Department of the Treasury 2003 Internal Revenue Service

Instructions for Form 1042-S

Foreign Person’s U.S. Source Income Subject to Withholding

Section references are to the Internal Revenue Code unless otherwise noted.

required to be made on the payment. For follow the instructions under Magnetic General Instructions example, an individual making a payment Media/Electronic Reporting below.

of interest that qualifies for the portfolio Use the 2003 Form 1042-S only Extension of time to file. To request an interest exception from withholding is not extension of time to file Forms 1042-S, for income paid during 2003. Do required to report the payment if the file Form 8809, Request for Extension of CAUTION not use the 2003 Form 1042-S for

!

portfolio interest is paid on a loan that is Time To File Information Returns, with the income paid during 2002. not connected to the individual’s trade or address shown on that form. You should business. However, an individual paying A Change To Note request an extension as soon as you are an amount that has actually been subject aware that an extension is necessary, but We added Avoid Common Errors on to withholding (e.g., U.S. source alimony) no later than the due date for filing Form page 11. Please follow these new to a nonresident alien is required to report 1042-S. A request for an extension of instructions to ensure that your Forms the payment, whether or not the individual time to file Form 1042-S is not 1042-S can be correctly processed. actually withholds because the individual automatically approved. If your request is required to withhold on the payment. for an extension is approved, you will Purpose of Form See Multiple Withholding Agent Rule have an additional 30 days to file Form on page 10 for exceptions to reporting Use Form 1042-S to report income 1042-S. If you need more time, a second when another person has reported the described under Amounts Subject to Form 8809 may be submitted before the same payment to the recipient. Reporting on Form 1042-S on page 4 end of the initial extended due date. See

and to report amounts withheld under You must file a Form 1042-S even if Form 8809 and Pub. 1187, Specifications

Chapter 3 of the Internal Revenue Code. you did not withhold tax because the for Filing Form 1042-S, Foreign Person’s

Note: income was exempt from tax under a U.S. U.S. Source Income Subject to Every person required to deduct tax treaty or the Code, including the Withholding, Magnetically or and withhold any tax under Chapter 3 of exemption for income that is effectively Electronically, for more information. the Code is liable for such tax.

Copy A is filed with the Internal connected with the conduct of a trade or Note: If you are a magnetic

Revenue Service. Copies B, C, and D are business in the United States, or you media / electronic transmitter requesting released the tax withheld to the recipient. extensions of time to file for more than 50 for the recipient. Copy E is for your For exceptions, see Amounts That Are withholding agents or payers, you must records. Not Subject to Reporting on Form submit the extension requests Do not use Form 1042-S to report an 1042-S on page 4. magnetically or electronically. For item required to be reported on— Amounts paid to residents of U.S. instructions on submitting extension • Form W-2 (i.e., wages and other possessions and territories are not requests on magnetic media, see compensation made to employees (other subject to reporting on Form 1042-S if the Pub. 1187. than compensation for dependent beneficial owner of the income is a U.S. personal services for which the beneficial Magnetic Media/Electronic citizen, national, or resident alien. owner is claiming treaty benefits) Reporting including wages in the form of group-term Note: If you are required to file Form You must use magnetic media if you are 1042-S, you must also file Form 1042, life insurance), required to file 250 or more Forms • Form 1099, or Annual Withholding Tax Return for U.S. 1042-S. Acceptable forms of magnetic • Form 8288-A, Statement of Source Income of Foreign Persons. See media are magnetic tape, tape cartridge, Withholding on Dispositions by Foreign Form 1042 for more information. and 31

/2-inch diskettes. Persons of U.S. Real Property Interests,

or Form 8805, Foreign Partner’s Where, When, and How To Electronic submissions are filed using

the Filing Information Returns Information Statement of Section 1446

Withholding Tax. Withholding agents File Electronically (FIRE) System. The FIRE

otherwise required to report a distribution Forms 1042-S, whether filed on paper, on System operates 24 hours a day, 7 days

partly on a Form 8288-A or Form 8805 magnetic media, or electronically, must a week, and is accessed using your

and partly on a Form 1042-S may instead be filed with the Internal Revenue Service personal computer and modem at

by March 15, 2004. You are also required 304-262-2400 (not a toll-free number). report the entire amount on Form 8288-A For more information, see Pub. 1187. or Form 8805. to furnish Form 1042-S to the recipient of

the income on or before March 15, 2004. Note: Filing electronically will satisfy the

Who Must File Send any paper Forms 1042-S with magnetic media filing requirements. Any

Every withholding agent (defined on Form 1042-T, reference to magnetic media in these Annual Summary and instructions includes electronic filing. page 2) must file an information return on Transmittal of Forms 1042-S, to the

Form 1042-S to report amounts paid Internal Revenue Service Center, The magnetic media/electronic filing

during the preceding calendar year that Philadelphia, PA 19255-0607. You must requirement applies separately to

are described under Amounts Subject to use Form 1042-T to transmit paper Forms originals and corrections. Any person,

Reporting on Form 1042-S on page 4. 1042-S. Use a separate Form 1042-T to including a corporation, partnership,

However, withholding agents who are transmit each type of Form 1042-S. See individual, estate, and trust, that is

individuals are not required to report a Payments by U.S. Withholding Agents required to file 250 or more Forms 1042-S

payment on Form 1042-S if they are not on page 5 and the Form 1042-T must file such returns

making the payment as part of their trade instructions for more information. If you magnetically/electronically. The filing

or business and no withholding is have 250 or more Forms 1042-S to file, requirement applies individually to each

Cat. No. 64278A
reporting entity as defined by its separate foreign persons under Chapter 3 of the withhold. For example, if a payment is

taxpayer identification number (TIN). This Code. If you need such assistance, you made by a QI (whether or not it assumes

requirement applies separately to original may call 215-516-2000 (not a toll-free primary withholding responsibility) that

and corrected returns. For example, if you number) from 6:00 a.m. to 2:00 a.m. knows that withholding was not done by

have 300 original Forms 1042-S, they Eastern time or write to: Internal Revenue the person from which it received the

must be filed magnetically/electronically. Service, International Section, P.O. Box payment, that QI is required to do the

However, if 200 of those forms contained 920, Bensalem, PA 19020-8518. appropriate withholding. In addition,

erroneous information, the corrections withholding must be done by any QI that

may be filed on paper forms because the Record Retention assumes primary withholding

number of corrected Forms 1042-S is less Withholding agents should retain a copy responsibility under Chapter 3 of the

than the 250-or-more filing requirement. If of the information returns filed with the Code, a withholding foreign partnership, a

you are filing 250 or more Form 1042-S IRS, or have the ability to reconstruct the withholding foreign trust, a U.S. branch of

corrections, they must be filed data, for at least 3 years after the a foreign insurance company or foreign

magnetically/electronically. reporting due date. See Pub. 1187. bank that agrees to be treated as a U.S.

person, or an authorized foreign agent. If you file on magnetic media, do Substitute Forms Finally, if a payment is made by an NQI or not file the same returns on The official Form 1042-S is the standard a flow-through entity that knows, or has paper. Duplicate filing may cause for substitute forms. Because a substitute CAUTION

!

reason to know, that withholding was not penalty notices to be generated. form is a variation from the official form, done, that NQI or flow-through entity is Note: Even though as many as 249 you should know the requirements of the required to withhold since it also falls Forms 1042-S may be submitted on official form for the year of use before you within the definition of a withholding paper to the IRS, the IRS encourages modify it to meet your needs. The IRS agent. filers to transmit forms provides several means of obtaining the

magnetically / electronically. most frequently used tax forms. These Beneficial owner. For payments other

than those for which a reduced rate of include the Internet, fax-on-demand, Hardship waiver. To receive a hardship CD-ROM, and an electronic forms bulletin withholding is claimed under an income waiver from the required filing of Forms board. For details on the requirements of tax treaty, the beneficial owner of income 1042-S on magnetic media, submit Form substitute forms, see Pub. 1179, General is, generally, the person who is required 8508, Request for Waiver From Filing Rules and Specifications for Substitute under U.S. tax principles to include the Information Returns Magnetically. Waiver Forms 1096, 1098, 1099, 5498, W-2G income in gross income on a tax return. A requests should be filed at least 45 days person is not a beneficial owner of (and 1042-S). before the due date of the returns. See income, however, to the extent that Form 8508 for more information. Note: You are permitted to use substitute person is receiving the income as a payee copies of Form 1042-S (i.e., copies For additional information and nominee, agent, or custodian, or to the B, C, and D) that contain more than one instructions on filing Forms 1042-S on extent the person is a conduit whose income line for boxes 1 through 8. This magnetic media, extensions of time to file participation in a transaction is will reduce the number of Forms 1042-S (Form 8809), and hardship waivers (Form disregarded. In the case of amounts paid you send to the recipient. Under no 8508), see Pub. 1187. You may also call that do not constitute income, beneficial circumstances, however, may the copy the Martinsburg Computing Center ownership is determined as if the of the form filed with the IRS (copy A) Information Reporting Program at payment were income. contain more than one income line. 866-455-7438 (toll-free) or 304-263-8700 Foreign partnerships, foreign simple (not a toll-free number) Monday through Deposit Requirements trusts, and foreign grantor trusts are not Friday from 8:30 a.m. to 4:30 p.m. For information and rules concerning the beneficial owners of income paid to Eastern time. The Martinsburg Computing Federal tax deposits, see Depositing the partnership or trust. The beneficial Center Information Reporting Program Withheld Taxes in Pub. 515, or the Form owners of income paid to a foreign may also be reached by e-mail at 1042 instructions. partnership are generally the partners in mccirp@irs.gov or by fax at 304-264-5602 the partnership, provided that the partner (not a toll-free number). Definitions is not itself a partnership, foreign simple

Additional Information or grantor trust, nominee, or other agent. Withholding agent. A withholding agent The beneficial owner of income paid to a For more information on withholding of is any person, U.S. or foreign, that has foreign simple trust (i.e., a foreign trust tax, see Pub. 515, Withholding of Tax on control, receipt, or custody of an amount that is described in section 651(a)) is Nonresident Aliens and Foreign Entities. subject to withholding or who can generally the beneficiary of the trust, if the To order this publication and other disburse or make payments of an amount beneficiary is not a foreign partnership, publications and forms, call subject to withholding. The withholding foreign simple or grantor trust, nominee or 1-800-TAX-FORM (1-800-829-3676). You agent may be an individual, corporation, other agent. The beneficial owner of a can also download forms and publications partnership, trust, association, or any foreign grantor trust (i.e., a foreign trust to from the IRS Web Site at www.irs.gov. other entity. The term withholding agent the extent that all or a portion of the Need assistance? The IRS operates a also includes, but is not limited to, a income of the trust is treated as owned by centralized call site to answer questions qualified intermediary (QI), a nonqualified the grantor or another person under related to the filing of information returns intermediary (NQI), a withholding foreign sections 671 through 679) is the person on magnetic media. Among the topics partnership, a withholding foreign trust, a treated as the owner of the trust. The covered are Forms 1042-S, questionable flow-through entity, a U.S. branch of a beneficial owner of income paid to a Forms W-4, Forms 8027, and backup foreign insurance company or foreign foreign complex trust (i.e., a foreign trust withholding due to missing or incorrect bank that is treated as a U.S. person, and that is not a foreign simple trust or foreign TINs. For assistance, you may call an authorized foreign agent. A person grantor trust) is the trust itself. 866-455-7438 (toll-free) or 304-263-8700 may be a withholding agent even if there

(not a toll-free number) Monday through is no requirement to withhold from a The beneficial owner of income paid to

Friday from 8:30 a.m. to 4:30 p.m. payment or even if another person has a foreign estate is the estate itself.

Eastern time, or fax 304-264-5602 (not a already withheld the required amount Note: A payment to a U.S. partnership, toll-free number). You may also reach the from a payment. U.S. trust, or U.S. estate is treated as a call site via e-mail at mccirp@irs.gov. Note: Generally, the U.S. person who payment to a U.S. payee that is not

Note: This call site does not answer tax pays (or causes to be paid) the item of subject to 30% foreign-person

law questions concerning the U.S. source income to a foreign person withholding. A U.S. partnership, trust, or

requirements for withholding of tax on (or to its agent) must withhold. However, estate should provide the withholding

payments of U.S. source income to other persons may be required to agent with a Form W-9, Request for

-2-
Taxpayer Identification Number and Internal Revenue Bulletin 2000-4 at Note: A U.S. branch that is treated as a

Certification. www.irs.gov/pub/irs-irbs/irb00-04.pdf. U.S. person is treated as such solely for

purposes of determining whether a Foreign person. A foreign person Withholding foreign partnership or payment is subject to withholding. The includes a nonresident alien individual, a withholding foreign trust. A withholding branch is, for purposes of information foreign corporation, a foreign partnership, foreign partnership or trust is a foreign reporting, a foreign person and payments a foreign trust, a foreign estate, and any partnership or trust that has entered into a to such a branch must be reported on other person that is not a U.S. person. withholding agreement with the IRS in Form 1042-S. The term also includes a foreign branch which it agrees to assume primary or office of a U.S. financial institution or withholding responsibility for all payments Recipient. A recipient is any of the

U.S. clearing organization if the foreign following: that are made to it for its partners, branch is a QI. Generally, a payment to a beneficiaries, or owners. • A beneficial owner of income.

U.S. branch of a foreign person is a • A QI.

payment to a foreign person. Authorized foreign agent. An agent is • A withholding foreign partnership or an authorized foreign agent only if all withholding foreign trust. Nonresident alien individual. Any four of the following apply. • An authorized foreign agent. individual who is not a citizen or resident 1. There is a written agreement • A U.S. branch of certain foreign banks of the United States is a nonresident alien between the withholding agent and the or insurance companies that is treated as individual. An alien individual meeting foreign person acting as agent. a U.S. person. either the “green card test” or the 2. The IRS International Section has • A foreign partnership or a foreign trust “substantial presence test” for the been notified of the appointment of the (other than a withholding foreign calendar year is a resident alien. Any agent before the first payment for which partnership or withholding foreign trust), person not meeting either test is a the authorized agent acts on behalf of the but only to the extent the income is nonresident alien individual. Additionally, withholding agent. (This notification must effectively connected with its conduct of a an alien individual who is a resident of a be sent to the following address: Internal trade or business in the United States. foreign country under the residence Revenue Service, International Section, • A payee who is not known to be the article of an income tax treaty, or an alien P.O. Box 920, Bensalem, PA beneficial owner, but who is presumed to individual who is a resident of Puerto 19020-8518.) be a foreign person under the Rico, Guam, the Commonwealth of the 3. The books and records and presumption rules. Northern Mariana Islands, the U.S. Virgin relevant personnel of the foreign agent • A PAI. Islands, or American Samoa, is a are available to the IRS so that the IRS A recipient does not include any of the nonresident alien individual. See Pub. may evaluate the withholding agent’s following: 519, U.S. Tax Guide for Aliens, for more compliance with its withholding and • An NQI. information on resident and nonresident reporting obligations. • A nonwithholding foreign partnership, if alien status. 4. The U.S. withholding agent remains the income is not effectively connected

Note: Even though a nonresident alien fully liable for the acts of its agent and with its conduct of a trade or business in

individual married to a U.S. citizen or does not assert any of the defenses that the United States.

resident alien may choose to be treated may otherwise be available. • A disregarded entity.

as a resident alien for certain purposes • A foreign trust that is described in For further details, see Regulations (e.g., filing a joint income tax return), such section 651(a) (a foreign simple trust) if section 1.1441-7(c)(2). individual is still treated as a nonresident the income is not effectively connected

alien for withholding tax purposes on all Payer. A payer is the person for whom with the conduct of a trade or business in

income except wages. the withholding agent acts as a paying the United States.

Withholding certificate. agent pursuant to an agreement whereby • A foreign trust to the extent that all or a The term

the withholding agent agrees to withhold portion of the trust is treated as owned by “withholding certificate” generally refers to and report a payment. the grantor or other person under Form W-8 or Form W-9. sections 671 through 679 (a foreign Note: Throughout these instructions, a Presumption rules. The presumption grantor trust). rules are those rules prescribed under reference to or mention of “Form W-8” is • A U.S. branch that is not treated as a Chapter 3 and Chapter 61 of the Code a reference to Forms W-8BEN, W-8ECI, U.S. person unless the income is, or is W-8EXP, and/or W-8IMY. that a withholding agent must follow to treated as, effectively connected with the determine the status of a beneficial owner Intermediary. An intermediary is a conduct of a trade or business in the (e.g., as a U.S. person or a foreign person that acts as a custodian, broker, United States. person) when it cannot reliably associate nominee, or otherwise as an agent for a payment with valid documentation. See, Flow-through entity. A flow-through another person, regardless of whether for example, Regulations sections entity is a foreign partnership (other than that other person is the beneficial owner 1.1441-1(b)(3), 1.1441-4(a), 1.1441-5(d) a withholding foreign partnership), a of the amount paid, a flow-through entity, and (e), 1.1441-9(b)(3), and 1.6049-5(d). foreign simple or grantor trust (other than or another intermediary. Also see Pub. 515. a withholding foreign trust), or, for any

Qualified intermediary (QI). A QI is payments for which a reduced rate of U.S. branch treated as a U.S. person. withholding under an income tax treaty is an intermediary that is a party to a The following types of U.S. branches (of withholding agreement with the IRS. An claimed, any entity to the extent the entity foreign entities) may reach an agreement is considered to be fiscally transparent entity must indicate its status as a QI on a with the withholding agent to treat the under section 894 with respect to the Form W-8IMY submitted to a withholding branch as a U.S. person: (a) a U.S. payment by an interest holder’s agent. branch of a foreign bank subject to jurisdiction. Nonqualified intermediary (NQI). An regulatory supervision by the Federal Fiscally transparent entity. An entity is NQI is any intermediary that is not a U.S. Reserve Board or (b) a U.S. branch of a treated as fiscally transparent with person and that is not a QI. foreign insurance company required to file respect to an item of income for which an annual statement on a form approved Private arrangement intermediary treaty benefits are claimed to the extent by the National Association of Insurance (PAI). A QI may enter into a private that the interest holders in the entity must, Commissioners with the Insurance arrangement with another intermediary on a current basis, take into account Department of a State, Territory, or the under which the other intermediary separately their shares of an item of District of Columbia. generally agrees to perform all of the income paid to the entity, whether or not

obligations of the QI. See Section 4 of The U.S. branch must provide a Form distributed, and must determine the

Rev. Proc. 2000-12 for details. You can W-8IMY evidencing the agreement with character of the items of income as if they

find Rev. Proc. 2000-12 on page 387 of the withholding agent. were realized directly from the sources

-3-
from which realized by the entity. For • Cancellation of indebtedness. • Certain dispositions described under

example, partnerships, common trust Income from the cancellation of Publicly Traded Partnerships (Section

funds, and simple trusts or grantor trusts indebtedness must be reported unless the 1446 Withholding Tax) on page 5.

are generally considered to be fiscally withholding agent is unrelated to the For more details on the types of

transparent with respect to items of debtor and does not have knowledge of income that are subject to withholding,

income received by them. the facts that give rise to the payment. see Pub. 515.

Disregarded entity. A business entity • Effectively connected income (ECI).

that has a single owner and is not a ECI includes amounts that are (or are Amounts That Are Not

corporation under Regulations section presumed to be) effectively connected

301.7701-2(b) is disregarded as an entity with the conduct of a trade or business in Subject to Reporting on

separate from its owner. the United States even if no withholding Form 1042-S

Exempt recipient. Generally, an exempt certificate is required, as, for example, 1. Interest on deposits. Generally, with income on notional principal recipient is any payee that is not required no withholding (or reporting) is required to provide Form W-9 and is exempt from contracts. Note that bank deposit interest, on interest paid to foreign persons on the Form 1099 reporting requirements. which generally is not subject to Form deposits if such interest is not effectively See the Instructions for the Requester 1042-S reporting, is subject to Form connected with the conduct of a trade or of Form W-9 for a list of exempt 1042-S reporting if it is effectively business in the United States. For this recipients. connected income. purpose, the term “deposits” means

Non-exempt recipient. A non-exempt • Notional principal contract income. amounts that are on deposit with a U.S.

recipient is any person who is not an Income from notional principal contracts bank, savings and loan association, credit

exempt recipient. that the payor knows, or must presume, is union, or similar institution, and from effectively connected with the conduct of certain deposits with an insurance

Amounts Subject to a U.S. trade or business is subject to company.

reporting. The amount to be reported is Reporting on Form 1042-S Exception for interest payments to the amount of cash paid on the contract Canadian residents who are not U.S. Amounts subject to reporting on Form during the calendar year. Any amount of citizens. If you pay $10 or more of U.S. 1042-S are amounts paid to foreign interest determined under the provisions source bank deposit interest to a persons (including persons presumed to of Regulations section 1.446-3(g)(4) nonresident alien who is a resident of be foreign) that are subject to withholding, (dealing with interest in the case of a Canada, you generally must report the even if no amount is deducted and significant non-periodic payment) is interest on Form 1042-S. This reporting withheld from the payment because of a reportable as interest and not as notional requirement applies to interest on a treaty or Code exception to taxation or if principal contract income. deposit maintained at a bank’s office in any amount withheld was repaid to the • Students, teachers, and researchers. the United States. However, it does not payee. Amounts subject to withholding Amounts paid to foreign students, include interest on certain bearer are amounts from sources within the trainees, teachers, or researchers as certificates of deposit if paid outside the United States that constitute (a) fixed or scholarship or fellowship income, and United States. Although you only have to determinable annual or periodical (FDAP) compensation for personal services report payments you make to residents of income; (b) certain gains from the (whether or not exempt from tax under an Canada, you can comply by reporting disposal of timber, coal, or domestic iron income tax treaty), must be reported. bank deposit interest to all foreign ore with a retained economic interest; and However, amounts that are exempt from persons if that is easier. (c) gains relating to contingent payments tax under section 117 are not subject to When completing Form 1042-S, use received from the sale or exchange of reporting. income code 29 in box 1 and exemption patents, copyrights, and similar intangible code 02 in box 6. property. Amounts subject to reporting • Amounts paid to foreign

include, but are not limited to, the governments, foreign controlled banks On the statements furnished to the

following U.S. source items. of issue, and international Canadian recipients, you must include

• Corporate distributions. The entire organizations. These amounts are an information contact phone number in

amount of a corporate distribution subject to reporting even if they are addition to the name and address in

(whether actual or deemed) must be exempt under section 892 or 895. box 10 on Form 1042-S. You must also

reported, irrespective of any estimate of include a statement that the information • Foreign targeted registered the portion of the distribution that on the form is being furnished to the obligations. Interest paid on registered represents a taxable dividend. Any United States Internal Revenue Service obligations targeted to foreign markets distribution, however, that is treated as and may be provided to the government paid to a foreign person other than a gain from the redemption of stock is not of Canada. financial institution or a member of a

an amount subject to reporting. clearing organization is an amount 2. Interest and OID from short-term

• Interest. This includes the portion of a obligations. Interest and OID from any subject to reporting. notional principal contract payment that is obligation payable 183 days or less from

characterized as interest. • Original issue discount (OID) from the date of original issue should not be the redemption of an OID obligation. • Rents. reported on Form 1042-S. The amount subject to reporting is the • Royalties. 3. Registered obligations targeted amount of OID actually includible in the • Compensation for independent to foreign markets. Interest on a gross income of the foreign beneficial personal services performed in the registered obligation that is targeted to owner of the income, if known. Otherwise, United States. foreign markets and qualifies as portfolio the withholding agent should report the • Compensation for dependent interest is not subject to reporting if it is entire amount of OID as if the recipient personal services performed in the paid to a registered owner that is a held the instrument from the date of United States for which the beneficial financial institution or member of a

original issuance. To determine the owner is claiming treaty benefits. clearing organization and you have

• Annuities. amount of OID reportable, a withholding received the required certifications.

• Pension distributions and other agent may rely on Pub. 1212, List of 4. Bearer obligations targeted to Original Issue Discount Instruments. deferred income. foreign markets. Do not file Form

• Most gambling winnings. However, • Certain dispositions described under 1042-S to report interest not subject to

proceeds from a wager placed in Withholding on Dispositions of U.S. withholding on bearer obligations if a

blackjack, baccarat, craps, roulette, or Real Property Interests by Publicly Form W-8 is not required.

big-6 wheel are not amounts subject to Traded Trusts and Real Estate 5. Notional principal contract

reporting. Investment Trusts (REITs) on page 5. payments that are not ECI. Amounts

-4-
paid on a notional principal contract that shifted to the person who pays the Withholding Tax (Section 1446), and

are not effectively connected with the distribution to a foreign person (or to the Form 8805, Foreign Partner’s Information

conduct of a trade or business in the account of the foreign person) if the Statement of Section 1446 Withholding

United States should not be reported on special notice requirement of Regulations Tax.

Form 1042-S. section 1.1445-8(f) and other

6. Accrued interest and OID. requirements of Regulations section Payments by U.S. Interest paid on obligations sold between 1.1445-8(b)(1) are satisfied.

interest payment dates and the portion of Withholding Agents The amount subject to withholding for the purchase price of an OID obligation a distribution by a publicly traded trust is In general. U.S. withholding agents that is sold or exchanged in a transaction determined under the large trust rules of making payments described under other than a redemption is not subject to Regulations section 1.1445-5(c)(3). Amounts Subject to Reporting on reporting unless the sale or exchange is Form 1042-S on page 4 must file a The amount subject to withholding for part of a plan, the principal purpose of separate Form 1042-S for each recipient a distribution by a REIT generally is the which is to avoid tax, and the withholding who receives the income. Furthermore, amount of each share or beneficial agent has actual knowledge or reason to withholding agents filing paper Forms interest designated by the REIT as a know of such plan. 1042-S are not permitted to use multiple capital gains dividend, multiplied by the income lines on Copy A filed with the IRS. Exception for Amounts Previously number of shares or certificates of These filers must use a separate Form Withheld Upon. A withholding agent beneficial interests owned by a foreign 1042-S for information reportable on a person. If the withholding liability is shifted should report on Form 1042-S any single income line. to the payer of the distribution under amounts, whether or not subject to

withholding, that are paid to a foreign Regulations section 1.1445-8(b), the These filers cannot use a single

payee and that have been withheld upon, payer will receive notice as described in Form 1042-S to report income if

including backup withholding, by another Regulations section 1.1445-8(f) of the CAUTION that income is reportable under

!

withholding agent under the presumption amount of the distribution subject to different income, recipient, or exemption

rules. withholding. codes or is subject to different rates of

The rate of withholding is as follows: withholding. Example. A withholding agent (WA)

makes a payment of bank deposit interest 1. Distribution by a publicly traded A withholding agent may be permitted

to a foreign intermediary that is a trust that makes recurring sales of to use substitute payee copies of Form

nonqualified intermediary (NQI-B). NQI-B growing crops and timber – 10%. 1042-S (i.e., copies B, C, and D) that

2. Distribution by a publicly traded contain more than one income line (i.e., failed to provide any information

regarding the beneficial owners to whom trust not described in 1 above – 35%. boxes 1 through 8). See Substitute

3. Distribution by a REIT – 35%. Forms on page 2 for details. the payment was attributable. Under the

presumption rules, WA must presume To determine whether an interest See Payments Made to Persons that the amounts are paid to a U.S. holder is a foreign person, see Who Are Not Recipients on page 7 if the non-exempt recipient. WA withholds 30% Regulations section 1.1445-8(e). payment is made to a foreign person that of the payment under the backup is not a recipient. Use Forms 1042-S and 1042 to report withholding provisions of the Code and

files a Form 1099-INT reporting the and pay over the withheld amounts. All Payments to Recipients other withholding required under section interest as paid to an unknown recipient. 1. Payments directly to beneficial 1445 is reported and paid over using A copy of Form 1099-INT is sent to owners. If a U.S. withholding agent is Form 8288, U.S. Withholding Tax Return NQI-B. The beneficial owners of the bank making a payment directly to a beneficial for Dispositions by Foreign Persons of deposit interest are two customers of owner, it must complete Form 1042-S NQI-B, X and Y. Both X and Y have U.S. Real Property Interests, and Form treating the beneficial owner as the 8288-A, Statement of Withholding on provided NQI-B with documentary recipient. Boxes 17 through 20 should be Dispositions by Foreign Persons of U.S. evidence establishing that they are left blank. A U.S. withholding agent Real Property Interests. foreign persons and therefore not subject should complete box 21 only if it is to backup withholding. NQI-B must file a completing Form 1042-S as a paying Form 1042-S reporting the amount of Publicly Traded agent acting pursuant to an agreement. bank deposit interest paid to each of X Partnerships (Section 1446 Under a grace period rule, a U.S. and Y and the proportionate amount of Withholding Tax) withholding agent may, under certain withholding that occurred. circumstances, treat a payee as a foreign A “publicly traded partnership” is any person while the withholding agent waits Withholding on partnership in which interests are for a valid withholding certificate. A U.S. regularly traded on an established Dispositions of U.S. Real withholding agent who relies on the grace securities market (regardless of the period rule to treat a payee as a foreign Property Interests by number of its partners). However, it does person must file Form 1042-S to report all not include a publicly traded partnership Publicly Traded Trusts and payments during the period that person treated as a corporation under the was presumed to be foreign even if that general rule of section 7704(a). Real Estate Investment person is later determined to be a U.S.

A publicly traded partnership that has person based on appropriate Trusts (REITs) effectively connected income, gain, or documentation or is presumed to be a Regulations section 1.1445-8 provides loss must pay a withholding tax on U.S. person after the grace period ends. rules for withholding required on the distributions of that income made to its In the case of foreign joint owners, you disposition of a U.S. real property interest foreign partners and file Form 1042-S, may provide a single Form 1042-S made by a publicly traded trust or a REIT. The unless an election is made to pay a out to the owner whose status you relied special rules of Regulations section withholding tax based on effectively upon to determine the applicable rate of 1.1445-8 only apply to distributions by a connected taxable income allocable to its withholding (i.e., the owner subject to the publicly traded trust or a REIT. foreign partners. See Pub. 515 for details. highest rate of withholding). If, however,

In general, when a publicly traded trust A nonpublicly traded partnership that any one of the owners requests its own

or a REIT makes a distribution to a has effectively connected gross income Form 1042-S, you must furnish a Form

foreign person attributable to the allocable to foreign partners must pay a 1042-S to the person who requests it. If

disposition of a U.S. real property interest, withholding tax under section 1446. more than one Form 1042-S is issued for

it must withhold tax under section 1445. These amounts are reported on Form a single payment, the aggregate amount

However, this withholding liability is 8804, Annual Return for Partnership paid and tax withheld that is reported on

-5-
all Forms 1042-S cannot exceed the total Form W-8IMY that evidences its Payments allocated, or presumed

amounts paid to joint owners and the tax made, to U.S. non-exempt recipients. agreement with the withholding agent to

withheld on those payments. You may be given Forms W-9 or other be treated as a U.S. person, the U.S.

2. Payments to a qualified information regarding U.S. non-exempt withholding agent treats the U.S. branch

recipients from a QI together with as the recipient. intermediary, withholding foreign

partnership, or withholding foreign information allocating all or a portion of • If a withholding agent makes a

trust. A U.S. withholding agent that the payment to U.S. non-exempt payment to a U.S. branch that has

makes payments to a QI (whether or not recipients. You must report income provided a Form W-8IMY to transmit

allocable to a U.S. non-exempt recipient information regarding recipients, the U.S. the QI assumes primary withholding

responsibility), a withholding foreign on the appropriate Form 1099 and not on withholding agent must complete a

partnership, or a withholding foreign trust Form 1042-S, even though you are separate Form 1042-S for each recipient

should generally complete Forms 1042-S paying that income to a QI. whose documentation is associated with

treating the QI, withholding foreign the U.S. branch’s Form W-8IMY. If a You may also be required under the partnership, or withholding foreign trust as payment cannot be reliably associated presumption rules to treat a payment with recipient documentation, the U.S. the recipient. However, see Payments made to a QI as made to a payee that is a

allocated, or presumed made, to U.S. U.S. non-exempt recipient from which you withholding agent must complete Form

non-exempt recipients below for must withhold 30% of the payment under 1042-S in accordance with the

presumption rules. exceptions. The U.S. withholding agent the backup withholding provisions of the

must complete a separate Form 1042-S Code. In this case, you must report the • If a withholding agent cannot reliably

for each withholding rate pool of the QI, associate a payment with a Form W-8IMY payment on the appropriate Form 1099.

withholding foreign partnership, or from a U.S. branch, the payment must be See the General Instructions for Forms

withholding foreign trust. For this purpose, reported on a single Form 1042-S treating 1099, 1098, 5498, and W-2G. the U.S. branch as the recipient and a withholding rate pool is a payment of a Example 1. WA, a U.S. withholding reporting the income as effectively single type of income, determined in agent, makes a payment of U.S. source connected income. accordance with the income codes used dividends to QI, a qualified intermediary. to file Form 1042-S, that is subject to a QI provides WA with a valid Form Note: The rules above apply only to U.S. single rate of withholding. A QI that does W-8IMY with which it associates a branches treated as U.S. persons not assume primary withholding withholding statement that allocates 95% (defined on page 3). In all other cases, responsibility provides information of the payment to a 15% withholding rate payments to a U.S. branch of a foreign regarding the proportions of income pool and 5% of the payment to C, a U.S. person are treated as payments to the subject to a particular withholding rate to individual. QI provides WA with C’s Form foreign person. the withholding agent on a withholding W-9. WA must complete a Form 1042-S, 4. Amounts paid to authorized statement associated with Form W-8IMY. showing QI as the recipient in box 13 and foreign agents. If a withholding agent A U.S. withholding agent making a recipient code 12 (qualified intermediary) makes a payment to an authorized payment to a QI, withholding foreign in box 12, for the dividends allocated to foreign agent, the withholding agent files partnership, or withholding foreign trust the 15% withholding rate pool. WA must Forms 1042-S for each type of income must use recipient code 12 (qualified also complete a Form 1099-DIV reporting (determined by reference to the income intermediary) or 04 (withholding foreign the portion of the dividend allocated to C. codes used to complete Form 1042-S) partnership or withholding foreign trust). A Example 2. WA, a withholding agent, treating the authorized foreign agent as U.S. withholding agent must not use makes a payment of U.S. source the recipient, provided that the authorized recipient code 13 (private arrangement dividends to QI, a qualified intermediary. foreign agent reports the payments on intermediary withholding rate QI provides WA with a valid Form Forms 1042-S to each recipient to which pool–general), 14 (private arrangement W-8IMY with which it associates a it makes payments. If the authorized intermediary withholding rate withholding statement that allocates 40% foreign agent fails to report the amounts pool–exempt organizations), 15 (qualified of the payment to a 15% withholding rate paid on Forms 1042-S for each recipient, intermediary withholding rate pool and 40% to a 30% withholding rate the U.S. withholding agent remains pool–general), or 16 (qualified pool. QI does not provide any withholding responsible for such reporting. intermediary withholding rate rate pool information regarding the Use recipient code 17 in box 12 if you pool–exempt organizations). Use of an remaining 20% of the payment. WA must make a payment to an authorized foreign inappropriate recipient code may cause a apply the presumption rules to the portion agent. notice to be generated. of the payment (20%) that has not been 5. Amounts paid to an estate or

Note: A QI, withholding foreign allocated. Under the presumption rules, complex trust. If a U.S. withholding

partnership, or withholding foreign trust is that portion of the payment is treated as agent makes a payment to a foreign

required to act in such capacity only for paid to an unknown foreign payee. WA complex trust or a foreign estate, a Form

designated accounts. Therefore, such an must complete three Forms 1042-S: one 1042-S must be completed showing the

entity may also provide a Form W-8IMY in for dividends subject to 15% withholding, complex trust or estate as the recipient.

which it certifies that it is acting as an NQI showing QI as the recipient in box 13 and Use recipient code 05 (trust) or 10

or flow-through entity for other accounts. recipient code 12 (qualified intermediary) (estate). See Payments Made to

A U.S. withholding agent that receives a in box 12; one for dividends subject to Persons Who Are Not Recipients on

Form W-8IMY on which the foreign 30% withholding, showing QI as the page 7 for the treatment of payments

person providing the form indicates that it recipient in box 13 and recipient code 12 made to foreign simple trusts and foreign

is not acting as a QI, withholding foreign (qualified intermediary) in box 12; and grantor trusts.

partnership, or withholding foreign trust one for dividends subject to 30% 6. Dual claims. A withholding agent

may not treat the foreign person as a withholding, showing QI as the recipient may make a payment to a foreign entity

recipient. A withholding agent must not in box 13 and recipient code 20 (unknown (e.g., a hybrid entity) that is

use the EIN that a QI, withholding foreign recipient) in box 12. simultaneously claiming a reduced rate of

partnership, or withholding foreign trust 3. Amounts paid to certain U.S. tax on its own behalf for a portion of the

provides in its capacity as such to report branches. A U.S. withholding agent payment and a reduced rate on behalf of

payments that are treated as made to an making a payment to a “U.S. branch persons in their capacity as interest

entity in its capacity as an NQI or treated as a U.S. person” (defined on holders in that entity on the remaining

flow-through entity. In that case, use the page 3) completes Form 1042-S as portion. If the claims are consistent and

EIN, if any, that is provided by the entity follows: the withholding agent has accepted the

on its Form W-8IMY in which it claims that • If a withholding agent makes a multiple claims, a separate Form 1042-S

it is acting as an NQI or flow-through payment to a U.S. branch that has must be filed for the entity for those

entity. provided the withholding agent with a payments for which the entity is treated

-6-
as claiming a reduced rate of withholding the recipient directly receives the states that QI has two withholding rate

and separate Forms 1042-S must be filed payment. A copy of the Form 1042-S pools: one for interest described by

for each of the interest holders for those need not be provided to the NQI or income code 01 (interest paid by U.S.

payments for which the interest holders flow-through entity unless the withholding obligors–general) and one for dividends

are claiming a reduced rate of agent must report the payment to an described by income code 06 (dividends

withholding. If the claims are consistent unknown recipient. See Example 4 on paid by U.S. corporations–general). NQI

but the withholding agent has not chosen page 8. provides WA, a U.S. withholding agent,

to accept the multiple claims, or if the with its own Form W-8IMY, with which it If a U.S. withholding agent makes claims are inconsistent, a separate Form payments to an NQI or flow-through entity associates the Forms W-8BEN of A and B

1042-S must be filed for the person(s) and cannot reliably associate the and the Form W-8IMY of QI. In addition,

being treated as the recipient(s). payment, or any portion of the payment, NQI provides WA with a complete 7. Special instructions for U.S. with a valid withholding certificate (Forms withholding statement that allocates the trusts and estates. Report the entire W-8 or W-9) or other valid appropriate payments of interest and dividends WA amount of income subject to reporting, documentation from a recipient (either makes to NQI among A, B, and QI. All of irrespective of estimates of distributable because a recipient withholding certificate the interest and dividends paid by WA to net income. has not been provided or because the NQI is described by income code 01

NQI or flow-through entity has failed to (interest paid by U.S. obligors–general)

Payments Made to Persons provide the information required on a and income code 06 (dividends paid by

Who Are Not Recipients withholding statement), the withholding U.S. corporations–general). WA must file

agent must follow the appropriate a total of six Forms 1042-S: two Forms 1. Disregarded entities. If a U.S. presumption rules for that payment. If, 1042-S (one for interest and one for withholding agent makes a payment to a under the presumption rules, an unknown dividends) showing A as the recipient, two disregarded entity but receives a valid recipient of the income is presumed to be Forms 1042-S (one for interest and one Form W-8BEN or W-8ECI from a foreign foreign, the withholding agent must for dividends) showing B as the recipient, person that is the single owner of the withhold 30% of the payment and report and two Forms 1042-S (one for interest disregarded entity, the withholding agent the payment on Form 1042-S. For this and one for dividends) showing QI as the must file a Form 1042-S in the name of purpose, if the allocation information recipient. WA must show information the foreign single owner. The taxpayer provided to the withholding agent relating to NQI in boxes 17 through 20 on identifying number (TIN) on the Form indicates an allocation of more than 100% all six Forms 1042-S. 1042-S, if required, must be the foreign of the payment, then no portion of the Example 2. The facts are the same as single owner’s TIN. payment should be considered to be in Example 1, except that A and B are Example. associated with a Form W-8, Form W-9, A withholding agent (WA) account holders of NQI2, which is an makes a payment of interest to LLC, a or other appropriate documentation. The account holder of NQI. NQI2 provides foreign limited liability company. LLC is Form 1042-S should be completed by NQI with a Form W-8IMY with which it

wholly-owned by FC, a foreign entering “Unknown Recipient” in box 13 associates the Forms W-8BEN of A and B

corporation. LLC is treated as a and recipient code 20 in box 12. and a complete withholding statement disregarded entity. WA has a Form Pro-rata reporting. If the withholding that allocates the interest and dividend

W-8BEN from FC on which it states that it agent has agreed that an NQI may payments it receives from NQI to A and is the beneficial owner of the income paid provide information allocating a payment B. NQI provides WA with its Form to LLC. WA reports the interest payment to its account holders under the W-8IMY and the Forms W-8IMY of NQI2 on Form 1042-S showing FC as the alternative procedure of Regulations and QI and the Forms W-8BEN of A and recipient. The result would be the same if section 1.1441-1(e)(3)(iv)(D) (i.e., no later B. In addition, NQI associates a complete LLC was a domestic entity. than February 14, 2004) and the NQI fails withholding statement with its Form

Note: A disregarded entity can claim to to allocate more than 10% of the payment W-8IMY that allocates the payments of

be the beneficial owner of a payment if it in a withholding rate pool to the specific interest and dividends to A, B, and QI.

is a hybrid entity claiming treaty benefits. recipients in the pool, the withholding WA must file six Forms 1042-S: two

See Form W-8BEN and its instructions for agent must file Forms 1042-S for each Forms 1042-S (one for interest and one recipient in the pool on a pro-rata basis. more information. If a disregarded entity for dividends) showing A as the recipient,

claims on a valid Form W-8BEN to be the If, however, the NQI fails to timely two Forms 1042-S (one for interest and

beneficial owner of treaty benefitted allocate 10% or less of the payment in a one for dividends) showing B as the

income, the U.S. withholding agent must withholding rate pool to the specific recipient, and two Forms 1042-S (one for

complete a Form 1042-S treating the recipients in the pool, the withholding interest and one for dividends) showing

disregarded entity as a recipient and use agent must file Forms 1042-S for each QI as the recipient. The Forms 1042-S

recipient code 02 (corporation). recipient for which it has allocation issued to A and B must show information

2. Amounts paid to a nonqualified information and report the unallocated relating to NQI2 in boxes 17 through 20

intermediary or flow-through entity. If a portion of the payment on a Form 1042-S because A and B receive their payments

U.S. withholding agent makes a payment issued to “Unknown Recipient.” In either directly from NQI2, not NQI. The Forms

to an NQI or a flow-through entity, it must case, the withholding agent must include 1042-S issued to QI must show

complete a separate Form 1042-S for the NQI information in boxes 17 through information relating to NQI in boxes 17

each recipient on whose behalf the NQI 20 on that form. See Example 6 and through 20. Example 7 on page 8. or flow-through entity acts as indicated by Example 3. FP is a nonwithholding

its withholding statement and the foreign partnership and therefore a The following examples illustrate Form

documentation associated with its Form flow-through entity. FP establishes an 1042-S reporting for payments made to

W-8IMY. If a payment is made through account with WA, a U.S. withholding NQIs and flow-through entities.

tiers of NQIs or flow-through entities, the Example 1. NQI, a nonqualified agent, from which FP receives interest

withholding agent must nevertheless intermediary, has three account holders, described by income code 01 (interest

complete Form 1042-S for the recipients A, B, and QI. All three account holders paid by U.S. obligors–general). FP has

to which the payments are remitted. A invest in U.S. securities that produce three partners, A, B, and C, all of whom

withholding agent completing Form interest and dividends. A and B are are individuals. FP provides WA with a

1042-S for a recipient that receives a foreign individuals and have provided NQI Form W-8IMY with which it associates the

payment through an NQI or a with Forms W-8BEN. QI is a qualified Forms W-8BEN from each of A, B, and C.

flow-through entity must include in boxes intermediary and has provided NQI with a In addition, FP provides a complete

17 through 20 of Form 1042-S the name, Form W-8IMY and the withholding withholding statement with its Form

country code, address, and TIN, if any, of statement required from a qualified W-8IMY that allocates the interest

the NQI or flow-through entity from whom intermediary. QI’s withholding statement payments among A, B, and C. WA must

-7-
file three Forms 1042-S, one each for A, C, and D. NQI receives Forms W-8BEN Payments allocated, or presumed

B, and C. The Forms 1042-S must show from each of A, B, C, and D. NQI made, to U.S. non-exempt recipients.

information relating to FP in boxes 17 You may be given Forms W-9 or other establishes an account with WA, a U.S.

through 20. withholding agent, in which it holds information regarding U.S. non-exempt

Example 4. NQI is a nonqualified securities on behalf of A, B, C, and D. recipients from an NQI or flow-through

intermediary. It has four customers: A, B, The securities pay interest that is entity together with information allocating

C, and D. NQI receives Forms W-8BEN described by income code 01 (interest all or a portion of the payment to U.S.

paid by U.S. obligors–general) and that non-exempt recipients. You must report from each of A, B, C, and D. NQI

establishes an account with WA, a U.S. may qualify for the portfolio interest income allocable to a U.S. non-exempt

withholding agent, in which it holds exemption from withholding if all of the recipient on the appropriate Form 1099

securities on behalf of A, B, C, and D. requirements for that exception are met. and not on Form 1042-S, even though

The securities pay interest that is NQI provides WA with a Form W-8IMY you are paying that income to an NQI or a

described by income code 01 (interest with which it associates the Forms flow-through entity.

paid by U.S. obligors–general) and that You may also be required under the W-8BEN of A, B, C, and D. WA and NQI

may qualify for the portfolio interest presumption rules to treat a payment agree that they will apply the alternative

exemption from withholding if all of the made to an NQI or flow-through entity as procedures of Regulations section

requirements for that exception are met. made to a payee that is a U.S. 1.1441-1(e)(3)(iv)(D). Accordingly, NQI

NQI provides WA with a Form W-8IMY non-exempt recipient from which you provides a complete withholding

with which it associates the Forms must withhold 30% of the payment under statement that indicates that it has one

W-8BEN of A, B, C, and D. However, NQI the backup withholding provisions of the 0% withholding rate pool. WA pays $100

does not provide WA with a complete Code. In this case, you must report the of interest to NQI. NQI fails to provide WA

withholding statement in association with payment on the appropriate Form 1099. with the allocation information by

its Form W-8IMY. Because NQI has not February 14, 2004. Therefore, WA must See the General Instructions for Forms

provided WA with a complete withholding report 25% of the payment to each of A, 1099, 1098, 5498, and W-2G.

statement, WA cannot reliably associate B, C, and D using pro-rata basis Example 1. FP is a nonwithholding the payments of interest with the reporting. Accordingly, for each of the foreign partnership and therefore a documentation of A, B, C, and D and Forms 1042-S, WA must enter $25 in box flow-through entity. FP establishes an must apply the presumption rules. Under 2 (gross income),“30.00” in box 5 (tax account with WA, a U.S. withholding the presumption rules, WA must treat the rate), and $0 in box 7 (U.S. Federal tax agent, from which FP receives interest interest as paid to an unknown recipient withheld). In addition, WA must check the described by income code 01 (interest that is a foreign person. The payments of PRO-RATA BASIS REPORTING box at paid by U.S. obligors–general). FP has interest are subject to 30% withholding. the top of the form and include NQI’s three partners, A, B, and C, all of whom WA must complete one Form 1042-S, name, address, country code, and TIN, if are individuals. FP provides WA with a entering “Unknown Recipient” in box 13 any, in boxes 17 through 20. WA must Form W-8IMY with which it associates

and recipient code 20 in box 12. WA must enter “30.00” in box 5 (tax rate) because Forms W-8BEN from A and B and a Form

include information relating to NQI in without allocation information, WA cannot W-9 from C, a U.S. person. In addition, boxes 17 through 20 and must provide reliably associate the payment of interest FP provides a complete withholding the recipient copies of the form to NQI. with documentation from a foreign statement in association with its Form

Because NQI has failed to provide all the beneficial owner and therefore may not W-8IMY that allocates the interest

information necessary for WA to apply the portfolio interest exception. See payments among A, B, and C. WA must accurately report the payments of interest the instructions for box 6 (exemption file two Forms 1042-S, one each for A to A, B, C, and D, NQI must report the code) on page 12 for information on and B, and a Form 1099-INT for C. payments on Form 1042-S. See completing that box. Example 2. The facts are the same as Amounts Paid by Nonqualified Example 7. The facts are the same as in Example 1, except that the payment Intermediaries and Flow-Through in Example 6, except that NQI timely made by WA is described by income code Entities on page 9. The results would be provides WA with information allocating 31 (short-term OID) and FP does not the same if WA’s account holder was a 70% of the payment to A, 10% of the provide any documentation from its flow-through entity instead of a payment to B, and 10% of the payment to partners. Because WA cannot reliably nonqualified intermediary. C. NQI fails to allocate any of the associate the short-term OID with Example 5. The facts are the same as payment to D. Because NQI has allocated documentation from a payee, it must in Example 4, except that NQI provides 90% of the payment made to the 0% apply the presumption rules. Under the the Forms W-8BEN of A and B, but not withholding rate pool, WA is not required presumption rules, the OID is deemed the Forms W-8BEN of C and D. NQI also to report to NQI’s account holders on a paid to an unknown U.S. non-exempt provides a withholding statement that pro-rata basis. Instead, WA must file recipient. WA must, therefore, apply allocates a portion of the interest payment Forms 1042-S for A, B, and C, entering backup withholding at 30% to the to A and B but does not allocate the $70, $10, and $10, respectively in box 2 payment of OID and report the payment remaining portion of the payment. WA (gross income), “-0-” in box 5 (tax rate), on Form 1099-INT. WA must file a Form must file three Forms 1042-S: one exemption code 05 (portfolio interest) in 1099-INT and send a copy to FP. showing A as the recipient in box 13, one box 6, and $0 in box 7 (U.S. Federal tax showing B as the recipient in box 13, and withheld). WA must apply the one showing “Unknown Recipient” in box presumption rules to the $10 that NQI has Amounts Paid by Qualified 13 (and recipient code 20 in box 12) for not allocated and file a Form 1042-S

the unallocated portion of the payment Intermediaries showing “Unknown Recipient” in box 13 that cannot be associated with valid and recipient code 20 in box 12. On that In general. A QI reports payments on documentation from a recipient. In Form 1042-S, WA must also enter “30.00” Form 1042-S in the same manner as a addition, WA must send this form (i.e., the in box 5 (tax rate) because the portfolio U.S. withholding agent. However, Form 1042-S for the unknown recipient) interest exemption is unavailable and $0 payments that are made by the QI directly to NQI. All Forms 1042-S must contain in box 7 (U.S. Federal tax withheld) to foreign beneficial owners (or that are information relating to NQI in boxes 17 because no amounts were actually treated as paid directly to beneficial through 20. The results would be the withheld from the interest. In addition, WA owners) may generally be reported on the same if WA’s account holder was a must send this form (i.e., the Form basis of reporting pools. A reporting pool flow-through entity instead of a 1042-S for the unknown recipient) to NQI. consists of income that falls within a nonqualified intermediary. All Forms 1042-S must contain particular withholding rate and within a

Example 6. NQI is a nonqualified information relating to NQI in boxes 17 particular income code, exemption code,

intermediary. It has four customers: A, B, through 20. or recipient code as determined on Form

-8-
1042-S. A QI may not report on the basis known. These amounts must not be receives the payment from the NQI. A QI

of reporting pools in the circumstances reported on Form 1042-S. In addition, that is completing Form 1042-S for a

described in Recipient-by-Recipient amounts paid to U.S. exempt recipients recipient that receives a payment through

Reporting below. A QI may use a single are not subject to reporting on Form an NQI must include in boxes 17 through

recipient code 15 (qualified intermediary 1042-S or Form 1099. 20 the name, country code, address, and

withholding rate pool–general) for all TIN, if any, of the NQI from whom the

reporting pools except for amounts paid recipient directly receives the payment. Amounts Paid to Private

to foreign tax-exempt recipients, for which Arrangement Intermediaries 3. Payments made to a

recipient code 16 should be used. Note, A QI generally must report payments flow-through entity. The QI must

however, that a QI should only use complete a Form 1042-S for each made to each private arrangement recipient code 16 for pooled account recipient who receives the payment from intermediary (PAI) (defined on page 3) as holders that have claimed an exemption the flow-through entity. A QI that is if the PAI’s direct account holders were its

based on their tax-exempt status and not completing a Form 1042-S for a recipient own. Therefore, if the payment is made some other exemption (i.e., tax treaty or that receives a payment through a directly by the PAI to the recipient, the QI other Code exception). See Amounts may report the payment on a pooled flow-through entity must include in boxes

Paid to Private Arrangement basis. A separate Form 1042-S is 17 through 20 the name, country code,

Intermediaries below, if a QI is reporting address, and TIN, if any, of the required for each withholding rate pool of a withholding pool paid to a PAI. flow-through entity from which the each PAI. The QI must, however, use

Example 1. recipient code 13 or 14 for PAIs and must recipient directly receives the payment. QI, a qualified

intermediary, has four direct account include the name and address of the PAI Example 1. QI, a qualified holders, A and B, foreign individuals, and in box 13. If the PAI is providing recipient intermediary, has NQI, a nonqualified X and Y, foreign corporations. A and X information from an NQI or flow-through intermediary, as an account holder. NQI are residents of a country with which the entity, the QI may not report the has two account holders, A and B, both United States has an income tax treaty payments on a pooled basis. Instead, it foreign persons who receive U.S. source and have provided documentation that must follow the same procedures as a dividends from QI. NQI provides QI with a establishes that they are entitled to a U.S. withholding agent making a payment valid Form W-8IMY, with which it lower treaty rate of 15% on withholding of to an NQI or flow-through entity. associates Forms W-8BEN from A and B

dividends from U.S. sources. B and Y are Example. QI, a qualified intermediary, and a complete withholding statement not residents of a treaty country and are pays U.S. source dividends to direct that allocates the dividends paid to NQI subject to 30% withholding on dividends. account holders that are foreign persons between A and B. QI must complete two QI receives U.S. source dividends on and beneficial owners. It also pays a Forms 1042-S, one for A and one for B, behalf of its four customers. QI must file portion of the U.S. source dividends to and include information relating to NQI in one Form 1042-S for the 15% withholding two private arrangement intermediaries, boxes 17 through 20. rate pool. This Form 1042-S must show PAI1 and PAI2. The private arrangement Example 2. QI, a qualified income code 06 (dividends paid by U.S. intermediaries pay the dividends they intermediary, has FP, a foreign corporations–general) in box 1, “15.00” in receive from QI to foreign persons that nonwithholding partnership, as an box 5 (tax rate), recipient code 15 are beneficial owners and direct account account holder. QI pays interest (qualified intermediary withholding rate holders in PAI1 and PAI2. All of the described by income code 01 (interest pool–general) in box 12, and dividends paid are subject to a 15% rate paid by U.S. obligors–general) to FP. FP “Withholding rate pool” in box 13 of withholding. QI must file a Form has three partners, A, B, and C, all of (recipient’s name). QI must also file one 1042-S for the dividends paid to its own whom are individuals. FP provides QI with Form 1042-S for the 30% withholding rate direct account holders that are beneficial a Form W-8IMY with which it associates pool that contains the same information owners. QI must also file two Forms the Forms W-8BEN from each of A, B, as the Form 1042-S filed for the 15% 1042-S, one for the dividends paid to the and C. In addition, FP provides a withholding rate pool, except that it will direct account holders of each of PAI1 complete withholding statement in show “30.00” in box 5 (tax rate). and PAI2. Each of the Forms 1042-S that association with its Form W-8IMY that

Example 2. The facts are the same as QI files for payments made to PAI1 and allocates the interest payments among A, in Example 1, except that Y is an PAI2 must contain recipient code 13 B, and C. QI must file three Forms organization that has tax-exempt status in (private arrangement intermediary 1042-S, one each for A, B, and C. The the United States and in the country in withholding rate pool–general) in box 12 Forms 1042-S must show information

which it is located. QI must file three and the name and address of PAI1 or relating to FP in boxes 17 through 20. Forms 1042-S. Two of the Forms 1042-S PAI2 in box 13 (recipient’s name and will contain the same information as in address). Amounts Paid by Example 1. The third Form 1042-S will

contain information for the withholding Recipient-by-Recipient Nonqualified

rate pool consisting of the amounts paid Reporting Intermediaries and to Y. This Form 1042-S will show income If a QI is not permitted to report on the code 06 (dividends paid by U.S. basis of reporting pools, it must follow the Flow-Through Entities corporations–general) in box 1, “-0-” in same rules that apply to a U.S. An NQI and a flow-through entity are box 5 (tax rate), exemption code 02 withholding agent. A QI may not report withholding agents and must file Forms (exempt under an Internal Revenue Code the following payments on a reporting 1042-S for amounts paid to recipients. section (income other than portfolio pool basis, but rather must complete However, an NQI or flow-through entity is interest)) in box 6, recipient code 16 Form 1042-S for each appropriate not required to file Form 1042-S if it is not (qualified intermediary withholding rate recipient. required to file Form 1042-S under the pool–exempt organizations) in box 12, 1. Payments made to another QI, Multiple Withholding Agent Rule on

and “Zero rate withholding pool–exempt withholding foreign partnership, or page 10. An NQI or flow-through entity organizations,” or similar designation, in withholding foreign trust. must report payments made to recipients The QI must box 13 (recipient’s name). complete a Form 1042-S treating the to the extent it has failed to provide to

Under the terms of its withholding other QI, withholding foreign partnership, another withholding agent the appropriate

agreement with the IRS, the QI or withholding foreign trust as the documentation and complete withholding

CAUTION may be required to report the recipient. statement, including information allocating !

amounts paid to U.S. non-exempt 2. Payments made to an NQI the payment to each recipient.

recipients on Form 1099 using the name, (including an NQI that is an account Forms 1042-S must be filed in any

address, and TIN of the payee to the holder of a PAI). The QI must complete a case where the NQI or flow-through entity

extent those items of information are Form 1042-S for each recipient who is making a payment to a recipient and

-9-
tax has been withheld on the payment by Because NQI has not provided WA with establishing their foreign status. D is a

another withholding agent that did not beneficial owner information for C and D, U.S. person and has provided NQI with a

report the payment on Form 1042-S to NQI must report the interest paid to C and Form W-9. Under the presumption rules,

the recipient, even if the recipient should D on Forms 1042-S. (Note that under the WA must treat the bank deposit interest

have been exempt from taxation. Failure multiple withholding agent rule, NQI is not as being paid to an unknown U.S. person

to file Forms 1042-S may not only result required to file a Form 1042-S for A or B.) and apply backup withholding at 30%.

in penalties for the NQI or flow-through The Forms 1042-S for C and D should WA must complete one Form 1099 for an

entity, but may result in the denial of any show $25 in box 2 (gross income) and unknown payee showing 30% backup

refund claim made by a recipient. $7.50 in box 7 (the actual U.S. Federal withholding. A copy of the form must be

tax withheld). The rate of tax NQI includes sent to NQI. Because NQI failed to If another withholding agent has on the Form 1042-S for C and D depends provide the requisite documentation to withheld tax on an amount that should on the rate of withholding to which they WA and because the amounts have been have been exempt (e.g., where the should be subject. Thus, if C and D subject to withholding, NQI must report withholding agent applied the provided NQI with documentation prior to the amounts paid to A, B, C, and D. presumption rules because it did not the payment of interest that would qualify Accordingly, NQI must file a Form 1042-S receive proper documentation or other the interest as portfolio interest, the rate for each A, B, and C showing deposit required information from the NQI or entered in box 5 should be “-0-.” If they do interest (income code 29) as the type of flow-through entity), the NQI or not qualify for a reduced rate of payment in box 1; “-0-” in box 5 (the flow-through entity should report the withholding, NQI should enter “30.00” in correct tax rate); the actual amount correct tax rate and the actual U.S. box 5. In any event, NQI must also enter withheld from the payment allocable to A, Federal tax withheld in boxes 5 and 7 and “99” in box 6 (exemption code) of the B, and C in box 7; and exemption code 99 should enter the applicable exemption Forms 1042-S it prepares for C and D. in box 6. (See the instructions for box 6 code using the instructions for box 6 on

page 13. See the instructions for box 6 on page 13. on page 13.) NQI must also file a Form

1099 for D to report the actual amounts NQI or flow-through entity provides Example 2. A U.S. withholding agent paid and withheld. correct and complete information to (WA) makes a $100 dividend payment to

another withholding agent yet the a foreign bank (NQI) that acts as a

withholding agent underwithholds. In nonqualified intermediary. NQI receives Multiple Withholding

the payment on behalf of A, a resident of this case, assuming that the NQI or Agent Rule flow-through entity knows that the a treaty country who is entitled to a 15%

rate of withholding, and B, a resident of a A withholding agent is not required to file withholding agent underwithheld, the NQI country that does not have a tax treaty Form 1042-S if a return is filed by another or flow-through entity must withhold with the United States and who is subject withholding agent reporting the same additional amounts to bring the total to 30% withholding. NQI provides WA amount to the same recipient (the multiple withholding to the correct amount. with its Form W-8IMY to which it withholding agent rule). If an NQI or Furthermore, the NQI or flow-through associates the Forms W-8BEN from both flow-through entity has provided another entity must complete Form 1042-S and

must include in boxes 5 and 7 the correct A and B and a complete withholding withholding agent with the appropriate

statement that allocates 50% of the documentation and complete withholding tax rate and the combined amount of U.S.

dividend to A and 50% to B. A’s Form statement, including information allocating Federal tax withheld by the NQI or W-8BEN claims a 15% treaty rate of the payment to each recipient, the NQI or flow-through entity and any other withholding. B’s Form W-8BEN does not flow-through entity may presume that the withholding agent in the chain of payment claim a reduced rate of withholding. WA, other withholding agent filed the required that has withheld on the payment. See however, mistakenly withholds only 15%, Forms 1042-S unless the NQI or Example 2 below.

$15, from the entire $100 payment. WA flow-through entity knows, or has reason Example 1. A foreign bank acts as a completes a Form 1042-S for each A and to know, that the required Form 1042-S nonqualified intermediary (NQI) for four B as the recipients, showing on each form reporting has not been done. different foreign persons (A, B, C, and D) $50 of dividends in box 2, a withholding each of whom own securities from which The multiple withholding agent rule rate of “15.00” in box 5 (tax rate), and they receive interest. The interest is paid does not relieve withholding agents from $7.50 as the amount withheld in box 7. by a U.S. withholding agent (WA) as Form 1042-S reporting responsibility in Under the multiple withholding agent rule, custodian of the securities for NQI. A, B, the following circumstances. NQI is not required to file a Form 1042-S C, and D each own a 25% interest in the for A. However, because NQI knows (or • Any withholding agent making a securities. NQI has furnished WA a Form

W-8IMY to which it has attached Forms should know) that B is subject to a 30% payment to a QI, withholding foreign

W-8BEN from A and B. NQI’s Form rate of withholding, and assuming it partnership, or withholding foreign trust

W-8IMY contains an attachment stating knows that WA only withheld 15%, the must report that payment as made to the

multiple withholding agent rule does not QI, withholding foreign partnership, or that 25% of the securities are allocable to apply to the dividend paid to B and NQI withholding foreign trust. each of A and B, and 50% to must withhold an additional 15% from the • Any U.S. withholding agent making a undocumented owners. WA pays $100 of payment to B. NQI must then file a Form payment to an authorized foreign agent interest during the calendar year. WA 1042-S for B showing $50 of dividends in must report that payment to the treats the $25 of interest allocable to A box 2, “30.00” in box 5 (the correct tax authorized foreign agent. and the $25 of interest allocable to B as rate), and $15 withheld in box 7 (the portfolio interest and completes a Form • Any withholding agent making a combined amount withheld). NQI must 1042-S for A and for B as the recipients. payment to a U.S. branch treated as a

WA includes information relating to NQI in also enter “00” in box 6 (exemption code). U.S. person must report the payment as

boxes 17 through 20 on the Forms See the instructions for box 6 on page 13. made to that branch.

1042-S for A and B. WA subjects the Example 3. A withholding agent (WA) • Any withholding agent making a

remaining $50 of interest to 30% receives a Form W-8IMY from a payment to a flow-through entity must

withholding under the presumption rules nonqualified intermediary (NQI). NQI’s report the payment as made to a

and reports the interest on a Form 1042-S Form W-8IMY relates to payments of beneficial owner, QI, withholding foreign

by entering “Unknown Recipient” in box bank deposit interest. NQI collects the partnership, or withholding foreign trust

13 (and recipient code 20 in box 12), bank deposit interest on behalf of A, B, C, that has a direct or indirect interest in that

“30.00” in box 5 (tax rate), and $15 as the and D, but does not associate Forms entity.

amount withheld in box 7. WA also W-8, W-9, or other documentary evidence • Any withholding agent that withholds an

includes information relating to NQI in with the Form W-8IMY that NQI provides amount from a payment under Chapter 3

boxes 17 through 20 of the Form 1042-S WA. A, B, and C are foreign persons for of the Code must report that amount to

and sends a copy of the form to NQI. whom NQI has valid documentation the recipient from whom it was withheld,

-10-
unless the payment is reportable on return for failure to file information returns italics in the Country Code list beginning

another IRS form. on magnetic media unless you establish on page 15.

Furthermore, the multiple withholding reasonable cause. The penalty applies You, the withholding agent, are agent rule does not relieve the following separately to original returns and liable for the tax if you know, or from Form 1042-S reporting corrected returns. should have known, that CAUTION

!

responsibility. underwithholding on a payment has • Any QI required to report an amount to Avoid Common Errors occurred. a withholding rate pool and To ensure that your Forms 1042-S can be • An NQI or flow-through entity that has correctly processed, be sure that you: not transmitted a valid Form W-8 or other • Carefully read the information provided valid documentation to another in Pub. 515 and these instructions. Specific Instructions withholding agent together with the • If you are a magnetic media or required withholding statement. electronic filer, comply with the for Withholding

Penalties requirements in Pub. 1187. Agents • Complete all required fields. At a The following penalties apply to the minimum, you must enter information in Note: All amounts must be reported in

person required to file Form 1042-S. The boxes 1, 2, 5, 6, 7, 9, 10, 12, 13, 15, and U.S. dollars.

penalties apply to both paper filers and to 16. Other boxes must be completed if the magnetic media/electronic filers. nature of the payment requires it. Rounding Off to Whole 1. Late filing of correct Form 1042-S. Note: You may leave box 6 blank if you Dollars A penalty may be imposed for failure to are applying backup withholding to the To round off amounts to the nearest file each correct and complete Form payment being reported. 1042-S when due (including extensions), whole dollar, drop amounts under 50 • Use only income, recipient, exemption, unless you can show that the failure was cents and increase amounts from 50 to and country codes specifically listed in due to reasonable cause and not willful 99 cents to the next dollar. If you have to these instructions. neglect. The penalty, based on when you add two or more amounts to figure the • Use only tax rates that are allowed by file a correct Form 1042-S, is: amount to enter on a line, include cents statute, regulation, or treaty. Do not • $15 per Form 1042-S if you correctly when adding and only round off the total. attempt to “blend” rates. Instead, if file within 30 days; maximum penalty necessary, submit multiple Forms 1042-S $75,000 per year ($25,000 for a small to show changes in tax rate. VOID and CORRECTED

business). A small business, for this

purpose, is defined as having average All information you enter when Boxes at Top of Form reporting the payment must correctly annual gross receipts of $5 million or less See Correcting Paper Forms 1042-S reflect the intent of statute and beginning on page 14. for the 3 most recent tax years (or for the regulations. Generally, you should rely on period of its existence, if shorter) ending the withholding documentation you have before the calendar year in which the collected (Form W-8 series, Form 8233, PRO-RATA BASIS

Forms 1042-S are due. etc.) to complete your Form 1042-S REPORTING Box • $30 per Form 1042-S if you correctly submissions. Withholding agents must check this box file more than 30 days after the due date

but by August 1; maximum penalty Also note the following: to notify the IRS that an NQI that used the

$150,000 per year ($50,000 for a small • The gross income you report in box 2 alternative procedures of Regulations

business). cannot be zero. section 1.1441-1(e)(3)(iv)(D) failed to

• $50 per Form 1042-S if you file after • The income code you report in box 1 properly comply with those procedures.

August 1 or you do not file correct Forms must correctly reflect the type of income See Pro-rata reporting on page 7 for

1042-S; maximum penalty $250,000 per you pay to the recipient. additional information and examples.

• The withholding agent’s name, year ($100,000 for a small business).

If you intentionally disregard the address, and EIN or QI-EIN must be Box 1, Income Code reported in boxes 9 and 10 in all cases. requirement to report correct information, All filers must enter the appropriate 2-digit • The recipient’s name, address, and the penalty per Form 1042-S is increased income code from the list on page 12. TIN, if any, must be reported in boxes 13 to $100 or, if greater, 10% of the total Use the income code that is the most and 14. You must generally report a amount of items required to be reported, specific. For example, if you are paying with no maximum penalty. foreign address in box 13. See the bank deposit interest, you should use instructions for box 13 on page 14. 2. Failure to furnish correct Form code 29 (deposit interest), not code 01 • The recipient code you report in box 12 1042-S to recipient. If you fail to provide (interest paid by U.S. obligors–general). must correctly identify the recipient’s correct statements to recipients and If you paid more than one type of income status. Use recipient code 20 only if you cannot show reasonable cause, a penalty to or on behalf of the same recipient, you do not know who the recipient is. of $50 may be imposed for each failure to must complete a separate Form 1042-S

furnish Form 1042-S to the recipient when Note: If you cannot identify the recipient, for each income type.

due. The penalty may also be imposed for the tax withheld must be 30%. Note: Although income codes are failure to include all required information • The recipient’s country of residence for provided for deposit interest, short-term or for furnishing incorrect information on tax purposes that you report in box 15 OID, and notional principal contract Form 1042-S. The maximum penalty is must be present and correctly coded and income, those items are not always $100,000 for all failures to furnish correct cannot be “US”. Additionally, do not use subject to reporting on Form 1042-S. For recipient statements during a calendar “OC” or “UC” except as specifically example, bank deposit interest is year. If you intentionally disregard the allowed in these instructions. reportable if it is effectively connected requirement to report correct information, • The exemption code you report in with the conduct of a U.S. trade or

each $50 penalty is increased to $100 or, box 6 must correctly identify the proper business or is paid to a resident of if greater, 10% of the total amount of tax status for the type of income you pay Canada. Short-term OID or bank deposit items required to be reported, and the to the recipient. interest may need to be reported by an $100,000 maximum does not apply. Note: If you use exemption code 04 NQI or flow-through entity if those

3. Failure to file on magnetic media. (exempt under tax treaty), the recipient’s amounts are paid to foreign persons and

If you are required to file on magnetic country of residence for tax purposes that another withholding agent backup

media but fail to do so, and you do not you report in box 15 must be a valid treaty withheld on those amounts under the

have an approved waiver on record, you country. Countries with which the United presumption rules. (See Example 3 on

may be subject to a $50 penalty per States has a tax treaty are shown in bold page 10.) Notional principal contract

-11-
income is reportable if it is effectively is nontaxable or represents a capital gain • You must report only the amount of

connected with the conduct of a trade or dividend or exempt-interest dividend cash paid on notional principal contracts.

business in the United States. For more distributed by a regulated investment

information, see the regulations under company.

Chapter 3 of the Code and Pub. 515. • You must report the entire amount of a Box 3, Withholding

payment if you do not know at the time of Allowances payment the amount that is subject to Box 2, Gross Income withholding because the determination of This box should only be completed if the

For each income type, enter the gross the source of the income or the income code reported in box 1 is 15

amount you paid to or on behalf of the calculation of the amount of income (scholarship or fellowship grants) or 16

(compensation for independent personal recipient during calendar year 2003, subject to tax depends upon facts that are

including withheld tax. The following not known at the time of payment. services). See Pub. 515 for more

special procedures apply to the reporting • You must report the entire amount of information.

of gross income. gains relating to the disposal of timber,

• You must report the entire amount of a coal, or domestic iron ore with a retained

corporate distribution made with respect economic interest and gains relating to Box 4, Net Income

to stock even if you elect to reduce the contingent payments received from the Complete this box only if you entered an

amount of withholding on the distribution sale or exchange of patents, copyrights, amount in box 3. Otherwise, leave it

because all or a portion of the distribution and similar intangible property. blank.

Income Codes, Exemption Codes, and Recipient Codes

Box 1. Enter the appropriate income code. Box 6. If the tax rate entered in box 5 is 0%, you must generally

enter the appropriate exemption code from the list below (but

Code Interest Income see the Caution below).

01 Interest paid by U.S. obligors—general

02 Interest paid on real property mortgages Code Authority for Exemption

03 Interest paid to controlling foreign corporations 01 Income effectively connected with a U.S. trade or business

04 Interest paid by foreign corporations 02 Exempt under an Internal Revenue Code section (income other

05 Interest on tax-free covenant bonds than portfolio interest)

29 Deposit interest 03 Income is not from U.S. sources4

30 Original issue discount (OID) 04 Exempt under tax treaty

31 Short-term OID 05 Portfolio interest exempt under an Internal Revenue Code

section

Code Dividend Income 06 Qualified intermediary that assumes primary withholding

06 Dividends paid by U.S. corporations—general responsibility

07 Dividends qualifying for direct dividend rate 07 Withholding foreign partnership or withholding foreign trust

08 Dividends paid by foreign corporations 08 U.S. branch treated as a U.S. person

09 Qualified intermediary represents income is exempt

Code Other Income

09 Capital gains Caution: See the instructions for box 6 on page 13 for information on

10 Industrial royalties additional codes (“00” and “99”) that may be required.

11 Motion picture or television copyright royalties

12 Other royalties (e.g., copyright, recording, publishing) Box 12. Enter the appropriate recipient code.

13 Real property income and natural resources royalties

14 Pensions, annuities, alimony, and/or insurance premiums Code Type of Recipient

15 Scholarship or fellowship grants 01 Individual2

16 Compensation for independent personal services1 02 Corporation2

17 Compensation for dependent personal services1 03 Partnership other than a withholding foreign partnership2

18 Compensation for teaching1 04 Withholding foreign partnership or withholding foreign trust

19 Compensation during studying and training1 05 Trust

20 Earnings as an artist or athlete2 06 Government or international organization

24 Real estate investment trust (REIT) distributions of capital gains 07 Tax-exempt organization (IRC section 501(a))

25 Trust distributions subject to IRC section 1445 08 Private foundation

26 Unsevered growing crops and timber distributions by a trust 09 Artist or athlete2

subject to IRC section 1445 10 Estate

27 Publicly traded partnership distributions subject to IRC section 11 U.S. branch treated as U.S. person

1446 12 Qualified intermediary

28 Gambling winnings 13 Private arrangement intermediary withholding rate

32 Notional principal contract income3 pool—general5

50 Other income 14 Private arrangement intermediary withholding rate

pool—exempt organizations5

15 Qualified intermediary withholding rate pool—general5

16 Qualified intermediary withholding rate pool—exempt

organizations5

17 Authorized foreign agent

20 Unknown recipient

1 If compensation that otherwise would be covered under Income Codes 16–19 is directly attributable to the recipient’s occupation as an artist or

athlete, use Income Code 20 instead. 2 If Income Code 20 is used, Recipient Code 09 (artist or athlete) should be used instead of Recipient Code 01 (individual), 02 (corporation), or 03

(partnership other than withholding foreign partnership). 3 Use appropriate Interest Income Code for embedded interest in a notional principal contract.

4 Non-U.S. source income paid to a nonresident alien is not subject to U.S. tax. Use Exemption Code 03 when entering an amount for information

reporting purposes only. 5 May be used only by a qualified intermediary.

-12-
Box 5, Tax Rate that it is a withholding foreign partnership overwithholding that the filing of the Form

or trust. 1042 constitutes a claim for refund. Enter the correct rate of withholding that 4. A withholding agent should use applies to the income in box 2 (gross

income) or box 4 (net income), as exemption code 09 (qualified intermediary Box 9, Withholding represents income is exempt) only if it appropriate. The correct tax rate should makes a payment to a QI that has Agent’s Employer not be included even if you withheld less than assumed primary withholding Identification Number (EIN) that rate. For example, if an NQI is responsibility under Chapter 3 of the reporting dividends paid to a beneficial You are generally required to enter your Code or primary backup withholding owner who is a resident of a country with EIN. However, if you are filing Form responsibility, but has represented on a which the United States does not have a 1042-S as a QI, withholding foreign withholding statement associated with its tax treaty and a U.S. withholding agent partnership, or withholding foreign trust, Form W-8IMY that the income is exempt paid the dividend and withheld only 15% enter your QI-EIN. Enter the number and from withholding. (rather than the required 30%) and the check the applicable box. 5. If you have failed to provide NQI withholds an additional 15%, the NQI If you do not have an EIN, you should another withholding agent with should report “30.00” in box 5. See apply for one on Form SS-4, Application appropriate information regarding the Example 2 on page 10. for Employer Identification Number. You status of the person to whom you are

making a payment, the other withholding can get Form SS-4 by calling Enter the tax rate using the following 1-800-TAX-FORM (1-800-829-3676) or format: two digits, a decimal, and two agent may be required to withhold on the from the IRS Web Site at www.irs.gov. digits (e.g., “30.00” for 30%). However, if payment based on the presumption rules. File corrected Forms 1042-S when you the income is exempt from tax under a If the income is in fact exempt from

withholding, you must submit a Form receive your EIN. U.S. tax treaty or the Code, enter “-0-”. If

the tax rate is less than 10%, enter a zero 1042-S providing the correct information. To get a QI-EIN, submit Form SS-4

before the tax rate (e.g., enter “04.00” for In this situation, you must: with your Application for QI Status

4%). • Indicate the correct rate at which the (completed in accordance with Section 3

income should have been subject to of the preamble of Rev. Proc. 2000-12. Note: If you withheld at more than one withholding in box 5 (usually 0% (-0-)), You can find Rev. Proc. 2000-12 on page tax rate for a specific type of income that • Enter “99” in box 6, and 387 of Internal Revenue Bulletin 2000-4

you paid to the same recipient, you must • Enter the actual amount of U.S. at www.irs.gov/pub/irs-irbs/irb00-04.pdf.) file a separate Form 1042-S for each Federal tax withheld by the other Do not send an application for a QI-EIN amount to which a separate rate was withholding agent in box 7. to the Philadelphia Service Center; it will applied. not be processed. You must also provide the correct

recipient code in box 12 and the name Box 6, Exemption Code and address of the actual recipient in Box 10, Withholding

Note: If you are filing a Form 1042-S to box 13. Agent’s Name and correct certain information already

provided to you by another withholding Address Box 7, U.S. Federal Tax agent on a Form 1099 or Form 1042-S Enter your name and address. Include the

(e.g., as required under Amounts Paid Withheld suite, room, or other unit number after the

by Nonqualified Intermediaries and Note: Box 7 must street address. If your post office does not be completed in all Flow-Through Entities on page 9), see cases, even if no tax has actually been deliver mail to the street address and you

item 5 below. withheld. have a P.O. box, show the box number

instead of the street address. Generally, if the tax rate you entered in Enter the total amount of U.S. Federal

box 5 is 0% (-0-), you should enter the Note: On statements furnished to tax actually withheld. If no tax has been appropriate exemption code (01 through Canadian recipients of U.S. source withheld on the payment by any 09) from the list on page 12. deposit interest, in addition to your name withholding agent, enter “-0-”. If you are a and address, you must include the withholding agent filing a Form 1042-S to If an amount was withheld under telephone number of a person to contact. report income that has already been Chapter 3 of the Code (i.e., the tax rate This number must provide direct access subject to withholding by another you entered in box 5 is greater than zero to an individual who can answer withholding agent, enter the aggregate and is not due to backup withholding), questions about the statement. The amount of tax withheld by you and any enter “00” in box 6. If the tax rate you telephone number is not required on other withholding agent (see Amounts entered in box 5 is due to backup Copy A of paper forms or on magnetic Paid by Nonqualified Intermediaries withholding, leave box 6 blank. media filed with the IRS. You must also and Flow-Through Entities on page 9). 1. If exemption code 01 (income include a statement that the information

effectively connected with a U.S. trade or on the form is being furnished to the

business) may apply, you must enter the Box 8, Amount Repaid to United States Internal Revenue Service

recipient’s U.S. TIN in box 14. If the Recipient and may be furnished to Canada.

recipient’s U.S. TIN is unknown or This box should be completed only if: unavailable, you must withhold tax at the Box 11, Recipient’s • You repaid a recipient an amount that foreign-person rate of 30% (30.00) and was overwithheld and Account Number enter “00” in box 6. • You are going to reimburse yourself by 2. A withholding agent should use You may use this box to enter the reducing, by the amount of tax actually exemption code 06 (qualified intermediary account number assigned by you to the repaid, the amount of any deposit made recipient. that assumes primary withholding for a payment period in the calendar year responsibility) only if it is making a

payment to a QI that has represented on following the calendar year of withholding. Box 12, Recipient Code Generally, a QI should not enter an its Form W-8IMY that it is assuming Enter the recipient code from the list on amount in box 8 unless it is a QI that has primary withholding responsibility under page 12. The following special represented on its Form W-8IMY that it is Chapter 3 of the Code. instructions apply. assuming primary withholding 3. A withholding agent should use • If applicable, use recipient code 09 responsibility under Chapter 3 of the exemption code 07 (withholding foreign (artist or athlete) instead of recipient code Code. partnership or withholding foreign trust) 01 (individual), 02 (corporation), or 03

only if it is making a payment to a foreign You must also state on a timely filed (partnership other than a withholding

partnership or trust that has represented Form 1042 for the calendar year of foreign partnership).

-13-
• Use recipient code 12 if you are making town, province or state, and country. Box 16, Recipient’s a payment to a QI and 04 if you are Follow the foreign country’s practice for

making a payment to a withholding entering the postal code. Do not Country Code

foreign partnership or a withholding abbreviate the country name. You must enter the code (from the list that

foreign trust. begins on page 15) for the country of For addresses within the United • If you are making a payment to an NQI which the recipient claims residency States, enter the address in the following or flow-through entity, you generally must under that country’s tax laws. Enter “OC” order: street address (number, street, use the recipient code that applies to the (other country) only when the country of apartment number, or rural route), city or type of recipient who receives the income residence does not appear on the list or town, state, and ZIP code. Use the U.S. from the NQI or flow-through entity. the payment is made to an international Postal Service 2-letter abbreviation for the • Use recipient code 03 (partnership organization (e.g., the United Nations). state name. Do not enter “United States” other than a withholding foreign Enter “UC” (unknown country) only if the or “U.S.” partnership) only if you are reporting a payment is to an unknown recipient. If

payment of income that is effectively you are making a payment to a QI or if Box 14, Recipient’s U.S. connected with the conduct of a trade or you are a QI and are making a payment

business of a nonwithholding foreign Taxpayer Identification to a QI withholding rate pool, enter the

partnership in the United States. country code of the QI.

Otherwise, follow the rules that apply to Number (TIN) Note: If exemption code 04 (exempt payments to flow-through entities. You must obtain and enter a U.S. under tax treaty) appears in box 6 or if a • Use recipient code 20 (unknown taxpayer identification number (TIN) for: reduced rate of withholding based on a recipient) only if you have not received a • Any recipient whose income is tax treaty is entered in box 5, the country withholding certificate or other effectively connected with the conduct of code entered in box 16 must be a country documentation for a recipient or you a trade or business in the United States. with which the United States has entered cannot determine how much of a payment Note: For these recipients, exemption into an income tax treaty. is reliably associated with a specific code 01 should be entered in box 6. recipient. Do not use this code because • Any foreign person claiming a reduced Boxes 17 Through 20, you cannot determine the recipient’s rate of, or exemption from, tax under a tax status as an individual, corporation, etc. treaty between a foreign country and the Nonqualified The regulations under Chapter 3 of the United States, unless the income consists Intermediary’s (NQI’s)/ Code provide rules on how to determine a of dividends and interest from stocks and recipient’s status when a withholding debt obligations that are actively traded; Flow-Through Entity’s agent does not have the necessary dividends from any redeemable security Name, Country Code, information. issued by an investment company • Only QIs may use recipient codes 13 registered under the Investment Address, and TIN (private arrangement intermediary Company Act of 1940 (mutual fund); If you are reporting amounts paid to a withholding rate pool–general), 14 dividends, interest, or royalties from units recipient whose withholding certificates or (private arrangement intermediary of beneficial interest in a unit investment other documentation has been submitted withholding rate pool–exempt trust that are (or were, upon issuance) to you with a Form W-8IMY provided by organizations), 15 (qualified intermediary publicly offered and are registered with an NQI or flow-through entity, you must withholding rate pool–general), and 16 the Securities and Exchange Commission include the name, address, and TIN, if (qualified intermediary withholding rate under the Securities Act of 1933; and any, of the NQI or flow-through entity with pool–exempt organizations). A QI should amounts paid with respect to loans of any whose Form W-8IMY the recipient’s Form only use recipient code 14 or 16 for of the above securities. W-8 or other documentation is pooled account holders that have claimed • Any nonresident alien individual associated. an exemption based on their tax-exempt claiming exemption from tax under status and not some other exemption Note: An NQI or flow-through entity will section 871(f) for certain annuities (e.g., treaty or other Code exception). A leave these boxes blank unless it is received under qualified plans. U.S. withholding agent making a payment making the payment to an NQI or • A foreign organization claiming an flow-through entity. to a QI should use recipient code 12. exemption from tax solely because of its

status as a tax-exempt organization under For box 18, you must enter the country Box 13, Recipient’s Name section 501(c) or as a private foundation. code from the list that begins on page 15

• Any QI. for the country where the NQI or and Address • Any withholding foreign partnership or flow-through entity is located.

Name. Enter the complete name of the withholding foreign trust. recipient. • Any nonresident alien individual Box 21, Payer’s Name and •

recipient, enter “Unknown Recipient”.

If you do not know the name of the claiming exemption from withholding on Taxpayer Identification compensation for independent personal • If Form 1042-S is being completed by a services. Number (TIN) QI for a withholding rate pool, enter • Any foreign grantor trust with five or See the definition of a payer on page 3. “Withholding rate pool” in box 13. No fewer grantors. Include the payer’s name and TIN if address is necessary. • Any U.S. branch of a foreign bank or different from that in boxes 9 and 10. • A QI reporting payments made to a PAI foreign insurance company that is treated on a withholding rate pool basis must as a U.S. person. Boxes 22 Through 24, include the name and address of the PAI If a foreign person provides a TIN on a in box 13. Form W-8, but is not required to do so, State Income Tax Withheld

Address. You must generally enter a the withholding agent must include the and Related Information TIN on Form 1042-S. foreign address in box 13. However, Include in these boxes information there are limited exceptions. For example, relating to any state income tax withheld. you may enter a U.S. address when Box 15, Recipient’s reporting payments of scholarship or Country of Residence for Correcting Paper Forms fellowship grants (income code 15).

For addresses outside the United Tax Purposes 1042-S

States or its possessions or territories, Enter the unabbreviated name of the If you filed a Form 1042-S with the IRS

enter the complete address in the recipient’s country of residence for tax and later discover you made an error on

following order: street address, city or purposes. it, you must correct it as soon as possible.

-14-
To correct a previously filed Form 1042-S, number. Routine uses of this information Step-by-Step Instructions you will need to file two Forms 1042-S. include giving it to the Department of To correct a previously filed Form 1042-S, See the Step-by-Step Instructions on Justice for civil and criminal litigation, and prepare two Forms 1042-S following the this page. cities, states, and the District of Columbia steps below. for use in administering their tax laws. We Step 1. To identify the Form 1042-S you may give the information to foreign To determine whether you are required want the IRS to disregard, enter an “X” in countries pursuant to tax treaties. We to submit corrections on magnetic media, the VOID box at the top of Copy A of the may also disclose this information to see Magnetic Media/Electronic original Form 1042-S that you filed or do Federal and state agencies to enforce Reporting on page 1 and in Pub. 1187. the following: Federal nontax criminal laws and to • Prepare a Form 1042-S, combat terrorism. If you fail to provide this Note: If you fail to correct Form(s) • Enter all the information exactly as it information in a timely manner, you may 1042-S, you may be subject to a penalty. appeared on the original Form 1042-S, be liable for penalties and interest. See Penalties on page 11. and

• Enter an “X” in the VOID box at the top You are not required to provide the If any information you correct on of the form. information requested on a form that is Form(s) 1042-S changes the information

Step 2. subject to the Paperwork Reduction Act you previously reported on Form 1042, To correct Form 1042-S:

• Prepare a new Form 1042-S. unless the form displays a valid OMB you must also correct the Form 1042 by control number. Books or records relating filing an amended return. To do this, see • Enter all the correct information on the to a form or its instructions must be the Form 1042 instructions. form, including the recipient name and retained as long as their contents may address, money amounts, and codes. become material in the administration of • Enter an “X” in the CORRECTED box VOID box. Enter an “X” in the VOID box any Internal Revenue law. Generally, tax at the top of the form. of a Form 1042-S that shows the same returns and return information are

information, including errors, as the form Step 3. To file the VOID and confidential, as required by section 6103. you previously filed with the IRS. This will CORRECTED Forms 1042-S, see the

identify the Form 1042-S you want the The time needed to complete and file Form 1042 instructions.

IRS to disregard. An “X” in the VOID box this form will vary depending on individual

will not correct a previously filed Form circumstances. The estimated average Privacy Act and Paperwork Reduction 1042-S. See Step-by-Step Instructions time is 25 minutes. Act Notice. We ask for the information on this page. on this form to carry out the Internal If you have comments concerning the Revenue laws of the United States. accuracy of these time estimates or CORRECTED box. Enter an “X” in the Sections 1441, 1442, and 1446 require suggestions for making this form simpler, CORRECTED box of Copy A only if you withholding agents to report and pay over we would be happy to hear from you. You are correcting a Form 1042-S you to the IRS taxes withheld from certain can write to the Tax Forms Committee, previously filed with the IRS. Enter an “X” U.S. source income of foreign persons. Western Area Distribution Center, in the CORRECTED box you give to the Form 1042-S is used to report the amount Rancho Cordova, CA 95743-0001. Do recipient only if you are correcting a Form of income and withholding to the payee. not send the form to this address. 1042-S previously furnished to the Form 1042 is used to report the amount Instead, see Where, When, and How To recipient. You must provide statements to of withholding that must be paid over to File on page 1. recipients showing the corrections as the IRS. Section 6109 requires you to

soon as possible. provide your employer identification

Country Codes Australia . . . . . . . . . . . . AS Burundi . . . . . . . . . . . . . BY Curacao . . . . . . . . . . . . NT

Austria . . . . . . . . . . . . . AU Cambodia (Kampuchea) CB Cyprus . . . . . . . . . . . . . CY

Select the appropriate code from Azerbaijan1 . . . . . . . . . . AJ Cameroon . . . . . . . . . . . CM Czech Republic . . . . . . EZ

the following list and enter it in box Azores . . . . . . . . . . . . . PO Canada . . . . . . . . . . . . . CA Denmark . . . . . . . . . . . . DA

16 (country code of recipient). Bahamas, The . . . . . . . . BF Canary Islands . . . . . . . . SP Djibouti . . . . . . . . . . . . . DJ Also use the following codes to Bahrain . . . . . . . . . . . . . BA Cape Verde . . . . . . . . . . CV Dominica . . . . . . . . . . . . DO complete box 18 (country code of Baker Island . . . . . . . . . FQ Cayman Islands . . . . . . . CJ Dominican Republic . . . . DR NQI), if applicable. See the

instructions for box 16 (and box Balearic Islands (Mallorca, Central African Republic CT Dubai . . . . . . . . . . . . . . TC

18, if applicable) on page 14 etc.) . . . . . . . . . . . . . . SP Chad . . . . . . . . . . . . . . . CD East Timor . . . . . . . . . . . TT

before selecting a country code. Bangladesh . . . . . . . . . . BG Chile . . . . . . . . . . . . . . . CI Ecuador . . . . . . . . . . . . EC

Note: Countries bolded and Barbados . . . . . . . . . . . BB China, People’s Republic Egypt . . . . . . . . . . . . . . EG

italicized are those with which the Bassas da India . . . . . . . BS of (including Inner Eleuthera Island . . . . . . . BF

United States had entered into an Belarus1 . . . . . . . . . . . . BO Mongolia, Tibet, and El Salvador . . . . . . . . . . ES

income tax treaty at the time these Belgium . . . . . . . . . . . . BE Manchuria) . . . . . . . . CH Equatorial Guinea . . . . . EK instructions were printed. Belize . . . . . . . . . . . . . . BH Christmas Island (Indian Eritrea . . . . . . . . . . . . . . ER

Benin (Dahomey) . . . . . . BN Ocean)2 Country Code . . . . . . . . . . . KT Estonia . . . . . . . . . . . . . EN

Abu Dhabi . . . . . . . . . . . TC Bermuda . . . . . . . . . . . . BD Clipperton Island . . . . . . IP Ethiopia . . . . . . . . . . . . . ET

Bhutan . . . . . . . . . . . . . BT Cocos (Keeling) Islands Afghanistan . . . . . . . . . . AF 2 CK Europa Island . . . . . . . . EU

Albania . . . . . . . . . . . . . AL Bolivia . . . . . . . . . . . . . . BL Colombia . . . . . . . . . . . . CO Falkland Islands (Islas

Algeria . . . . . . . . . . . . . AG Bonaire . . . . . . . . . . . . . NT Comoros . . . . . . . . . . . . CN Malvinas) . . . . . . . . . . FK

American Samoa . . . . . . AQ Bosnia-Herzegovina . . . . BK Congo (Brazzaville) . . . . CF Faroe Islands . . . . . . . . . FO

Andorra . . . . . . . . . . . . . AN Botswana . . . . . . . . . . . BC Congo, Democratic Fiji . . . . . . . . . . . . . . . . FJ

Angola Bouvet Island . . . . . . . . . BV Republic of (Zaire) . . . CG Finland . . . . . . . . . . . . . FI . . . . . . . . . . . . . AO

Anguilla . . . . . . . . . . . . . AV Brazil . . . . . . . . . . . . . . BR Cook Islands . . . . . . . . . CW France . . . . . . . . . . . . . FR

British Indian Ocean Coral Sea Islands French Guiana3 Antarctica . . . . . . . . . . . AY . . . . . . FG

Territory . . . . . . . . . . . IO Territory2 Antigua and Barbuda . . . AC . . . . . . . . . . CR French Polynesia (Tahiti) FP

Argentina . . . . . . . . . . . AR Brunei . . . . . . . . . . . . . . BX Corsica . . . . . . . . . . . . . VP French Southern and

Armenia1 . . . . . . . . . . . AM Bulgaria . . . . . . . . . . . . . BU Costa Rica . . . . . . . . . . CS Antarctic Lands . . . . . . FS

Aruba . . . . . . . . . . . . . . AA Burkina Faso (Upper Cote D’Ivoire (Ivory Coast) IV Gabon . . . . . . . . . . . . . . GB

Ashmore and Cartier Volta) . . . . . . . . . . . . . UV Croatia . . . . . . . . . . . . . HR Gambia, The . . . . . . . . . GA

Islands2 . . . . . . . . . . . AT Burma . . . . . . . . . . . . . . BM Cuba . . . . . . . . . . . . . . . CU Gaza Strip . . . . . . . . . . . GZ

-15-
Georgia1 . . . . . . . . . . . . GG Kyrgyzstan1 . . . . . . . . . KG Paracel Islands . . . . . . . PF Tokelau . . . . . . . . . . . . . TL

Germany . . . . . . . . . . . GM Laos . . . . . . . . . . . . . . . LA Paraguay . . . . . . . . . . . PA Tonga . . . . . . . . . . . . . . TN

Ghana . . . . . . . . . . . . . . GH Latvia . . . . . . . . . . . . . . LG Peru . . . . . . . . . . . . . . . PE Tortola . . . . . . . . . . . . . VI

Gibraltar . . . . . . . . . . . . GI Lebanon . . . . . . . . . . . . LE Philippines . . . . . . . . . . RP Trinidad and Tobago . . TD

Glorioso Islands . . . . . . . GO Lesotho . . . . . . . . . . . . . LT Pitcairn Island . . . . . . . . PC Tromelin Island . . . . . . . TE

Great Britain (United Liberia . . . . . . . . . . . . . . LI Poland . . . . . . . . . . . . . PL Tunisia . . . . . . . . . . . . . TS

Kingdom) . . . . . . . . . UK Libya . . . . . . . . . . . . . . . LY Portugal . . . . . . . . . . . . PO Turkey . . . . . . . . . . . . . TU

Greece . . . . . . . . . . . . . GR Liechtenstein . . . . . . . . . LS Puerto Rico . . . . . . . . . . RQ Turkmenistan1 . . . . . . . TX

Greenland . . . . . . . . . . . GL Lithuania . . . . . . . . . . . LH Qatar (Katar) . . . . . . . . . QA Turks and Caicos Islands TK

Grenada (Southern Luxembourg . . . . . . . . . LU Redonda . . . . . . . . . . . . VI Tuvalu . . . . . . . . . . . . . . TV

Grenadines) . . . . . . . . GJ Macau . . . . . . . . . . . . . . MC Reunion3 . . . . . . . . . . . RE Uganda . . . . . . . . . . . . . UG

Guadeloupe3 . . . . . . . . GP Macedonia (former Romania . . . . . . . . . . . . RO Ukraine . . . . . . . . . . . . . UP

Guam . . . . . . . . . . . . . . GQ Yugoslav Republic of) MK Russia . . . . . . . . . . . . . RS United Arab Emirates . . . TC

Guatemala . . . . . . . . . . . GT Madagascar (Malagasy Rwanda . . . . . . . . . . . . . RW United Kingdom

Guernsey . . . . . . . . . . . GK Republic) . . . . . . . . . . MA Ryukyu Islands . . . . . . . JA (England, Wales,

Guinea . . . . . . . . . . . . . GV Malawi . . . . . . . . . . . . . MI St. Helena (Ascension Scotland, No. Ireland) UK

Guinea-Bissau . . . . . . . . PU Malaysia . . . . . . . . . . . . MY Island and Tristan de Uruguay . . . . . . . . . . . . UY

Guyana . . . . . . . . . . . . . GY Maldives . . . . . . . . . . . . MV Cunha Island Group) . . SH Uzbekistan1 . . . . . . . . . UZ

Haiti . . . . . . . . . . . . . . . HA Mali . . . . . . . . . . . . . . . . ML St. Kitts (St. Christopher Vanuatu . . . . . . . . . . . . NH

Heard Island and Malta . . . . . . . . . . . . . . . MT and Nevis) . . . . . . . . . SC Vatican City . . . . . . . . . . VT

McDonald Islands . . . . HM Marshall Islands . . . . . . . RM St. Lucia . . . . . . . . . . . . ST Venezuela . . . . . . . . . . . VE

Honduras . . . . . . . . . . . HO Martinique3 . . . . . . . . . . MB St. Pierre and Miquelon SB Vietnam . . . . . . . . . . . . . VM

Hong Kong5 . . . . . . . . . . HK Mauritania . . . . . . . . . . . MR St. Vincent and the Virgin Islands (British) . . . VI

Howland Island . . . . . . . HQ Mauritius . . . . . . . . . . . . MP Grenadines (Northern Virgin Islands (U.S.) . . . . VQ

Hungary . . . . . . . . . . . . HU Mayotte . . . . . . . . . . . . . MF Grenadines) . . . . . . . . VC Wake Island . . . . . . . . . WQ

Iceland . . . . . . . . . . . . . IC Mexico . . . . . . . . . . . . . MX San Marino . . . . . . . . . . SM Wallis and Futuna . . . . . WF

India . . . . . . . . . . . . . . . IN Micronesia, Federated Sao Tome and Principe TP West Bank . . . . . . . . . . . WE

Indonesia (including States of . . . . . . . . . . FM Sarawak . . . . . . . . . . . . MY Western Sahara . . . . . . . WI

Bali, Belitung, Flores, Midway Islands . . . . . . . MQ Saudi Arabia . . . . . . . . . SA Western Samoa . . . . . . . WS

Java, Moluccas, Moldova1 . . . . . . . . . . . MD Senegal . . . . . . . . . . . . SG Windward Islands . . . . . . VC

Sumatra, Timor, etc.) ID Monaco . . . . . . . . . . . . . MN Serbia . . . . . . . . . . . . . . YO Yemen (Aden) . . . . . . . . YM

Iran . . . . . . . . . . . . . . . . IR Mongolia . . . . . . . . . . . . MG Seychelles . . . . . . . . . . . SE Yugoslavia (Kosovo,

Iraq . . . . . . . . . . . . . . . . IZ Montenegro . . . . . . . . . . YO Sierra Leone . . . . . . . . . SL Montenegro, Serbia) . . YO

Ireland, Republic of Montserrat . . . . . . . . . . . MH Singapore . . . . . . . . . . . SN Zaire (Democratic

(Eire) . . . . . . . . . . . . . EI Morocco . . . . . . . . . . . . MO Slovak Republic Republic of Congo) . . . CG

Isle of Man . . . . . . . . . . IM Mozambique . . . . . . . . . MZ (Slovakia) . . . . . . . . . LO Zambia . . . . . . . . . . . . . ZA

Israel . . . . . . . . . . . . . . IS Namibia . . . . . . . . . . . . . WA Slovenia . . . . . . . . . . . . SI Zimbabwe . . . . . . . . . . . ZI

Italy . . . . . . . . . . . . . . . IT Nauru . . . . . . . . . . . . . . NR Solomon Islands . . . . . . BP Other Country . . . . . . . . OC

Jamaica . . . . . . . . . . . . JM Navassa Island . . . . . . . BQ Somalia . . . . . . . . . . . . . SO Unknown Country . . . . . UC

Jan Mayen . . . . . . . . . . JN Nepal . . . . . . . . . . . . . . NP South Africa . . . . . . . . . SF 1 These countries are Japan . . . . . . . . . . . . . . JA Netherlands . . . . . . . . . NL South Georgia and the parties to the United States Jarvis Island . . . . . . . . . DQ Netherlands Antilles . . . . NT South Sandwich Islands SX treaty with the Commonwealth Jersey . . . . . . . . . . . . . . JE New Caledonia . . . . . . . NC Spain . . . . . . . . . . . . . . SP of Independent States. Johnston Atoll . . . . . . . . JQ New Zealand . . . . . . . . . NZ Spratly Islands . . . . . . . . PG 2 These countries are Jordan . . . . . . . . . . . . . . JO Nicaragua . . . . . . . . . . . NU Sri Lanka . . . . . . . . . . . . CE covered under the United Juan de Nova Island . . . . JU Niger . . . . . . . . . . . . . . . NG Sudan . . . . . . . . . . . . . . SU States treaty with Austrailia. Kazakhstan . . . . . . . . . KZ Nigeria . . . . . . . . . . . . . NI Suriname . . . . . . . . . . . . NS 3 Kenya . . . . . . . . . . . . . . KE Niue . . . . . . . . . . . . . . . NE Svalbard (Spitsbergen) . . SV These countries are

Kingman Reef covered under the United . . . . . . . . KQ Norfolk Island2 . . . . . . . NF Swaziland . . . . . . . . . . . WZ States treaty with France. Kiribati (Gilbert Islands) KR Northern Ireland4 . . . . . UK Sweden . . . . . . . . . . . . SW 4 Korea, Democratic Northern Mariana Islands CQ Switzerland . . . . . . . . . SZ Northern Ireland is

People’s Republic of Norway . . . . . . . . . . . . . NO Syria . . . . . . . . . . . . . . . SY covered under the United

States treaty with the United (North) . . . . . . . . . . . . KN Oman . . . . . . . . . . . . . . MU Taiwan . . . . . . . . . . . . . TW

Korea, Republic of Pakistan Kingdom. . . . . . . . . . . . . PK Tajikistan1 . . . . . . . . . . TI 5 (South) . . . . . . . . . . . KS Palau . . . . . . . . . . . . . . PS Tanzania . . . . . . . . . . . . TZ Hong Kong is not covered

Kosovo . . . . . . . . . . . . . YO Palmyra Atoll . . . . . . . . . LQ Thailand . . . . . . . . . . . . TH under the United States treaty

Kurile Islands with China. . . . . . . . . . RS Panama . . . . . . . . . . . . PM Togo . . . . . . . . . . . . . . . TO

Kuwait . . . . . . . . . . . . . . KU Papua New Guinea . . . . PP

-16-