W-8 Form
Published on August 08, 2024
by Jeff Patterson
Jeff Patterson is an American living in Scotland and joined the team at Expat Tax Online after experiencing the complexities of living abroad with a family.
Table of Contents
What is Form W-8 for?
The W-8 Form is a set of documents used by people and businesses outside the United States to prove that they are not US residents or US citizens for tax purposes.
What is the purpose of the W-8 Forms?
The W-8 Forms help the US government know how much tax to withhold from payments made to non-US residents.
By filling out this form, foreign individuals and entities can claim their foreign status and, if applicable, benefit from reduced tax rates or exemptions under tax treaties between their home country and the United States.
Here are the different types of W-8 Forms and their purposes:
- W-8BEN: This form is for individuals who want to claim foreign status and possibly benefit from tax treaty provisions. For example, if you’re a freelance artist living in France and you sell artwork to a US buyer, this form helps you avoid paying more US taxes than necessary.
- W-8BEN-E: Similar to W-8BEN, but for businesses. If your company in Germany provides consulting services to a US client, this form helps ensure that your company is taxed appropriately.
- W-8ECI: This form is for those who have income that is connected to business activities in the US For instance, if you own a shop in Canada but also have a branch in the US, this form indicates that the income from the US branch is connected to business there.
- W-8EXP: Used by foreign governments, international organizations, and other tax-exempt entities to claim exemption from tax withholding. If a foreign government receives interest from US bonds, this form helps claim the exemption.
- W-8IMY: This form is for intermediaries, such as brokers or partnerships, that receive income on behalf of others. For example, if a foreign investment fund earns income from US stocks, this form helps document the correct tax treatment.
Which is the most commonly used W-8 form?
The most commonly used W-8 form is the W-8BEN.
This form is used by individuals to confirm they are not US residents for tax purposes. It also helps them claim benefits under an income tax treaty between the US and their home country, which can reduce the amount of tax withheld on income like interest, dividends, and royalties.
What information is required to fill out a W-8BEN Form?
Filling out a W-8BEN form requires several pieces of information. Here’s a simple breakdown:
- Personal Information:
- Full Name: Your complete legal name.
- Country of Citizenship: The country you are a citizen of.
- Permanent Residence Address: Your address in your home country (not a P.O. Box).
- US Taxpayer Identification Number (TIN):
- If you have one, you need to provide your US Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN).
- Foreign Tax Identification Number:
- Your tax ID number from your home country.
- Claim of Tax Treaty Benefits:
- If your home country has a tax treaty with the US, you need to fill in details about it, such as the treaty article number. You must also confirm that you qualify for these benefits.
- Signature:
- You must sign and date the form to confirm that the information you provided is correct.
For more detailed guidance, you can check out the official IRS instructions for Form W-8BEN.
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It’s for American citizens that didn’t know they had to file U.S. tax returns each year, and have therefore fallen behind. Some more than 30 years! With the IRS Streamlined Procedure, say goodbye to overdue tax returns, late fees, and penalties.
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Where do you submit the W-8BEN Form?
You do not send the W-8BEN Form directly to the IRS. Instead, you submit it to the financial institution or the payer from whom you are receiving income.
For example, if you are earning dividends from a US company, you would provide the completed W-8BEN form to that company or its transfer agent. If you have multiple US payers or financial institutions, you need to provide a separate W-8 Form to each one.
How long is the W-8BEN Form valid?
The W-8BEN Form is typically valid for three years from the date you sign it. This means you generally need to renew the form every three years to ensure continued compliance and to avoid issues with tax withholding.
However, if there are significant changes in your circumstances, such as a change in residency or tax status, you may need to submit a new form sooner.
Renewing the W-8BEN Form involves completing a new form and submitting it to the financial institution or payer before the current form expires.
This renewal process ensures that your information is up-to-date and that you continue to benefit from any applicable tax treaty provisions or exemptions.
What happens if I don’t submit a W-8BEN Form?
If you don’t submit a W-8BEN form, the payer (like a financial institution or US company) must withhold tax at a higher rate on the income you receive.
Typically, this withholding rate is 30%.
This applies to payments such as interest, dividends, rents, royalties, and other types of income.
By submitting the W-8BEN form, you can benefit from a reduced tax rate or exemption if your country has a tax treaty with the US. Failing to submit the form means missing out on these benefits and potentially paying more taxes than necessary.
What are the differences between the W-8BEN and W-8BEN-E Forms?
The W-8BEN and W-8BEN-E forms serve similar purposes but are used by different types of filers:
- W-8BEN (for individuals):
- Purpose: Used by individuals to certify their non-US status and claim tax treaty benefits.
- Who Uses It: Foreign individuals receiving income from US sources.
- Information Required: Name, country of citizenship, foreign tax identification number, claim of tax treaty benefits, and signature.
- W-8BEN-E (for entities):
- Purpose: Used by entities such as corporations, partnerships, and trusts to certify their non-US status and claim tax treaty benefits.
- Who Uses It: Foreign entities receiving income from US sources.
- Information Required: Entity name, country of incorporation, type of entity, foreign tax identification number, claim of tax treaty benefits, and signature.
The primary difference lies in who uses the form: W-8BEN is for individuals, while W-8BEN-E is for entities.
Can I use the same W-8 Form for multiple purposes?
No, you cannot use the same W-8 form for multiple purposes. Different types of W-8 forms are designed for specific situations and entities.
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