, see Regulations section

1.1471-3(c)(3)(iii)(B)(2).

Chapter 4 withholding statement. A chapter 4 withholding statement must be provided by the following.

• A territory financial institution that does not agree to

be treated as a U.S. person.

• A U.S. branch that is not a U.S. branch of a participating FFI.

• An NFFE or certified deemed-compliant FFI that is an

NQI, nonwithholding foreign partnership, or nonwithholding foreign trust and is not the payee.

A chapter 4 withholding statement must contain the following.

• The name, address, TIN (if any), entity type, and

chapter 4 status of each payee.

• The amount allocated to each payee.

• A valid withholding certificate or other appropriate

documentation sufficient to establish the chapter 4

status of each payee, and each intermediary or

flow-through entity that receives the payment on behalf of the payee.

• Any other information the withholding agent reasonably requests in order to fulfill its obligations under

chapter 4.

A chapter 4 withholding statement is permitted to provide pooled allocation information with respect to payees

that are treated as nonparticipating FFIs.

Caution: A Form W-8 must include a U.S. TIN for a partner to be valid for purposes of a claim of exemption or reduced withholding under section 1446(a) or (f). See the instructions for the applicable Form W-8.

Qualified Intermediary (QI)

In most cases, a QI is any foreign intermediary that has

entered into a QI agreement (discussed earlier) with the

IRS with respect to the withholding and reporting required

under chapters 3 and 4 and for purposes of Form 1099 reporting and backup withholding under section 3406. Additionally, starting January 1, 2023, a QI may also assume

certain withholding responsibilities with respect to PTP

distributions (including withholding under section 1446(a))

and certain transfers of PTP interests for section 1446(f)

purposes when acting as an intermediary. For discussion

of those provisions, see Publicly Traded Partnership Distributions and Section 1446(f): PTP Interests, later. A foreign

entity that is a QI acting as a QDD or that is acting with respect to payments of substitute interest (as permitted by

the QI agreement) can act as a QI even though it is not receiving payments as an intermediary. A foreign entity that

has received a QI employer identification number (QI-EIN)

may represent on Form W-8IMY that it is a QI. The QI can

claim that it is a QI until the IRS revokes its QI-EIN.

A QI can be either an FFI or an NFFE. An FFI that is a

QI must be a participating FFI (including a reporting Model

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2 FFI), a registered deemed-compliant FFI (including a reporting Model 1 FFI and a nonreporting Model 2 FFI treated as a registered deemed-compliant FFI), or an FFI treated as a deemed-compliant FFI under an applicable

Model 1 IGA that is subject to similar due diligence and reporting requirements with respect to its U.S. accounts as

those applicable to a registered deemed-compliant FFI

(including the requirement to register with the IRS) (defined in the QI agreement as a “registered deemed-compliant Model 1 IGA FFI”). Thus, you must identify the chapter 4 status of an FFI, certifying its status as a QI as one of

the chapter 4 statuses referenced in the preceding sentence on a Form W-8IMY when a chapter 4 status is required for chapter 4 purposes.

Responsibilities and documentation for chapters 3

and 4. Payments made to a QI that does not assume primary chapters 3 and 4 withholding responsibilities are

treated as paid to its account holders. However, a QI is not

required to provide you with documentation it obtains from

its foreign account holders or from U.S. exempt recipients

(U.S. persons exempt from Form 1099 reporting). Instead,

it provides you with a withholding statement that contains

either chapter 3 or chapter 4 withholding rate pool information. A chapter 4 withholding rate pool is a payment of

a single type of income that is a withholdable payment that

is allocated to payees that are nonparticipating FFIs or recalcitrant account holders (in a single pool). A chapter 4

withholding rate pool also means a payment of a single

type of income that is allocated to U.S. payees when the

QI provides the certification required on Form W-8IMY for

allocating payments to this pool and a withholding statement. A QI may include in its chapter 4 withholding rate

pools its direct account holders as well as account holders

of another QI or a participating FFI or registered

deemed-compliant FFI. With respect to a payment to a

foreign person for which no chapter 4 withholding is required, a chapter 3 withholding rate pool is a payment of a

single type of income that is subject to a single rate of

withholding and that is reported on Form 1042-S under a

single chapter 4 exemption code. Payments made to U.S.

exempt recipients may also be included in a chapter 3

withholding rate pool to which withholding does not apply.

A QI is required to provide you with information regarding U.S. nonexempt recipients (U.S. persons subject to

Form 1099 information reporting) and to provide you withholding rate pool information separately for each such

U.S. person unless it has assumed primary Form 1099 reporting and backup withholding responsibility and meets

the requirements to include these recipients in a U.S.

payee pool. For the alternative procedure for providing

withholding rate pool information for U.S. nonexempt persons not included in a chapter 4 withholding rate pool of

U.S. payees, see the Instructions for Form W-8IMY.

The withholding statement must:

1. Designate those accounts for which it acts as a QI;

2. Designate those accounts for which it assumes primary chapters 3 and 4 withholding responsibility

and/or primary Form 1099 reporting and backup withholding responsibility;

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3. If applicable, designate the accounts for which it acts

as a qualified securities lender with respect to any

U.S. source substitute dividend payments;

4. If applicable, designate those accounts for which it

acts as a QDD (see the QDD withholding statement

section of the Instructions for Form W-8IMY for additional requirements);

5. Provide sufficient information for you to allocate the

payment, as applicable, to chapter 3 withholding rate

pools and, for payments that are withholdable payments, chapter 4 withholding rate pools of nonparticipating FFIs and recalcitrant account holders when the

QI has not assumed primary chapter 3 or 4 withholding responsibility; and

6. Provide sufficient information for you to allocate payments to each U.S. nonexempt recipient or to a pool

of U.S. payees to the extent described earlier under

this heading.

The extent to which you must have withholding rate

pool information depends on the withholding and reporting

obligations assumed by the QI.

If a QI that is permitted to do so by the QI agreement

obtains documentary evidence under the “KYC” rules that

apply to the QI under local law, and the documentary evidence is of a type specified in an attachment to the QI

agreement, the documentary evidence remains valid until

there is a change in circumstances or the QI knows the information is incorrect. A QI may rely on a Form W-8 until

its validity expires under Regulations section 1.1441-1(e)

(4)(ii) and may rely on documentary evidence not obtained pursuant to “KYC” rules until its validity expires under Regulations section 1.6049-5(c).

Primary chapters 3 and 4 withholding responsibilities not assumed. If a QI does not assume primary

chapters 3 and 4 withholding responsibility or primary

Form 1099 reporting and backup withholding responsibility for the payment, you can reliably associate the payment with valid documentation only to the extent you can

reliably determine the part of the payment that relates to

each withholding rate pool for foreign and U.S. payees.

Unless the alternative procedure applies and the QI is permitted to include U.S. nonexempt recipients in a chapter 4

withholding rate pool of U.S. payees, the QI must provide

you with a separate withholding rate pool for each U.S.

nonexempt recipient that must be reported on Form 1099.

If you and the QI agree, the QI may apply the alternative

procedures for U.S. nonexempt recipients by establishing

a single withholding rate pool (not subject to backup withholding) for all U.S. nonexempt recipient account holders

for whom the QI is required to report on Form 1099 and

has provided you with Forms W-9 prior to you making the

reportable payment, or, if applicable, designated broker

proceeds to which backup withholding does not apply.

The QI must provide a Form W-9 or, in the absence of the

form, the name, address, and TIN, if available, for each

U.S. nonexempt recipient.

Primary chapters 3 and 4 withholding responsibilities assumed. If you make a payment to a QI that

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assumes primary chapters 3 and 4 withholding responsibilities (but not primary Form 1099 reporting and backup

withholding responsibility), you can reliably associate the

payment with valid documentation only to the extent you

can reliably determine the part of the payment that relates

to the chapter 4 withholding rate pools and chapter 3 withholding rate pools, as applicable, and the part of the payment attributable to withholding rate pools for each U.S.

nonexempt recipient, unless the alternative procedure applies for Form 1099 reporting and/or backup withholding

purposes. The QI must provide a Form W-9 or, in the absence of the form, the name, address, and TIN, if available, for such person.

Primary chapters 3 and 4 withholding responsibilities and Form 1099 reporting and backup withholding responsibilities assumed. If you make a payment

to a QI that assumes primary chapters 3 and 4 withholding

responsibilities and primary Form 1099 reporting and

backup withholding responsibility, you can reliably associate the payment with valid documentation provided that

you receive a valid Form W-8IMY. It is not necessary to associate the payment with any chapter 3 or chapter 4 withholding rate pools.

If you make a payment to a QI that also acts as a QDD,

the QI must provide a withholding statement designating

the accounts for which it acts as a QDD even if it assumes

primary withholding responsibility for all payments. In addition, the QI must provide all information required for the

QDD accounts.

Example. You make a payment of U.S. source dividends to a QI. It has five customers: two are foreign persons who have provided documentation entitling them to a

15% rate of withholding on dividends; two are foreign persons subject to a 30% rate of withholding on dividends;

and one is a U.S. individual who provides it with a Form

W-9. Each customer is entitled to 20% of the dividend

payment. The QI does not assume any primary withholding responsibility. The QI gives you a Form W-8IMY with

which it associates the Form W-9 and a withholding statement that allocates 40% of the dividend to a 15% withholding rate pool, 40% to a 30% withholding rate pool, and

20% to the U.S. individual. You should report on Forms

1042-S, 40% of the payment as made to a 15% rate dividend pool and 40% of the payment as made to a 30% rate

dividend pool. The part of the payment allocable to the

U.S. individual (20%) is reportable on Form 1099-DIV.

Joint account treatment for chapters 3 and 4. A QI

may apply joint account treatment to a partnership or trust

if the partnership or trust meets the following conditions.

• It is a nonwithholding foreign partnership or nonwithholding foreign trust that is either a simple or grantor

trust.

• It is a certified deemed-compliant FFI (other than a

registered deemed-compliant Model 1 IGA FFI), an

owner-documented FFI with respect to the QI, an exempt beneficial owner, an NFFE, or is covered as an

account that is excluded from the definition of financial

account under Annex II of an applicable IGA or under

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Regulations section 1.1471-5(a) and has provided the

QI with a certification that it has maintained such

chapter 4 status during each certification period.

• It is a direct account holder of the QI.

• None of its partners, beneficiaries, or owners is a

flow-through entity or is acting as an intermediary for a

payment made by the QI to the partnership or trust,

and none of its partners, beneficiaries, or owners is a

U.S. person.

• None of its foreign partners, beneficiaries, or owners is

subject to withholding or reporting under chapter 4.

• It agrees to make available upon request to the QI (or

QI’s reviewer) records that establish it has provided

the QI with documentation for purposes of chapters 3

and 4 for all of its partners, beneficiaries, or owners.

For information on these rules, see section 4.05 of the

QI agreement in Revenue Procedure 2022-43.

Agency option. A QI may apply the agency option to a

partnership or trust under which the partnership or trust

agrees to act as an agent of the QI and to apply the provisions of the QI agreement to its partners, beneficiaries, or

owners, except for any account holder for which it acts as

a QDD. A QI and a partnership or trust may only apply the

agency option if the partnership or trust meets the following conditions.

• It is a nonwithholding foreign partnership or nonwithholding foreign trust that is either a simple or grantor

trust.

• It is either a direct account holder of the QI or an indi-

rect account holder of the QI that is a direct partner,

beneficiary, or owner of a partnership or trust to which

the QI also applies the agency option.

• It is an FFI that is a certified deemed-compliant FFI

(other than a registered deemed-compliant Model 1

IGA FFI), an owner-documented FFI with respect to

the QI, an NFFE, an exempt beneficial owner, or is

covered as an account that is excluded from the definition of financial account under Annex II of an applicable IGA or under Regulations section 1.1471-5(a)

and has provided the QI with a certification that it has

maintained such chapter 4 status during each certification period.

• None of its partners, beneficiaries, or owners is a WT,

WP, participating FFI, registered deemed-compliant

FFI, registered deemed-compliant Model 1 IGA FFI, or

another QI acting as an intermediary for a payment

made by the QI to the partnership or trust.

• It agrees to permit the QI to treat its direct and indirect

partners, beneficiaries, or owners as direct and indirect account holders, respectively, of the QI under the

QI agreement.

• It agrees to comply with the compliance procedures of

the QI agreement.

For information on these rules, see section 4.06 of the

QI agreement in Revenue Procedure 2022-43.

Publication 515 (2026)

Form 1042-S reporting. A QI is generally permitted to

report payments made to its foreign account holders on a

pooled basis rather than reporting payments to each account holder specifically. Pooled basis reporting is not

available for payments to certain account holders, such as

NQIs, QDDs, flow-through entities (discussed earlier) and

certain of their account holders and owners, private arrangement intermediaries, and, in certain circumstances,

QIs, WPs, and WTs. Notwithstanding these requirements,

separate Forms 1042-S are not issued to account holders

that the QI is permitted to include in a chapter 4 withholding rate pool.

Collective refund procedures. A QI may seek a refund

of tax withheld under chapters 3 and 4 on behalf of its account holders when the QI has not issued a Form 1042-S

to the account holders that received the payment that was

subject to overwithholding. The account holders, therefore, are not required to file claims for refund with the IRS

to obtain refunds, but rather may obtain them from the QI.

A QI may obtain a refund of tax withheld under chapter 4,

however, to the extent permitted under the QI agreement.

Nonqualified Intermediary (NQI)

If you are making a payment to an NQI or U.S. branch that

is using Form W-8IMY to transmit information about the

branch’s account holders or customers for chapter 3 or 4

purposes, you can treat the payment (or a part of the payment) as reliably associated with valid documentation

from a specific payee only if, before making the payment:

• You can allocate the payment to a valid Form W-8IMY;

• You can reliably determine how much of the payment

relates to valid documentation provided by a payee (a

person that is not itself a foreign intermediary,

flow-through entity, or U.S. branch with a chapter 4

withholding rate pool) (see Pooled withholding information, later); and

• You have sufficient information to report the payment

on Form 1042-S or Form 1099, if reporting is required.

Withholding statement. The NQI or U.S. branch must

give you certain information on a withholding statement

that is associated with the Form W-8IMY for chapter 3 or 4

purposes. A withholding statement must be updated to

keep the information accurate prior to each payment. See,

however, Regulations section 1.1441-1(e)(3)(iv)(C)(3) for

when a withholding agent may instead accept an alternative withholding statement.

For chapter 4 purposes. An NQI receiving a withholdable payment must provide a withholding statement

that satisfies the requirements of an FFI withholding statement or, if the NQI is not a participating FFI or registered

deemed-compliant FFI, a chapter 4 withholding statement.

An FFI withholding statement may allocate the payment

to chapter 4 reporting rate pools (as appropriate), including a chapter 4 withholding rate pool for nonparticipating

FFIs, recalcitrant account holders (in each class of account holders, as described in the chapter 4 regulations),

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and, for an NQI that is a participating FFI (including a reporting Model 2 FFI) or a registered deemed-compliant

FFI (including a reporting Model 1 FFI), U.S. payees. However, an NQI may allocate a payment of a reportable

amount (regardless of whether the payment is a withholdable payment) to a chapter 4 withholding rate pool of U.S.

payees when the NQI satisfies the requirements for providing such a pool, including the requirement to certify to

its status as a participating FFI, including a reporting

Model 2 FFI, or registered deemed-compliant FFI, including a reporting Model 1 FFI.

If the FFI withholding statement instead includes

payee-specific information for purposes of chapter 4, it

must indicate both the portion of the payment allocated to

each payee and each payee’s chapter 4 status. The withholding statement must also identify each intermediary or

flow-through entity that is receiving a payment (excluding

any intermediary or flow-through entity that is an account

holder or interest holder in another QI, WP, or WT), each

such entity’s chapter 4 status and GIIN (if applicable)

when required for chapter 4 purposes, and the chapter 4

withholding rate pools associated with each such entity.

A chapter 4 withholding statement must contain the

name, address, TIN (if any), entity type, chapter 4 status

of each payee, the amount allocated to each payee, and a

valid withholding certificate or other documentation sufficient to establish each payee’s chapter 4 status for payees

that are not included in a chapter 4 withholding rate pool

of nonparticipating FFIs. The withholding statement must

also identify each intermediary or flow-through entity that

is receiving a payment (excluding any intermediary or

flow-through entity that is an account holder or interest

holder in another QI, WP, or WT), each such entity’s chapter 4 status and GIIN (if applicable), and the chapter 4

withholding rate pools associated with each such entity.

An allocation of a payment to an NQI, nonwithholding foreign partnership, or nonwithholding foreign trust of an

amount subject to chapter 3 withholding to a chapter 4

withholding rate pool of U.S. payees must identify the payees consistent with the description in Regulations section

1.1471-3(c)(3)(iii)(B)(2)(iii).

For chapter 3 purposes. The withholding statement

should allocate for chapter 3 purposes only the portion of

the payment that was not allocated to a chapter 4 withholding rate pool or to a payee identified on a withholding

statement to whom withholding was applied under chapter 4. For chapter 3 purposes, a withholding statement

must include the information described below for a reportable amount.

1. The name, address, and TIN (if any, or if required) of

each person for whom documentation is provided.

2. The type of documentation (documentary evidence,

Form W-8, or Form W-9) for every person for whom

documentation has been provided, and, for a withholdable payment, that the documentation establishes the payee’s chapter 4 status to the extent required for chapter 4 purposes.

3. The status of the person for whom the documentation

has been provided, such as whether the person is a

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U.S. exempt recipient, U.S. nonexempt recipient, or a

foreign person. For a foreign person, the statement

must indicate whether the person is the beneficial

owner or a foreign intermediary, flow-through entity, or

a U.S. branch that is not included in a chapter 4 withholding rate pool or in a pool of payees under the alternative procedures (see Alternative procedure,

later).

4. The type of recipient the person is, based on the recipient codes used on Form 1042-S.

5. Information allocating each payment, by income type,

to each payee (including U.S. exempt and nonexempt

recipients) for whom documentation has been provided that is not included in a chapter 4 withholding rate

pool or in a pool of payees under the alternative procedures (see Alternative procedure, later).

6. The rate of withholding that applies to each foreign

person to whom a payment is allocated.

7. A foreign payee’s country of residence.

8. If a reduced rate of withholding is claimed under

chapter 3, the basis for a reduced rate of withholding

(for example, portfolio interest, treaty benefit, etc.).

9. In the case of treaty benefits claimed by entities,

whether the applicable LOB statement and the statement that the foreign person derives the income for

which treaty benefits are claimed, have been made.

10. The name, address, and TIN (if any) and, for a withholdable payment, the chapter 4 status (if required)

and GIIN (if applicable) of any other NQI, flow-through

entity, or U.S. branch from which the payee will directly receive a payment.

11. Any other information a withholding agent requests to

fulfill its reporting and withholding obligations.

Alternative procedure. Under this alternative procedure,

the NQI can give you the information that allocates each

payment to each foreign and U.S. exempt recipient or

chapter 4 withholding rate pool by January 31 following

the calendar year of payment, rather than before the payment is made, as otherwise required. To take advantage

of this procedure, the NQI must (a) inform you, on its withholding statement, that it is using the alternative procedure; and (b) obtain your consent. You must receive the

withholding statement with all the required information

(other than item 5) before the NQI makes the payment.

Caution: The alternative procedure cannot, however, be

used for payments to U.S. nonexempt recipients other

than those recipients included in a chapter 4 withholding

rate pool of U.S. payees. See Chapter 4, later. Therefore,

an NQI must provide you with allocation information for

any U.S. nonexempt recipients not included in a chapter 4

withholding rate pool of U.S. payees before the NQI

makes a payment.

Pooled withholding information for chapters 3 and

4. If an NQI uses the alternative procedure, it must provide you with withholding rate pool information, as

22

opposed to individual allocation information, before the

payment of a reportable amount. The NQI must provide

you with the payee specific allocation information (information allocating each payment to each payee) by January 31 following the calendar year of payment, except as

otherwise permitted for chapter 4 purposes, when using

this procedure.

Chapter 4. In the case of a reportable amount that is

also a withholdable payment, an NQI may include

amounts allocable to a chapter 4 withholding rate pool

(other than a chapter 4 withholding rate pool of U.S. payees) and payees subject to chapter 4 withholding for

whom the NQI will provide payee-specific information in a

30% rate pool together with payees subject to chapter 3

withholding at the 30% rate. For the amount of the payment allocable to a chapter 4 withholding rate pool of U.S.

payees, an NQI may include amounts allocable to the pool

with other amounts exempt from withholding (and an NQI

may allocate payments to this pool regardless of whether

the payment is a withholdable payment) and may not otherwise apply these provisions for payments made to U.S.

nonexempt recipients. The NQI must identify prior to the

payment each chapter 4 withholding rate pool to be allocated a portion of the payment, in addition to each payee

to be allocated the payments that is not included in such a

pool. The NQI must then also allocate, by January 31 following the calendar year of the payment, the portion of the

payment to each such pool in addition to allocating the

payment to each payee that is not included in the pool.

Failure to provide allocation information. If an NQI

fails to provide you with the payee specific allocation information for a withholding rate pool or chapter 4 withholding

rate pool by January 31, you must not apply the alternative

procedure to any of the NQI’s withholding rate pools from

that date forward. You must treat the payees as undocumented and apply the presumption rules, discussed later

in Presumption Rules. An NQI is deemed to have failed to

provide specific allocation information if it does not give

you such information for more than 10% of any one withholding rate pool.

However, if you receive such information by February

14, you may make the appropriate adjustments to repay

any excess withholding incurred between February 1 and

on or before February 14.

If the NQI fails to allocate more than 10% of the payment to a withholding rate pool by February 14 following

the calendar year of payment, you must file a Form

1042-S for each account holder in the pool on a pro-rata

basis (treating a chapter 4 withholding rate pool as an account holder for this purpose and excluding U.S. exempt

recipients). For example, if there are four account holders

in a withholding rate pool that receive a $100 payment and

the NQI fails to allocate more than $10 of the payment,

you must file four Forms 1042-S, one for each account

holder in the pool, showing $25 of income to each. You

must also check box 15 (the pro-rata basis reporting) on

each Form 1042-S. However, if the NQI provides allocation information for 90% or more of the payment to a

Publication 515 (2026)

withholding rate pool, the pro-rata reporting method is not

required. Instead, you must file a Form 1042-S for each

account holder for whom you have allocation information

and report the unallocated part of the payment on a Form

1042-S issued to “unknown recipient.”

Withholding Foreign Partnerships (WPs)

If you are making payments to a WP for chapter 3 or 4 purposes, you do not have to withhold if the WP is acting in

that capacity. The WP must assume primary chapters 3

and 4 withholding responsibility for amounts that are distributed to, or included in the distributive share of, any direct partner and may assume chapters 3 and 4 withholding responsibilities for certain of its indirect partners. The

WP must withhold the amount required to be withheld. A

WP must provide you with a Form W-8IMY that certifies

that the WP is acting in that capacity and provides all

other information and certifications required by the form.

The Form W-8IMY must contain the WP-EIN and GIIN (if

applicable).

A WP can be either an FFI or an NFFE. An FFI (other

than a retirement fund) that is a WP must be a participating FFI, a registered deemed-compliant FFI, or an FFI

treated as a deemed-compliant FFI under an applicable

Model 1 IGA that is subject to similar due diligence and reporting requirements with respect to its U.S. accounts as

those applicable to a registered deemed-compliant FFI

under Regulations section 1.1471-5(f)(1) (including the requirement to register with the IRS) (defined in the WP

agreement as a “registered deemed-compliant Model 1

IGA FFI”). Thus, an FFI certifying its status as a WP must

provide you a Form W-8IMY that certifies to one of the

chapter 4 statuses referenced in the preceding sentence

when a chapter 4 status is required.

Responsibilities of the WP. The WP must withhold under chapter 3 or 4 on the date it makes a distribution of a

withholdable payment or an amount subject to chapter 3

withholding to a direct foreign partner based on the Form

W-8 or W-9 it receives from its partners. If the partner’s

distributive share has not been distributed, the WP must

withhold on the partner’s distributive share on the earlier

of the date that the partnership must mail or otherwise

provide to the partner a Schedule K-1 (Form 1065) or the

due date for furnishing the statement (whether or not the

WP is required to furnish the statement).

The WP may determine the amount of withholding

based on a reasonable estimate of the partner’s distributive share of income subject to withholding for the year.

The WP must correct the estimated withholding to reflect

the actual distributive share on the earlier of the dates

mentioned in the preceding paragraph. If that date is after

the earlier of the due date (including extensions) for filing

the WP’s Form 1042-S or the date the WP actually issues

Form 1042-S for the calendar year, the WP may withhold

and report any adjustments required by correcting the information for the following calendar year.

Form 1042 filing. The WP must file Form 1042 even if

no amount was withheld. In addition to the information that

Publication 515 (2026)

is required for the Form 1042, the WP must attach a statement showing the amounts of any overwithholding or underwithholding adjustments and an explanation of those

adjustments.

Form 1042-S reporting. The WP can elect to report

payments made to its foreign direct partners on a pooled

basis for chapter 3 purposes rather than reporting payments to each direct partner in addition to reporting payments in a chapter 4 withholding rate pool to the extent

the WP is permitted to do so based on its chapter 4 status.

A WP can treat as its direct partners those indirect partners of the WP for which it applies joint account treatment

or the agency option (described later). A WP must otherwise issue a Form 1042-S to each partner to the extent it

is required to do so under the WP agreement. You may issue a single Form 1042-S for all payments you make to a

WP other than payments for which the entity does not act

as a WP. You may, however, have Form 1099 requirements

for certain indirect partners of a WP that are U.S. nonexempt recipients.

Collective refund procedures. A WP may seek a refund of tax withheld under chapters 3 and 4 on behalf of

its partners when the WP has not issued a Form 1042-S to

the partners that received the payment that was subject to

overwithholding. The partners, therefore, are not required

to file claims for refund with the IRS to obtain refunds, but

rather may obtain them from the WP. A WP may obtain a

refund of tax withheld under chapter 4 to the extent permitted under the WP agreement.

Reporting of U.S. partners. A WP must report its

U.S. partners on Schedule K-1 to the extent required under the WP agreement. If the WP is an FFI, it is also required to report each of its U.S. accounts (or U.S. reportable accounts if a reporting Model 1 FFI) on Form 8966

consistent with its chapter 4 requirements or the requirements of an IGA. If the WP is an NFFE, the WP must file

Form 8966 to report any partner that is an NFFE (other

than an excepted NFFE) with one or more substantial U.S.

owners (or, under an applicable IGA, controlling persons

that are specified U.S. persons) if the NFFE is the beneficial owner of a withholdable payment received by the WP.

The WP must also file a Form 8966 to report withholdable

payments made to a pass-through partner for which the

WP acts under the WP agreement that provides information on an account holder (or interest holder) that is an

NFFE (other than an excepted NFFE) with one or more

substantial U.S. owners (or, under an applicable IGA, controlling persons that are specified U.S. persons) and that

is the beneficial owner of the withholdable payment received by the WP, unless the pass-through partner certifies to the WP that it is reporting on the account holder (or

interest holder) pursuant to its U.S. account reporting requirements. The preceding sentence applies with respect

to a pass-through partner to which the WP applies the

agency option or which has partners, beneficiaries, or

owners that are indirect partners of the WP.

Joint account treatment. Under special procedures

provided in the WP agreement, a WP may apply joint account treatment to a partnership or trust that is a direct

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partner of the WP. A WP that applies the joint account option must elect to perform pool reporting for amounts subject to chapter 3 withholding that either are not withholdable payments or are withholdable payments for which no

chapter 4 withholding is required and that the WP distributes to, or includes in the distributive share of, a foreign direct partner. These rules only apply to a partnership or

trust that meets the following conditions.

• It is a nonwithholding foreign partnership or nonwithholding foreign trust that is either a simple or grantor

trust.

• It is a certified deemed-compliant FFI (other than a

registered deemed-compliant Model 1 IGA FFI, as defined in the WP agreement), an owner-documented

FFI, an exempt beneficial owner, or an NFFE (other

than a WP or WT).

• It is a direct partner of the WP.

• None of its partners, beneficiaries, or owners is a

flow-through entity or intermediary.

• None of the partnership’s or trust’s partners, beneficiaries, or owners is a U.S. person or is subject to withholding or reporting under chapter 4.

• It agrees to make available upon request to the WP (or

the WP’s auditor) records that establish it has provided the WP with documentation for purposes of chapters 3 and 4 for all of its partners, beneficiaries, or

owners.

For more information on applying these rules, see section 9.01 of the WP agreement in section 6 of Revenue

Procedure 2017-21.

Agency option. A WP may apply the agency option to a

partnership or trust under which the partnership or trust

agrees to act as an agent of the WP and to apply the provisions of the WP agreement to its partners, beneficiaries,

or owners. A WP that applies the agency option must elect

to perform pool reporting for amounts subject to chapter 3

withholding that either are not withholdable payments or

are withholdable payments for which no chapter 4 withholding is required and that the WP distributes to, or includes in the distributive share of, a foreign direct partner.

A WP and a partnership or trust may only apply the

agency option if the partnership or trust meets the following conditions.

• It is a nonwithholding foreign partnership or nonwithholding foreign trust that is either a simple or grantor

trust.

• It is either a direct partner of the WP or an indirect

partner of the WP that is a direct partner, beneficiary,

or owner of a partnership or trust to which the WP also

applies the agency option.

• It is an FFI that is a certified deemed-compliant FFI

(other than a registered deemed-compliant Model 1

IGA FFI, as defined in the WP agreement), an

owner-documented FFI, an NFFE, or an exempt beneficial owner.

24

• None of its partners, beneficiaries, or owners is a WT,

WP, participating FFI, registered deemed-compliant

FFI, registered deemed-compliant Model 1 IGA FFI

(as defined in the WP agreement), or QI acting as an

intermediary for a payment made by the WP to the

partnership or trust.

• The WP may not act as a withholding foreign partner-

ship with respect to any direct or indirect partner of the

partnership or trust that is a U.S. nonexempt recipient,

unless the U.S. nonexempt recipient is a partner of an

owner-documented FFI or passive NFFE to which the

WP applies the agency option and is included in the

WP’s U.S. payee pool.

• It agrees to comply with the compliance procedures

described in section 8.05 of the WP agreement by

providing the WP with the certification described in

section 8.03 of the WP agreement and providing the

WP with documentation or other information for review.

• It agrees to comply with the documentation requirements of a WP in the WP agreement.

For more information on applying these rules, see section 9.02 of the WP agreement in section 6 of Revenue

Procedure 2017-21.

WP acting for indirect partners. A WP may act as a

WP with respect to an indirect partner of the WP that is not

a U.S. nonexempt recipient. However, a WP may act as a

WP for an indirect partner that is a U.S. nonexempt recipient if the indirect partner is included in a pass-through

partner’s chapter 4 withholding rate pool of recalcitrant account holders or U.S. payees. A WP acting as a WP for an

indirect partner is not required to forward to its withholding

agent the documentation and the withholding statement of

the pass-through partner and indirect partner that the WP

would have otherwise been required to provide under the

requirements of a nonwithholding foreign partnership. See

Not acting as a WP, later. However, a WP must provide

the withholding agent with documentation and any other

information from any pass-through partner whose direct or

indirect partner, beneficiary, or owner is a U.S. nonexempt

recipient unless the recipient is included in the

pass-through partner’s chapter 4 withholding rate pool of

recalcitrant account holders or U.S. payees.

If a WP is making a payment that is a withholdable payment, the pass-through partner’s withholding statement

must meet the requirements of Regulations section

1.1471-3(c)(3)(iii)(B). The pass-through partner’s withholding statement must include the account holders or interest holders of the pass-through partner in chapter 4

withholding rate pools (to the extent permitted), and, for

an amount subject to chapter 3 withholding that is not a

withholdable payment or is a withholdable payment for

which chapter 4 withholding is not required, valid documentation provided by the account holders or interest

holders of the pass-through partner that are not themselves QIs or flow-through entities.

For more information on applying these rules, see section 9.03 of the WP agreement in section 6 of Revenue

Procedure 2017-21.

Publication 515 (2026)

Not acting as a WP. A foreign partnership that is not acting as a WP is a nonwithholding foreign partnership. This

occurs if a WP is not acting in that capacity for some or all

of the amounts it receives from you.

You must treat payments made to a nonwithholding foreign partnership as made to the partners of the partnership. The partnership must provide you with a Form

W-8IMY (with Part VIII completed), a withholding statement identifying the amounts, the withholding certificates

or documentary evidence of the partners, and the information shown earlier under Withholding statement under

Nonqualified Intermediary (NQI).

Withholding Foreign Trusts (WTs)

If you are making payments to a WT for chapter 3 or 4 purposes, you do not have to withhold if the WT is acting in

that capacity. The WT must assume primary chapters 3

and 4 withholding responsibility for amounts that are distributed to, or included in the distributive share of, any direct beneficiary or owner and may assume primary chapters 3 and 4 withholding responsibility for certain of its

indirect beneficiaries or owners. The WT must withhold

the amount required to be withheld. A WT must provide

you with a Form W-8IMY that certifies that the WT is acting in that capacity and provides all other information and

certifications required by the form. The Form W-8IMY

must contain the WT-EIN and GIIN (if applicable).

A WT can be either an FFI or an NFFE. An FFI (other

than a retirement fund) that is a WT must be a participating FFI, a registered deemed-compliant FFI, or an FFI

treated as a deemed-compliant FFI under an applicable

Model 1 IGA that is subject to similar due diligence and reporting requirements with respect to its U.S. accounts as

those applicable to a registered deemed-compliant FFI

under Regulations section 1.1471-5(f)(1) (including the requirement to register with the IRS) (defined in the WT

agreement as a “registered deemed-compliant Model 1

IGA FFI”). Thus, you must identify the chapter 4 status of

an FFI certifying its status as a WT as one of the chapter 4

statuses referenced in the preceding sentence on a Form

W-8IMY when a chapter 4 status is required for chapter 4

purposes.

Responsibilities of a WT. The WT must withhold on the

date it makes a distribution of a withholdable payment or

an amount subject to chapter 3 withholding to a direct foreign beneficiary or owner. If the beneficiary’s or owner’s

distributive share has not been distributed, the WT must

withhold on the beneficiary’s or owner’s distributive share

on the earlier of the date that the trust must mail or otherwise provide to the beneficiary or owner the statement required under section 6048(b) or the due date for furnishing

the statement (whether or not the WT is required to furnish

the statement).

The WT may determine the amount of withholding

based on a reasonable estimate of the beneficiary’s or

owner’s distributive share of income subject to withholding

for the year. The WT must correct the estimated withholding to reflect the actual distributive share on the earlier of

the dates mentioned in the preceding paragraph. If that

Publication 515 (2026)

date is after the earlier of the due date (including extensions) for filing the WT’s Form 1042-S or the date the WT

actually issues Form 1042-S for the calendar year, the WT

may withhold and report any adjustments required by correcting the information for the following calendar year.

Form 1042 filing. The WT must file Form 1042 even if

no amount was withheld. In addition to the information that

is required for the Form 1042, the WT must attach a statement showing the amounts of any overwithholding or underwithholding adjustments and an explanation of those

adjustments.

Form 1042-S reporting. The WT can elect to report

payments made to its foreign direct beneficiaries or owners on a pooled basis for chapter 3 purposes rather than

reporting payments made to each foreign direct beneficiary or owner in addition to reporting payments in a chapter 4 withholding rate pool to the extent the WT is permitted to do so based on its chapter 4 status. A WT can treat

as its direct beneficiaries or owners those indirect beneficiaries or owners of the WT for which it applies joint account treatment or the agency option (described later). A

WT must otherwise issue a Form 1042-S to each beneficiary or owner to the extent it is required to do so under

the WT agreement. You may issue a single Form 1042-S

for all payments you make to a WT other than payments

for which the entity does not act as a WT. You may, however, have Form 1099 requirements for certain indirect

beneficiaries or owners of a WT that are U.S. nonexempt

recipients.

Collective refund procedures. A WT may seek a refund of tax withheld under chapters 3 and 4 on behalf of

its beneficiaries or owners when the WT has not issued a

Form 1042-S to the beneficiaries or owners that received

the payment that was subject to overwithholding. The beneficiaries or owners, therefore, are not required to file

claims for refund with the IRS to obtain refunds, but rather

may obtain them from the WT. A WT may obtain a refund

of tax withheld under chapter 4 to the extent permitted under the WT agreement.

Reporting of U.S. beneficiaries or owners. If the

WT is a grantor trust with U.S. owners, the WT is required

to file Form 3520-A, Annual Information Return of Foreign

Trust With a U.S. Owner, and to provide statements to a

U.S. owner, as well as each U.S. beneficiary who is not an

owner and receives a distribution. If the WT is an FFI, it is

required to report each of its U.S. accounts (or U.S. reportable accounts if a reporting Model 1 FFI) on Form 8966

consistent with its FATCA requirements or the requirements of an IGA. If the WT is an NFFE, the WT must file

Form 8966 to report any beneficiary or owner that is an

NFFE (other than an excepted NFFE) with one or more

substantial U.S. owners (or, under an applicable IGA, controlling persons that are specified U.S. persons) if the

NFFE is the beneficial owner of a withholdable payment

received by the WT.

The WT must also file a Form 8966 to report withholdable payments made to a pass-through beneficiary or

owner for which the WT acts under the WT agreement

that provides information on an account holder (or interest

25

holder) that is an NFFE (other than an excepted NFFE)

with one or more substantial U.S. owners (or, under an applicable IGA, controlling persons that are specified U.S.

persons) and that is the beneficial owner of the withholdable payment received by the WT, unless the pass-through

beneficiary or owner certifies to the WT that it is reporting

on the account holder (or interest holder) pursuant to its

U.S. account reporting requirements. The preceding sentence applies with respect to a pass-through beneficiary

or owner to which the WT applies the agency option or

which has partners, beneficiaries, or owners that are indirect beneficiaries or owners of the WT. In addition, if the

WT is not a participating FFI, a registered deemed-compliant FFI, or a registered deemed-compliant Model 1 IGA

FFI and is not required to report with respect to a U.S.

beneficiary of the WT on Form 3520-A, then the WT must

report with respect to such beneficiary on Form 8966, as

required in the WT agreement. A beneficiary for this purpose means a beneficiary that receives a distribution from

the WT during the year or that is required to include an

amount in gross income with respect to the WT under sections 652(a) or 662(a).

Joint account treatment. Under special procedures

provided in the WT agreement, a WT may apply joint account treatment to a partnership or trust that is a direct

beneficiary or owner of the WT. A WT that applies the joint

account option must elect to perform pool reporting for

amounts subject to chapter 3 withholding that either are

not withholdable payments or are withholdable payments

for which no chapter 4 withholding is required and that the

WT distributes to, or includes in the distributive share of, a

foreign direct beneficiary or owner. These rules only apply

to a partnership or trust that meets the following conditions.

• It is a nonwithholding foreign partnership or nonwithholding foreign trust that is either a simple or grantor

trust.

• It is a certified deemed-compliant FFI (other than a

registered deemed-compliant Model 1 IGA FFI, as defined in the WT agreement), an owner-documented

FFI, an exempt beneficial owner, or an NFFE (other

than a WP or WT).

• It is a direct beneficiary or owner of the WT.

• None of its partners, beneficiaries, or owners is a

flow-through entity or intermediary.

• None of the partnership’s or trust’s partners, beneficiaries, or owners is a U.S. person or is subject to withholding or reporting under chapter 4.

• It agrees to make available upon request to the WT (or

the WT’s auditor) records that establish it has provided the WT with documentation for purposes of chapters 3 and 4 for all of its partners, beneficiaries, or

owners.

For more information on applying these rules, see section 9.01 of the WT agreement found in section 7 of

Revenue Procedure 2017-21.

26

Agency option. A WT may apply the agency option to a

partnership or trust under which the partnership or trust

agrees to act as an agent of the WT and to apply the provisions of the WT agreement to its partners, beneficiaries,

or owners. A WT that applies the agency option must elect

to perform pool reporting for amounts subject to chapter 3

withholding that either are not withholdable payments or

are withholdable payments for which no chapter 4 withholding is required and that the WT distributes to, or includes in the distributive share of, a foreign direct beneficiary or owner. A WT and a partnership or trust may only

apply the agency option if the partnership or trust meets

the following conditions.

• It is a nonwithholding foreign partnership or nonwithholding foreign trust that is either a simple or grantor

trust.

• It is either a direct beneficiary or owner of the WT or

an indirect beneficiary or owner of the WT that is a direct partner, beneficiary, or owner of a partnership or

trust to which the WT also applies the agency option.

• It is an FFI that is a certified deemed-compliant FFI

(other than a registered deemed-compliant Model 1

IGA FFI, as defined in the WT agreement), an

owner-documented FFI, an NFFE, or an exempt beneficial owner.

• None of its partners, beneficiaries, or owners is a WT,

WP, participating FFI, registered deemed-compliant

FFI, registered deemed-compliant Model 1 IGA FFI

(as defined in the WT agreement), or a QI acting as an

intermediary for a payment made by the WT to the

partnership or trust.

• The WT may not act as a withholding foreign trust with

respect to any direct or indirect beneficiary or owner of

the partnership or trust that is a U.S. nonexempt recipient, unless the U.S. nonexempt recipient is a beneficiary or owner of an owner-documented FFI or passive NFFE to which the WT applies the agency option

and is included in the WT’s U.S. payee pool.

• It agrees to comply with the compliance procedures

described in section 8.05 of the WT agreement by

providing the WT with the certification described in

section 8.03 of the WT agreement and providing the

WT with documentation or other information for review.

• It agrees to comply with the documentation requirements of a WT in the WT agreement.

For more information on applying these rules, see section 9.02 of the WT agreement in section 7 of Revenue

Procedure 2017-21.

WT acting for indirect beneficiaries or owners. A WT

may act as a WT with respect to an indirect beneficiary or

owner of the WT that is not a U.S. nonexempt recipient.

However, a WT may act as a WT for an indirect beneficiary or owner that is a U.S. nonexempt recipient if the indirect beneficiary or owner is included in a pass-through

beneficiary’s or owner’s chapter 4 withholding rate pool of

recalcitrant account holders or U.S. payees. A WT acting

Publication 515 (2026)

as a WT for an indirect beneficiary or owner is not required

to forward to its withholding agent the documentation and

the withholding statement of the pass-through beneficiary

or owner and indirect beneficiary or owner that the WT

would have otherwise been required to provide under the

requirements of a nonwithholding foreign trust. See Not

acting as a WT, later. However, a WT must provide the

withholding agent with documentation and any other information from any pass-through beneficiary or owner whose

direct or indirect partner, beneficiary, or owner is a U.S.

nonexempt recipient unless the recipient is included in the

pass-through beneficiary’s or owner’s chapter 4 withholding rate pool of recalcitrant account holders or U.S. payees. If a WT is making a payment that is a withholdable

payment, the pass-through beneficiary’s or owner’s withholding statement must meet the requirements of Regulations section 1.1471-3(c)(3)(iii)(B). The pass-through beneficiary’s or owner’s withholding statement must include

the account holders or interest holders of the

pass-through beneficiary or owner in chapter 4 withholding rate pools (to the extent permitted), and, for an amount

subject to chapter 3 withholding that is not a withholdable

payment or is a withholdable payment for which chapter 4

withholding is not required, valid documentation provided

by the account holders or interest holders of the

pass-through beneficiary or owner that are not themselves

QIs or flow-through entities.

For more information on applying these rules, see section 9.03 of the WT agreement in section 7 of Revenue

Procedure 2017-21.

Not acting as a WT. A foreign trust that is not acting as

a WT is a nonwithholding foreign trust. This occurs if a WT

is not acting in that capacity for some or all of the amounts

it receives from you.

In most cases, you must treat payments made to a nonwithholding foreign trust as made to the beneficiaries of a

simple trust or the owners of a grantor trust. The trust must

provide you with a Form W-8IMY (with Part VIII completed), a withholding statement identifying the amounts, the

withholding certificates or documentary evidence of the

beneficiaries or owners, and the information shown earlier

under Withholding statement under Nonqualified Intermediary (NQI).

Standards of Knowledge for

Purposes of Chapter 3

You must withhold in accordance with the presumption

rules (discussed later) if you know or have reason to know

that a withholding certificate or documentary evidence

provided by a payee is unreliable or incorrect to establish

the payee’s status for chapter 3 purposes. If you rely on an

agent to obtain documentation, you are considered to

know, or have reason to know, the facts that are within the

knowledge of your agent for this purpose. If you receive

notification from the IRS that a payee’s claim of status for

chapter 3 purposes is incorrect or unreliable, you may not

rely upon the claim except to the extent indicated by the

IRS.

Publication 515 (2026)

Reason To Know

In general, you are considered to have reason to know

that a claim of U.S. status or of a reduced rate of withholding is incorrect if statements contained in the withholding

certificate or other documentation, or other relevant facts

of which you have knowledge, would cause a reasonably

prudent person in your position to question the claims

made.

For an obligation that is not a preexisting obligation

(that is, an obligation, including an account, held by an individual that is outstanding on June 30, 2014, or an obligation, including an account, held by an entity that is

opened, executed, or issued before January 1, 2015), you

have reason to know that an account holder’s chapter 3

claim is unreliable or incorrect if any information contained

in your account opening files or other account information

conflicts with the account holder’s claim. For an obligation

other than a preexisting obligation, you will not be considered to have reason to know that a person’s chapter 3

claim is unreliable or incorrect based on documentation

collected for anti-money laundering (AML) purposes until

30 days after the obligation is executed, or 30 days after

the account is opened for such person, whichever is applicable.

FIs, insurance companies, or brokers or dealers in securities have reason to know that documentation provided

by a direct account holder is unreliable or incorrect only in

the circumstances discussed next. If the documentation is

considered unreliable or incorrect, you must get new documentation to support the payee’s claimed status or may

rely on the original documentation if you receive the additional statements and/or documentation discussed later

and are a withholding agent described above with respect

to a direct account holder (defined in Regulations section

1.1441-7(b)(3)(i)). Such documentation is described in

Regulations section 1.1471-3(c)(5)(i).

The circumstances, discussed next, also apply to other

withholding agents. However, these withholding agents

are not limited to these circumstances in determining if

they have reason to know that documentation is unreliable

or incorrect. These withholding agents cannot base their

determination on the receipt of additional statements or

documents. They need to get new documentation.

Withholding Certificates

You have reason to know that a Form W-8 provided by a

direct account holder that is a foreign person is unreliable

or incorrect if:

• The Form W-8 is incomplete with respect to any item

on the form that is relevant to the claims made by the

account holder;

• The Form W-8 contains any information that is inconsistent with the account holder’s claim;

• The Form W-8 lacks information necessary to establish entitlement to a reduced rate of withholding, if a

reduced rate is claimed; or

27

• You have information not contained on the form that is

inconsistent with the claims made on the form.

The rules below apply to withholding agents that are

FIs, insurance companies, or brokers or dealers in securities.

Limits on reason to know for preexisting obligations.

With respect to a preexisting obligation (that is, an obligation, including an account, held by an individual that is outstanding on June 30, 2014, or an obligation, including an

account, held by an entity that is opened, executed, or issued before January 1, 2015), if you have documented the

foreign status of an account holder for purposes of chapter 3 or 61 prior to July 1, 2014, you may continue to rely

on that documentation. In addition, if you make a payment

to a new entity account holder that you treat as a preexisting entity account under Notice 2014-33, 2014-21 I.R.B.

1006,

available

at

IRS.gov/irb/

2014-21_IRB#NOT-2014-33, you may apply the standards

of knowledge in Regulations sections 1.1441-7(b)(5) and

(b)(8) that were applicable prior to the issuance of the

temporary regulations. See Notice 2014-59, 2014-44

I.R.B.

747,

available

at

IRS.gov/irb/

2014-44_IRB#NOT-2014-59.

However, if you review documentation for an individual

account holder claiming foreign status that contains a U.S.

place of birth or if you are notified of a change in circumstances, the obligation will be treated as having a change

in circumstances as of the date you review the documentation or receive the notification, and you will then have

reason to know that the documentation is unreliable or incorrect. However, if you are reviewing documentation provided by an entity before January 1, 2015, you will not be

required to treat the additional U.S. indicia added to Regulations section 1.1441-7(b) by the temporary regulations

as a change in circumstances. See Notice 2014-59 for

more information.

Establishment of foreign status by certain withholding agents. You have reason to know that a Form

W-8BEN or W-8BEN-E is unreliable or incorrect to establish a direct account holder’s status as a foreign person if:

1. The Form W-8 has a current permanent residence address in the United States,

2. The Form W-8 has a current mailing address in the

United States,

3. You have a current residence or current mailing address as part of your account information that is an

address in the United States,

4. The account holder notifies you of a new residence or

mailing address in the United States,

5. You have classified the account holder as a U.S. person in your account information, or

6. You have a current telephone number for the account

holder in the United States and no telephone number

for the account holder outside the United States (only

to the extent described in Regulations section

1.1441-7(b)(5)).

28

You may, however, rely on a Form W-8 as establishing

the account holder’s foreign status if any of the following

apply.

1. You receive the Form W-8BEN from an individual and:

a. You possess or obtain documentary evidence

(that does not contain a U.S. address) that supports the claim of foreign status, and the individual

provides you with a reasonable explanation, in

writing, supporting the claim of foreign status;

b. If you make a payment outside the United States

with respect to an offshore obligation and you possess or obtain documentary evidence establishing

foreign status that does not contain a U.S. address;

c. With respect to an offshore obligation, if you classify the individual as a resident of the country

where the obligation is maintained and you are required to report payments to the individual annually to the tax authority of the country where the

obligation is maintained and that country has a tax

treaty or information exchange agreement in effect

with the United States; or

d. You have classified the account holder as a U.S

person in your account information and you possess or obtain documentary evidence evidencing

citizenship in a country other than the United

States.

2. You receive the Form W-8BEN-E from an entity that is

not a flow-through entity and:

a. You have in your possession or obtain documentation establishing foreign status that substantiates

that the entity is organized or created under foreign law; or

b. With respect to an offshore obligation, if you classify the entity as a resident of the country where

the obligation is maintained and you are required

to report payments to the entity annually to the tax

authority of the country where the obligation is

maintained and that country has a tax treaty or information exchange agreement in effect with the

United States.

3. The account holder (whether an individual or an entity) has provided standing instructions to make payments with respect to an offshore obligation to an address in, or an account maintained in, the United

States, unless the account holder provides a reasonable explanation, in writing, that supports its foreign

status or provides documentary evidence supporting

its foreign status.

4. If an individual account holder provides a Form

W-8BEN to establish the individual’s foreign status,

and you have, either as an accompanying documentation or as part of your account information, an unambiguous indication of a place of birth for the individual

in the United States, you may not rely on the Form

W-8BEN unless you possess or obtain documentary

Publication 515 (2026)

evidence evidencing citizenship in a country other

than the United States, and either (i) a copy of the individual’s Certificate of Loss of Nationality of the United States, or (ii) a reasonable written explanation for

the individual’s renunciation of U.S. citizenship (or, under an applicable IGA, the reason the individual does

not have a Certificate of Loss of Nationality of the United States despite relinquishing its U.S. citizenship),

or the reason the individual did not obtain U.S. citizenship at birth.

Claim of reduced rate of withholding under treaty by

certain withholding agents. You have reason to know

that a Form W-8BEN or W-8BEN-E provided by a direct

account holder to claim a reduced rate of withholding under a treaty is unreliable or incorrect for purposes of establishing the account holder’s residency in a treaty country if:

• The permanent residence addres

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