I fill these in for a living... (well, not actually, but it sometimes seems like it)

Every company with an account is entitled/expected to fill one in. Whether or not you get asked to do it depends on the bank and their attitude. We have one bank makes every client do it, another where we've only been asked for one of the clients.

The bank's attitude depends on the amount of fine the US extorted from them when the whole thing blew up back in 2008-14. Under the FATCA act of 2014, every bank is responsible for reporting all its customers, wether they have any US assets or ties ot not.

Being an american it will be even more complicated for you to complete because you cant tick the boxes we usually tick and have to give other details.

If you send me a pm with the form, I'll help explain what you need to put in. But I am pretty sure every bank will eventually ask you to complete one if you open a new account.

Regards


Ian

 

Every company with an account is entitled/expected to fill one in. ... If you send me a pm with the form, I'll help explain what you need to put in.

A micro-entrepreneur is not really a "company", hence for the time being I'm hoping to get away with this requirement. Not like there's any issue of accounts not being reported -- heaven forbid, I file the FBAR every year, plus the W-9 forms the banks already require.

But I guess I should prepare for this eventuality, considering my bank may either require this form right now, or one day when I change my company status to a SARL or something else. For that reason, yes, I'll take you up on your offer and send you the form, that's very nice of you and would be very helpful. Kind regards.

 

I was a professional liberal (retired July 2019) and I had two separate bank accounts, one I used as my personal account and the other I used as my "professional" account, but not designated as "professional", just two separate accounts. I never had a "professional" account and if I remember correctly it is not necessary to have one. I paid all my TVA and work expenses out of my "professional" account, but kept personal and business expenses separate. Eventually the bank asked for my SS number and I was forced to give it to them in order to keep my accounts open.

 

one I used as my personal account and the other I used as my "professional" account, but not designated as "professional", just two separate accounts. I never had a "professional" account and if I remember correctly it is not necessary to have one. I paid all my TVA and work expenses out of my "professional" account, but kept personal and business expenses separate.

This was exactly what I wanted to do too, and I heard others say that it's not necessary to have a labeled "business" account (which costs more and does not offer much more than a regular account), that you could just use a "personal" account exclusively for your business use. I thought that as long as you keep your personal and professional life in separate accounts, this should be sufficient.

The problem for me was trying to do TVA debits from an account labeled as "personal". Even though I use this "personal" account exclusively for my business purposes, the bank did not want to recognize the TVA mandate to debit the account for TVA payments going to the government. Although they made an "exception" for the first time this type of debit was made, afterwards they sent me a long and complicated letter stating basically that I had to have a "business" account for those types of transactions.

 

What I suspect is happening here is that the bank wants you to declare one account as "professional" so that they can charge you the (much higher) fees for the account. However, as a micro-entrepreneur the account is still in your name - and for that, they really need to be asking you for a W-9 rather than the W8-BEN.

But, since you are not a "foreign person" as far as US tax law is concerned, you would be lying if you filled out a W8-BEN. I think in this case it's the bank that doesn't understand the use of these forms. You may want to point out this part of the instructions for the W8-BEN form:

Do not use Form W-8BEN if you are described below.

• You are a foreign entity documenting your foreign status, documenting your chapter 4 status, or claiming treaty benefits. Instead, use Form W-8BEN-E.
• You are a U.S. citizen (even if you reside outside the United States) or other U.S. person (including a resident alien individual). Instead, use Form W-9 to document your status as a U.S. person.

This is from https://www.irs.gov/instructions/iw8ben if you need further information.

 

This is from https://www.irs.gov/instructions/iw8ben if you need further information.

Thanks Bev. What's your take on the purpose of this form (W-8BEN-E)? The instructions state:

Purpose of Form
This form is used by foreign entities to document their
statuses for purposes of chapter 3 and chapter 4, as well
as for certain other Code provisions as described later in
these instructions.
Foreign persons are subject to U.S. tax at a 30% rate
on income they receive from U.S. sources that consists of:
...

Just looking at this it doesn't seem applicable at all...


And, if you'll permit me asking, when you ran your French business, were you ever required to file the form W-8BEN-E by your bank?

Kind regards.

 

All of my impôts, TVA, URSSAF and CIPAV debits were automatically taken out of my "professional" account without any problems with my bank. And the only form I signed was for declaring my SS number.

 

I remember a long time ago when I had two personal accounts at Societe Generale, one for business and the other for personal. One day a bank employee suggested I change one of my accounts to a professional account for them to manage. I thought, what is there to manage since I didn't have a lot of activity on my accounts. He set it up and when I received my next bank statement I was shocked at the service charge for a professional account. I went back to the bank and told the man he never said there would be a charge and I closed that account and was reimbursed the service charge. And in fact I closed both accounts and went with HSBC which had no problem with me having two checking accounts.

 

And in fact I closed both accounts and went with HSBC which had no problem with me having two checking accounts.

I have an account with HSBC for all my personal transactions, but the problem for me is that the nearest branch is almost 80 km away. That is why I decided to try professional banking (under a personal account) at a local bank down the street. One bank refused to open a personal account for a micro-entrepreneur business, and insisted on a professional account with a Form W-8BEN-E. Needless to say, I refused and went to another bank, where they grudgingly they allowed me to open a personal account. They were fine with URSSAF debits and other "professional" transactions until a TVA debit occurred. Apparently that was a problem for them, for some reason. They sent me a long and complicated letter which even my French friend could not understand. We went in for an appointment with a "personal banking" representative, who could not answer this "business banking" question (!), and who told me that changing my account from a personal to a business is normally required and that this would be just a "simple internal parameter adjustment". Never mentioned the higher fees, took my documents, and said they would get back to me. Two months later and still no news. Account seems to have stayed as "personal". We'll see where this goes.

 

OK all.

I did eventually help Kroder with this, and thought it might be useful to share the info in case some others come up against the same issue.

YMMV, but this assumes your ME basically is involved only in buying and selling goods or services or profit. Example: a consultant who sells his time by the hour to customers.

The act is very badly worded, and the notes are only partially helpful. There is a flowchart which you follow to ascertain the organisation's FATCA status. Under the FATCA act, an ME might actually fall into either Corporation OR Disregarded Entity. Stupid, but then the whole FATCA thing is stupid.

In my view, Corporation is safest. It is also probably what the bank want you to tick in order to have a business account. You can argue the toss with them if you want. I wouldn't.

Either way, you complete the rest of the form as described below. Assuming the form the bank gave you is W-8BEN-E (Rev. July 2017). (It's top left on form. If so, that's the latest version.)

Much of the form you can ignore because it does not apply. Here's what to fill in:

FIRST PAGE

Part 1:
Under 1, write the trading name of your micro entreprise, eg "JS Services". If it is your own name, put your own name "John Smith".

Under 2, put France.

Ignore 3.

Under 4, Chapter 3 Status, tick Corporation. (A ME apparently fits under the US FATCA definition of corporation, even though it isn't one and doesn't fit like that in France...)

Under 5, Chapter 4 Status, tick Active NFFE.

(To arrive at this Active Status, the majority of your ME's income must come from selling goods and services. If the ME makes it somehow else, eg. from renting property, or as interest paid to you as a lender, or dividends from a share portfolio, those are considered passive income and so you would tick a different box. The important thing it is your "Businesses" income coming through the new Bank Account which we consider here, not your personal income that doesn't pass through the business.)

Under 6, put the business/trading address of your ME. (This can be your home address if you don't have separate premises).

Ignore 7, as long as the correspondence address is the same as the trading address.

Under 8, put your US TIN, if you are from US. Or your UK UTR, if from Blighty. Or whatever else passes for a TIN (Taxpayer Identification Number) in the country where you pay your tax. If more than one country... you should put all the TINs.

Ignore 9a. Put your French tax number under 9b (assuming you have got this).

Ignore 10.

You can now ignore everything else on the form until Part XXV on page 7. Tick Box 39.

Ignore everything else up until Part XXX, where you sign, print name, put the date. Don't forget to tick the box under the signature to certify you have capacity...

That should be it. Such a waste of paper!


A very boring post, I know. Hope it helps others.


Kind regards



Ian

 

Just wanted to say that all this info, particularly Ian's response, was really helpful. Thanks so much for taking the time to write it.

 

Thanks. I still have to suffer doing this for clients, glad I can help others avoid it!

Kind regards


Ian