W-8BEN Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting Individuals UW Madison

The early you instill processes for W-8BEN-E collection, management, and compliance, the less likely there will be issues down the road. Click here for full IRS instructions on filling out the W8BEN-E form. Your FATCA status will determine which parts of the W8BEN-E form you fill out later. If nothing seems to fit, it’s best to check “Corporation” if the business is solely owned, or “Partnership” if it’s owned by several people. Persons should use Form W-8BEN. U.S. persons file Forms W-9, W-4, and others. We’ve paired this article with Laurie Hatten-Boyd’s AP Tax Compliance webinar.

• These include freelance workers who are hired for projects outside of their home country and companies who offer international shipping services with goods that originate outside of the U.S.
• For example, if you sign a W-8BEN on July 28, 2021, it will expire on December 31, 2025.
• This applies to limited companies that provide services to a US company.
• A W-8 form is a grouping of tax forms specifically for non-resident aliens and foreign businesses who have either worked in or earned income in the US.
• The form is collected by the withholding agent or payer or when requested by a Foreign Financial Institution .
• By filing a W-8BEN, you can claim US tax reduction if your usual country of residence has an income tax treaty and any income you received is relevant to the treaty.

On the other hand, failing to fill out or submit the correct forms—whether by accident or intentionally—can cause major headaches or lead to tax penalties down the road. Depending on both the entity that has requested the W-8 and the entity who is required to complete it, there are a number of different variations of the W-8 form that you may need to complete. No matter your resident or employment status, filing taxes in the United States can be incredibly confusing. The language is complex and often refers to terms most of us have never heard before.

What happens if employers and workers don’t submit a W-8 BEN form?

We reserve the right to block IP addresses that submit excessive requests. Current guidelines limit users to a total of no more than 10 requests per second, regardless of the number of machines used to submit requests. The W-8BEN-E form can be found on the IRS website as a fillable PDF. Don’t be discouraged by the length of the form, it’s designed for several types of businesses, hence the numerous pages. The first piece of advice Dyke Yaxley provides those doing business in the US from the UK, is that filling out the W-8BEN-E form can be intimidating but don’t panic. The IRS website provides instructions to help you fill out the W-8BEN-E form.

When she’s not writing, Barbara likes to research public companies and play social games including Texas hold ‘em poker, bridge, and Mah Jongg. 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. Note that the tax withholding rate for the transfer of an interest in a partnership is 10% instead of 30%, per the Tax Cuts and Jobs Act -TCJA enacted in 2017 unless an exception applies.

Part I: Identification of Beneficial Owner

Since Harvard University is not a financial institution, only a few parts are required to be completed before Harvard University is able to issue payments to a foreign entity. However, other parts might also be necessary when conducting business with other withholding agents. As such, you may need to seek legal guidance from a tax professional outside of Harvard University with specific business use inquires. So, after what is a w8 receiving a W-8 form from your non-US citizen, non-resident alien freelancers, paying companies, and withholding agents use W-8 forms to calculate how much tax to withhold. If a contractor fails to submit the form, they will be subject to the full 30% tax rate that ordinarily applies to foreign entities. Foreign persons and entities, such as foreign corporations, trusts and estates must complete the W-8 tax form.

This form is used to report income earned by a non-resident alien for work done in the United States or for income received from U.S. sources. In situations where a foreign person or entity is receiving payments from a U.S. source, they must provide a valid W-8 tax form to ensure they are not taxed on their income by the IRS. Some countries have treaties with the US that grant their citizens and residents a lower tax rate.

What is the difference between a W-8 and W-8 BEN?

That would be the case if, for example, a foreign individual performed personal services in the United States during the year. In addition, money made by a foreigner through investments in a partnership that conducts trade or business in the U.S. would also be treated as ECI. Individuals must submit the form to the payer or withholding agent prior to receiving income or credits from them.

• Let me scroll down to line 6 and enter the permanent residence address of your organization.
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• The W-8BEN form is used by individuals or entities that are not U.S. citizens or residents who wish to claim an exemption from U.S. taxes on the income they receive from a U.S. source.
• The list of countries with relevant treaties is long and subject to change.
• If you received unemployment compensation or a tax refund, you might get Form 1099-G. Find out what it is, why you received one, and more.
• Withholding agents can be individuals, trusts, corporations, or other types of businesses.