The IRS generally subjects foreign people to United States tax at a rate of 30 percent on income they receive from domestic sources. IRS Form W8-BEN exists to allow certain persons to claim eligibility for reduced rates or exemptions from these taxes as residents of a foreign country with which the United States has an income-tax treaty.
- Skill level:
Things you need
- IRS Form W-8BEN and instructions
Determine that Form W-8BEN is an appropriate form for you to use. The form establishes that you are not a United States citizen or an owner or foreign partner receiving a beneficial share in the income for which Form W-8BEN is being provided. You also can use it to claim a tax exemption or reduced rate of taxation due to a tax treaty between the United States and your foreign country.
Review the list of filing circumstances at the top of Form W-8BEN that may require you to fill out and file a different form.
Provide your individual or organizational name and your country of incorporation on lines 1 and 2.
Check a single box on line 3 to indicate the individual, organizational or corporate form of the beneficial owner.
Provide your permanent address on line 4 and, if different, your mailing address on line 5. Do not use a P.O. box or an "in-care-of" address as a permanent address.
Fill out your taxpayer-identification number, your foreign tax-identifying number and any useful reference numbers that may assist the payer or withholding agent on lines 6, 7 and 8.
Fill in the applicable boxes on lines 9a through 9e to certify that you are eligible for tax-treat benefits as a resident of the foreign country that you name on line 9a.
Follow Form W-8BEN's instructions to provide any additional information that applies to you and explanations on line 10.
Check the box on line 11, and attach the appropriate statement if there are notional-principal contracts producing income that is not effectively connected with a business or trade conducted in the United States.
Sign and date the form, and file it with the withholding agent or payer of income.
Tips and warnings
- Form W8-BEN is essentially a tax-withholding form that specifies the tax rate to be withheld from income originating in the United States.
- Avoid problems by consulting with an international-tax lawyer who specializes in matters pertaining to tax enforcement in foreign jurisdictions before you fill out IRS Form W8-BEN. The form is considered deceptively simple by some international-tax experts.