Instructions for Form W-8BEN-E 10 2021 Internal Revenue Service

what is a w8

Also consider that the form is sent to the company requiring this form, not to the IRS. A W-8 form (Form W-8BEN, W-8BEN-E form, or W-8 form) is intended for someone who is not a U.S. citizen or resident of the U.S. and who performs work and/or earns income in the United States, or for foreign companies that earn income in the United States. Although filling out Form W-8BEN by foreign non-resident aliens may be a tedious task, due to the numerous tax treaties the U.S. government has with other countries, it will be well worth the time spent in many cases. For more global supplier tax compliance information, read the white paper. We ask for the information on this form to carry out the Internal Revenue laws of the United States. We need it to ensure that you are complying with these laws and to allow us to figure and collect the right amount of tax.

  • An account holder is generally the person listed or identified as the holder or owner of a financial account.
  • It’s used by individuals who want to claim tax treaty benefits or foreign status to exempt them from tax withholding.
  • The student or researcher must use Form W-4 for any part of such income for which he or she is not claiming a tax treaty withholding exemption.
  • The design of the substitute form must be such that the information and certifications that are being attested to by the penalties of perjury statement clearly stand out from any other information contained in the form.

Additionally, tax ID information, such as US Taxpayer Identification Numbers (TIN) and EU Value Added Tax (VAT) numbers also have to be validated.This article will explore W-8 forms and W-9 forms, EU VAT and US TIN, their purpose, differences and how to know when to use which one. A form that satisfies these substitute forms requirements may be treated as a similar agreed form for purposes of an applicable IGA unless the partner jurisdiction declines such treatment. You may accept this representation regardless of whether the QI represents it acts as a QDD (by checking line 16a in Part III). The representation on Line 15e does not apply to payments made to a QI when acting as a QDD. You are not considered to have reason to know of a change in circumstances if an FFI’s chapter 4 status changes solely because the jurisdiction where the FFI is resident, organized, or located is treated as having an IGA in effect or if the jurisdiction had a Model 2 IGA in effect and is later treated as having a Model 1 IGA in effect.

W-8BEN: When to Use It and Other Types of W-8 Tax Forms

The information provided in this article is for general purposes only and does not constitute personal financial advice. Please consult with your own professional advisor to discuss your specific financial and tax needs. You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless the form displays a valid OMB control number. Books or records relating to a form or its instructions must be retained as long as their contents may become material in the administration of any Internal Revenue law. Generally, tax returns and return information are confidential, as required by section 6103.

Validating tax identification information is recommended for all new and existing suppliers. HICX offers digitalized solutions to help drive logic for suppliers to know which form they should fill out and to help collect relevant information and manage these activities with suppliers at scale, through initiatives that can be initiated for collecting and storing all required information. Internal Revenue Service’s TIN and European Union’s VAT are tax ID numbers used for this exact purpose, that is, in the administration of tax laws and as such are a critical part of W-8 and W-9 forms. Inspired Investor brings you personal stories, timely information and expert insights to empower your investment decisions. Furthermore, the products, services and securities referred to in this publication are only available in Canada and other jurisdictions where they may be legally offered for sale. Information available on the RBC Direct Investing website is intended for access by residents of Canada only, and should not be accessed from any jurisdiction outside Canada.

Types of W-8 Forms

However, a failure to establish an entity type or make a required certification is not inconsequential. 3) You are claiming a reduced withholding tax rate because you’re a resident of a foreign country with which the U.S. has an income tax treaty. That the individual is eligible for a reduced rate of tax withholding, or is exempt entirely, due to an income tax treaty between his home country and the United States. In addition, you may provide the FTIN issued to you by your jurisdiction of tax residence on line 6a for purposes of claiming treaty benefits (rather than providing a U.S. TIN on line 5, if required).

The forms are submitted to the payer or withholding agent, and not the IRS. The forms vary, but the key information requested includes the name of the individual or business, address, and TINs. If you are an excepted nonfinancial start-up company you must check the box to certify that you meet all of the requirements for this status. You must also provide the date you were formed or your board passed a resolution (or equivalent measure) approving a new line of business (which cannot be that of a financial institution or passive NFFE). If you are claiming an exemption from withholding for purposes of chapter 3, however, use Form W-8EXP.

What To Do If You Don’t Receive Form W-8

The payee is generally required to supply a valid U.S. taxpayer identification number on Form W-8. The withholding agent is required to confirm the number with IRS databases. Withholding can also be required from “fixed or determinable annual or periodic” (FDAP) income, which can include interest, dividends, royalties, rent payments, fellowships, or even scholarships.

If your country of residence for tax purposes has issued you a tax identifying number, enter it here. If you are a restricted distributor you must check the box to certify that you meet all of the requirements for this status. Check the box to certify that you have provided or will provide the auditor’s letter (in lieu of the information required by line 24b) that satisfies the requirements reflected on this line. If you are a sponsored, closely held investment vehicle, you must check the box to certify that you meet all of the requirements for this certified deemed-compliant status. If you are a certified deemed-compliant FFI with only low-value accounts, you must check the box to certify that you meet all of the requirements for this certified deemed-compliant classification. If you are a certified deemed-compliant nonregistering local bank, you must check the box to certify that you meet all of the requirements for this certified deemed-compliant status.

Where Can I Download Form W-8BEN?

As the US tax code system is so intricate, it can create various challenges for businesses which need to gather data about tax ID for suppliers operating within the US. In the unfortunate case of completing the wrong form, or filling out the right form but with incorrect information, the impact on the organization can be immense due to hefty fines. W-8 forms also expire every 3 years which creates additional operational inefficiencies as both sides should be keeping up to date with the forms and the data.

  • The Internal Revenue Service requires W-8BEN because foreign individuals are normally subject to a 30% tax withholding, but they may qualify for a reduced rate of taxation.
  • See Definitions, earlier, or, for an account maintained by an FFI covered by a Model 1 or Model 2 IGA with respect to the account, the definition of account holder in an applicable IGA to determine if you are the account holder.
  • Well, there are 5 different types of W8 forms that apply to different types of businesses or entities, depending on their status, country, and income-generating activities in the US.
  • A summary of the specific changes to each withholding certificate is provided in the grid below.
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