Foreign Vendor Set-up Tax Documentation

In response to feedback received regarding the complexity of IRS form W-8BEN-E, the Corporate Accounts Payable Department, along with our colleagues in the Corporate Tax Department, have created a substitute W-8 form that can be used by Foreign Vendors under certain circumstances.

The IRS created form W-8BEN-E because of the Foreign Account Tax Compliance Act (often referred to as FATCA), which is aimed at addressing perceived tax abuse by U.S. persons through the use of offshore accounts. This act requires Duke to have procedures in place to categorize foreign payees and identify any payments that would be subject to withholding.  If a valid W-8 is not received, the Treasury Regulations indicate that we must withhold.

The new substitute W-8 (Checklist for Payment to Foreign Vendors) is available on the Corporate Accounts Payable website. This form is designed to determine if the payment is subject to U.S. tax withholding. Part 1 of the form is completed by the Duke Department and will determine if the payment is subject to U.S. tax withholding.  If the payment is not subject to U.S. tax withholding, part 2 of the form can be signed by the vendor.  The form will then serve as a substitute W-8. If the payment is subject to U.S. tax withholding, the vendor will need to complete the appropriate W-8 and claim a tax treaty to prevent or reduce the withholding of taxes. To help with this determination we have created a new GAP 200.137 along with a flowchart. These are also located on the Corporate Accounts Payable website.

We believe that this new form will streamline documentation for Duke Departments and foreign entities and clarify when and how to complete the W-8BEN-E.

If you have any questions please contact Corporate Accounts Payable at 919-684-3112 or email us at accountspayable at duke.edu