Essentially, if you're earning any kind of US-based income as an foreign (non-US) individual or business entity, you may be required to complete the W-8BEN form.
By completing and submitting the W-8BEN form, you are confirming that you are: (1) a non-US resident; (2) the beneficial owner of the US-income; (3) Claiming a reduced US tax withholding rate (or an exemption from withholding) as a resident of a foreign country with which the US has an income tax treaty.
There are two main forms: (1) W-8BEN form is for individuals; and (2) the W-8BEN-E form is for Entities (or registered businesses like corporations, partnerships or other business entities).
The W-8BEN form is sent to the individual or company through whom you are earning US-based income. You do not need to send it to the IRS (Internal Revenue Services).
If you do not complete the form, your payment may be withheld or you will be charged the standard 30% US tax withholding rate on income that you earn from an individual or company in the United States.
By completing the W-8BEN form you may be able to reduce the US tax withholding rate to zero, depending on the US tax treaty and the article that applies to the type of US income you're earning.
You can download the W-8BEN and the W-8BEN-E forms from the IRS website along with detailed instructions on how to complete the forms. I've also created two video tutorials on how to complete the W-8BEN and W-8BEN-E forms.
HOW TO COMPLETE W-8BEN FORM?
In the video tutorial below, I walk you through the process of completing the W-8BEN form. This is that standard form for individuals like independent contractors and sole proprietors.
This is a one-pager form and fairly simple to complete. However, if you're a business entity, then you will need to complete the W-8BEN-E form, for which you will find another video tutorial further down below:
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HOW TO COMPLETE W-8BEN-E FORM?
In the video tutorial below, I walk you through the process of completing the W-8BEN-E form. This is a little more complex form to be completed by business entities like corporations and partnerships. This is an 8-page form with 30 parts.
However, depending on what type of organization you have, you will only have to complete a few parts of the form. There are many scenarios when completing the W-8BEN-E form. In this video below, I cover one of the more common scenarios which is for a corporation.
What you complete the section for claiming tax treaty benefits will depend on the type of US-income you're earning. Also, not all countries have a tax treaty with the United States, so if your country doesn't have a tax treaty with the US, then you would leave this section blank.
Hope this W-8BEN form help article and videos helped. If you have any questions, please feel free to leave them in the comments section and I will do my best to help you.
DISCLAIMER: The information provided in this video is for general information purposes only and is NOT intended as legal, accounting, financial or tax advice.
CREDITS: The W-8BEN Form is a legal tax form from the IRS (Internal Revenue Service) of the United States government | Microsoft, Windows, and the Windows logo are trademarks, or registered trademarks of Microsoft Corporation in the United States and/or other countries| Other company names may be trademarks of their respective owners.
