Swiss Banking Association Publishes New Circulars Regarding W-8 Forms and Section 871(m)

Swiss Banking Association Publishes Factsheet for Limitation on Benefits Provisions on the Updated IRS Form W-8BEN-E

On 22 September 2017, the Swiss Banking Association (“SBA”) published a factsheet for the limitation on benefits (“LOB”) provisions included on the updated IRS Form W-8BEN-E according to the revised Qualified Intermediary Agreement (in force as of 1 January 2017). The factsheet will provide Financial Institutions (“FIs”) with generic and simplified definitions of the various LOB categories listed on the W-8BEN-E and Treaty Statements. While the factsheet does not constitute tax advice, FIs may use it as a guidance for their entity clients when they complete the LOB section of the W-8BEN-E or Treaty Statement. Furthermore, the factsheet covers the additional categories of the Swiss-U.S. income tax treaty.

The factsheet is available in German, French, Italian, and English. It can be found on the SBA’s website published as Circular 7936. Please refer to the link for the factsheet in PDF format.

Swiss Banking Association Publishes Circular Regarding the Classification of Dividend-Equivalent Payments According to Section 871(m)

On 26 September 2017, the Swiss Banking Association (“SBA”) published Circular 7937 in order to provide clarification regarding the classification of dividend-equivalent payments relating to Section 871(m). Under the Qualified Intermediary Agreement, FIs must withhold tax on US-source income to non-US recipients (withholding rates vary depending on which Double Tax Treaty rate applies), and this includes certain dividend-equivalent payments under Section 871(m).

The SBA had several discussions with the State Secretariat for International Financial Matters and the Swiss Federal Tax Administration (“FTA”), which resulted with the FTA releasing a ruling describing the classification of payments within the scope of 871(m). Based on this, the Circular covers the classification of dividend-equivalent payments according to Section 871(m) as applicable under the Switzerland-US Double Tax Treaty. Additionally, the Circular discusses how withholding on US-source income applies to this classification of dividend-equivalent payments.

Please refer to the link for access to the SBA’s Circular 7937.

Contact

Bruno Hollenstein
Partner, Operational Tax
+41 58 792 43 72
bruno.hollenstein@ch.pwc.com

Published by

Bruno Hollenstein

Bruno Hollenstein

Bruno Hollenstein
Partner, Operational Tax
Birchstrasse 160
8050 Zurich
+41 58 792 43 72

Bruno is a Tax Partner in the Financial Services Team in Zürich. He is specialised in the area of Operational Taxes and has several years of experience in advising clients from the financial services sector.
He is advising cantonal, regional, retail and private banks as well as fiduciary companies and family offices in Switzerland and Liechtenstein on FATCA, QI, OECD’s Common Reporting Standard (CRS), 871(m), and tax transparency topics.