About Instructions for the Requester of Forms W 8 BEN, W 8 BEN E, W 8 ECI, W 8 EXP, and W 8 IMY Internal Revenue Service

See Requesting Prior Versions of Form W-8, later, including the limitations on such use. The accompanying instructions for certain Forms W-8 were updated (Rev. October 2021) to reference the use of the forms by a foreign person that is a seller of a life insurance contract (or interest therein) or a foreign person that is a recipient of a reportable death benefit for purposes of reporting under section 6050Y. A recalcitrant account holder includes an individual who fails to comply with the requests of an FFI for documentation and information for determining the U.S. or foreign status of the individual’s account, including furnishing this Form W-8BEN when requested. You must provide Form W-8BEN to the payor (as defined in Regulations section 1.6050Y-1(a)(11)), to establish your foreign status if you are an individual receiving a payment of reportable death benefits for purposes of section 6050Y or chapter 3. Entities from countries that have tax treaties with the US may enjoy lower tax withholding rates on types of income that are exempted from tax withholding or qualify for lower rates. Different countries that have tax treaties with the US may have different terms and enjoy different tax benefits.

• Let’s say that a resident of another country purchases stock in a U.S. publicly-traded company, which pays dividends to the nonresident.
• As such, they are a critical part of a foreign individual or business’ tax minimization strategy.
• Payments to certain U.S. branches treated as effectively connected income.
• However, an account that is held by a single-member disregarded entity is treated as held by the entity’s single owner.

The contractor must not send the paperwork to the IRS once it is completed. Remind your contractor that the form includes sensitive information, so make sure you deliver it safely. Furthermore, this party or entity is usually the individual or organization from whom you received pay.

Who Needs to Fill Out Form W-8BEN?

If you are an excepted nonfinancial group entity in liquidation or bankruptcy you must check the box to certify that you meet all of the requirements for this status. You must also provide the date that you filed a plan of liquidation, plan of reorganization, or bankruptcy petition. If you are a territory financial institution you must check the box to certify that you meet all of the requirements for this status. If you are a nonreporting financial institution under an applicable IGA because you qualify as an owner-documented FFI under the regulations, do not check “Nonreporting IGA FFI.” Instead, you must check “Owner-documented FFI” and complete Part X rather than this Part XII. Complete the required portion of this form before signing and providing it to the withholding agent. See Entities Providing Certifications Under an Applicable IGA under Special Instructions, later..

• If you are an entity maintaining an account with an FFI, the FFI may request that you provide this Form W-8BEN-E in order to document your chapter 4 status.
• Form W-8BEN is used by foreign individuals who receive nonbusiness income in the U.S., whereas W-8BEN-E is used by foreign entities who receive this type of income.
• If you are a dual citizen, enter the country where you are both a citizen and a resident at the time you complete this form.
• See instructions for Line 9a for when a GIIN is required for a nonreporting IGA FFI (including a trustee of a trustee-documented trust that is a foreign person).
• Furthermore, this party or entity is usually the individual or organization from whom you received pay.

See Hybrid Entity Making a Claim of Treaty Benefits under Special Instructions, later. Give Form W-8BEN-E to the person requesting it before the payment is made to you, credited to your account, or allocated. If you do not provide this form, the withholding agent may have to withhold at the 30% rate (as applicable under chapters 3 or 4), backup withholding rate, or the rate applicable under section 1446. If you receive more than one type of income from a single withholding agent for which you claim different benefits, the withholding agent may, at its option, require you to submit a Form W-8BEN-E for each type of income. Generally, a separate Form W-8BEN-E must be given to each withholding agent.

Where should the finished W8-BEN form be sent by the contractor?

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. If such change in circumstances occurs, the FFI may provide you with oral or written confirmation (including by email) of its new chapter 4 status rather than providing a new Form W-8, and you must retain a record of this confirmation. For chapter 4 purposes, a change in circumstances generally occurs when there is a change in a person’s chapter 4 status. You must treat a Form W-8 as invalid when you know or have reason to know of a change in circumstances that affects the correctness of the form.

• Form W-8BEN is “the Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals)”.
• A foreign reverse hybrid entity should only file a Form W-8BEN-E for payments for which it is not claiming treaty benefits on behalf of its owners and must provide a chapter 4 status when it is receiving a withholdable payment.
• The W-8BEN-E is required, as foreign businesses are subject to the same withholding tax rate as individuals—30%.
• Alternatively, you may choose to apply only the claim made by the entity, provided that the entity may be treated as the beneficial owner of the income.
• If the applicable certifications do not appear on any Form W-8 (if, for example, new regulations provide for an additional status and this form has not been updated to incorporate the status) then you may provide an attachment certifying that you qualify for the applicable status described in a particular Regulations section.

In most cases, Form W-8BEN is only completed when the withholding agent, payer, or foreign financial institution requests it. Moreover, it becomes effective on the date it is signed and expires on the final day of the third calendar year after that. If you are working overseas and are a non-resident foreigner who is the beneficial owner of an amount subject to US withholding tax, you must fill out Form W-8BEN.

Everything to Run Your Business

A completed and signed W-8BEN is required for all reportable tax transactions made to a Nonresident Alien (NRA) of the United States. As mentioned earlier, the W-8BEN is the equivalent of the W-9 used for US persons. Tax authorities often ask for written agreements to help establish that a valid independent contracting arrangement is in place (rather than employment) and to ensure that taxes for contractors are being paid correctly. Failing to provide those documents (whether via an audit or a less formal inquiry) can make it more difficult for the business to establish that it has acted within the law.

In other words, it is filled out and filed by foreign individuals or companies who lack US residency status but have worked or earned income in the US. Give Form W-8 BEN to the withholding agent or payer if you are a foreign person and you are the beneficial owner of an amount subject to withholding. Form W-8BEN (“Certificate of Foreign Status w8 form definition of Beneficial Owner for United States Tax Withholding and Reporting”) must be submitted by foreign persons who receive certain types of income in the United States. The form, sometimes referred to as a “certificate of foreign status,” establishes that the individual is both a foreign person and the owner of the business in question.