EXEMPT PAYEES Clause Samples
The "Exempt Payees" clause defines which parties are not subject to certain withholding tax requirements, such as those under the Pay As You Earn (PAYE) system. In practice, this clause typically lists specific entities or individuals—such as corporations, government agencies, or tax-exempt organizations—that are not required to have taxes withheld from payments made to them. By clearly identifying exempt payees, the clause ensures compliance with tax regulations and prevents unnecessary withholding, thereby streamlining payment processes and reducing administrative burdens for both payers and payees.
EXEMPT PAYEES. If the Organization is exempt from backup withholding and information reporting, it must complete a certification to that effect provided by the Bank. It must also provide the Bank with its Taxpayer Identification Number to be considered exempt. The following lists payees that are exempt from backup withholding and information reporting. For interest and dividends, all listed payees are exempt except item (7). For broker transactions, payees listed in (1) through
EXEMPT PAYEES. If you are exempt from backup withholding and information reporting, you must submit a completed certification to the Bank. You must also provide the Bank with your TIN to be considered exempt.
EXEMPT PAYEES. If the Customer is exempt from backup withholding and information reporting, it must complete a certification to that effect provided by the Bank. The Customer must also provide the Bank with its Taxpayer Identification Number to be considered exempt. The following lists payees that are exempt from backup withholding and information reporting. For interest and dividends, all listed payees are exempt, except item (g) below. For broker transactions, payees listed in (b) through (k) below, a corporation and a person registered under the Investment Advisers Act of 1940 who regularly acts as a broker, are exempt. Payments subject to reporting under sections 6041 and 6041A are generally exempt from backup withholding only if made to payees described in items (a) through (e), except that a corporation which provides medical and health care services or bills and collects payments from such services is not exempt from backup withholding or information reporting. Only payees described in items (b) through (e) below are exempt from backup withholding for barter exchange transactions, patronage dividends and payments by certain fishing boat operators.
(a) a corporation;
(b) an organization exempt from tax under section 501(a), or an individual retirement plan (IRA), or a custodial account under 403(b)(7) of the Internal Revenue Code if the account satisfies the requirement of section 401(f)(2) of the Internal Revenue Code;
(c) the United States or an agency or instrumentality thereof;
(d) a state, the District of Columbia, a possession of the United States or any political subdivision or instrumentality thereof;
(e) a foreign government or a political subdivision, agency or instrumentality thereof;
(f) a dealer in securities or commodities required to register in the United States, the District of Colombia or a possession of the United States;
(g) a futures commission merchant registered with the Commodity Futures Trading Commission;
(h) a real estate investment trust;
(i) an entity registered at all times during the tax year under the Investment Company Act of 1940;
(j) a common trust fund operated by a bank under section 584(a) of the Internal Revenue Code;
(k) a financial institution;
(l) a middleman known in the investment community as a nominee or custodian; and
(m) a trust exempt from tax under section 664 of the Internal Revenue Code or described in section 4947. Payments that are not subject to information reporting are also not subject to backup withholding. ...
EXEMPT PAYEES. If the Organization is exempt from backup withholding and information reporting, it must complete a certification to that effect provided by the Bank. It must also provide the Bank with its Taxpayer Identification Number to be considered exempt. The following lists payees that are exempt from backup withholding and information reporting. For interest and dividends, all listed payees are exempt except item (7). For broker transactions, payees listed in (1) through (11) and a person registered under the Investment Advisers Act of 1940 who regularly acts as a broker are exempt. Payments subject to reporting under sections 6041 and 6041A are generally exempt from backup withholding only if made to payees described in items (1) through (5), except that a corporation that provides medical and health care services or bills and collects payments from such services is not exempt from backup withholding or information reporting. Only payees described in items (2) through (5) are exempt from backup withholding for barter exchange transactions, patronage dividends, and payments by certain fishing boat operators.