ExpertEASE: International Giving and Correspondent Banks

NGOsource will be featuring a new blog series called "ExpertEASE," intended to complement our existing LegalEASE blog. These periodic articles will feature the expertise of a member of the international grantmaking community to help shed light on issues of interest to our community. For this first issue, we've asked Crown Agents Bank to provide a background on what it means to be a "correspondent bank," as well as some of the key obstacles that charities face in the delivery of grants abroad.

An Introduction to Withholding and Form W-8

Many of our NGOs and grantmaker members ask about the Form W-8. In this post we’ll explain the purpose of this form as well as the meaning of “withholding” for U.S. tax purposes. Generally, all non-U.S. residents and entities that receive payments from sources in the U.S. are subject to U.S. tax. This standard tax rate is set at 30 percent of income received. Income items that are subject to this tax include dividends on U.S. securities as well as grants or payments for services from U.S. entities, including businesses and foundations.

Equivalency Determination Validity Period: Timing Your ED Request

As we bring another year to a close at NGOsource, we invite private foundations and donor advised funds (“grantmakers”) to think about how to maximize equivalency determination (ED) validity periods. The ED validity period, which is dictated by U.S. tax law, indicates when a grantmaker can rely on the written advice provided in the ED. The validity period of an ED is based on an organization’s fiscal year.