What Is IRS Form W-8?

Proceeds that are considered “effectively connected income” (ECI) are generally not subject to the same 30% tax withholding rate that applies to interest and rent. Your tax will then either graduate to the rate paid by residents or resident aliens or to the lowest rate under the applicable tax treaty. Trading of securities or commodities through US brokers does not fall under this form. The form establishes that the applicant is a foreign individual as well as the owner of the business in question. So, by filling this form, you can either claim an exemption/reduction in tax based on not deriving income from one of the sources above or due to your country of residence’s tax treaty with the US.

The certifications in Part II must be included in a substitute form only if treaty benefits are claimed, and then only to the extent that the certifications are required. For example, Form W-8BEN, line 10 (Special rates and conditions), is not required if the form is being requested from an individual receiving a payment of U.S. source dividends from stocks that are actively traded on an established securities market. The substitute Form W-8BEN must include a statement that if the person providing the form is a resident in a FATCA partner jurisdiction (that is, a Model 1 IGA jurisdiction with reciprocity), certain tax account information may be provided to the jurisdiction of residence. If you are claiming treaty benefits as a resident of a foreign country with which the United States has an income tax treaty for payments subject to withholding under chapter 3 or under section 1446(a) or (f), identify the country where you claim to be a resident for income tax treaty purposes. For treaty purposes, a person is a resident of a treaty country if the person is a resident of that country under the terms of the treaty.

Why Is a W-8BEN-E Required?

Alternatively, you may request the Form W-8 or W-9 directly from each grantor or owner. 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, however, inconsistent claims are made for the same portion of a payment, you may either reject both claims and request consistent claims for that portion of the payment, or you may choose which reduction in rate to apply. Certain entities that are disregarded for U.S. tax purposes may be recognized for purposes of claiming treaty benefits under an applicable tax treaty (see the definition of Hybrid entity,later). A hybrid entity claiming treaty benefits is required to complete Form W-8BEN-E.

• On the transfer of a partnership interest (other than an interest in a PTP) to which withholding under section 1446(f) applies, the transferee is the withholding agent and must withhold 10% of the amount realized.
• 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).
• For example, a handwritten GIIN located just outside of line 9a with a corresponding arrow pointing to line 9a is a properly provided GIIN for this purpose..
• If the GIIN or FTIN does not fit in the space provided, you may provide a GIIN or FTIN that is indicated and clearly identified somewhere else on the form, or on a separate attached sheet, as long as the GIIN or FTIN is clearly identified as being furnished with respect to line 9a or 9b, respectively.
• W-9 forms are also IRS forms used to provide or confirm a person’s name, address, and taxpayer identification number (TIN).
• However, a failure to establish an entity type or make a required certification is not inconsequential.

The payee must have a valid Social Security number or individual taxpayer identification number (ITIN) with the U.S. government. In short, if you are a foreign individual or company that earns income from sources in the US, you need to complete and file a W8 form with your payers or withholding agents. There are different types of W8 forms that apply in different circumstances to different entities. You should always be aware of any possible tax treaties your resident country has with the US in order to apply for exemptions or rate reductions from what is a w8 your tax withholdings. If you are claiming a reduced rate of, or exemption from, withholding under an income tax treaty you must enter the country where you are a resident for income tax treaty purposes and check the box to certify that you are a resident of that country. In addition, if you are not using this form to document a financial account described above, you may provide the FTIN issued to you by your jurisdiction of tax residence on line 9b for purposes of claiming treaty benefits (rather than providing a U.S. TIN on line 8, if required).

Who Can File W-8 Forms?

For this purpose, you may use the list maintained at IRS.gov/businesses/international-businesses/united-states-income-tax-treaties-a-to-z to check whether a treaty exists and is in force. Form W-8BEN must be signed and dated by the beneficial owner of the amount subject to withholding or the account holder of an FFI (or an agent with legal authority to act on the person’s behalf). If Form W-8BEN is completed by an agent acting under a duly authorized power of attorney for the beneficial owner or account holder, the form must be accompanied by the power of attorney in proper form or a copy thereof specifically authorizing the agent to represent the principal in making, executing, and presenting the form. The agent should also check the box indicating that the agent has capacity to sign for the beneficial owner.

However, if you use Form W-8BEN to claim treaty benefits, a move to the United States or outside the country where you have been claiming treaty benefits is a change in circumstances. In that case, you must notify the withholding agent, payer, or FFI within 30 days of the move. If you own the income or account jointly with one or more other persons, the income or account will be treated by the withholding agent as owned by a foreign person that is a beneficial owner of a payment only if Forms W-8BEN or W-8BEN-E are provided by all of the owners.

What is a W-9 tax form?

For purposes of completing this form as a hybrid entity making a treaty claim (including a disregarded entity), you are treated as the beneficial owner and should be identified on line 1. If you are a disregarded entity or branch, do not enter your business name. Instead, enter the legal name of your owner (or, if you are a branch, the entity that you form a part of) (looking through multiple disregarded entities if applicable).

These instructions are not inclusive of all requirements that may apply to a withholding agent for validating Forms W-8. A withholding agent should also reference the applicable regulations under chapters 3 and 4 and the instructions for each Form W-8 listed below. A hybrid entity is any person (other than an individual) that is treated as fiscally transparent for purposes of its status under the Code but is not treated as fiscally transparent by a country with which the United States has an income tax treaty. A hybrid entity is required to provide its chapter 4 status if it is receiving a withholdable payment.

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. 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.

If you’re a dual citizen, you should enter the country where you are both a resident and a citizen on the date you complete the form. If you hold U.S. citizenship (with or without citizenship with another country), you should not fill out Form W-8BEN. The Internal Revenue Service, America’s tax authority publishes all of its forms and instructions at , including the W-8BEN form and Instructions for Form W-8BEN.