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HomeTipsYour Guide to Understanding and Filing Your W-8BEN Form

Your Guide to Understanding and Filing Your W-8BEN Form

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United States taxpayers have an obligation to demonstrate to authorities they are correctly meeting their mandate. For non-U.S. citizens, the W-8BEN form is required to certify their legal and tax status. Besides filling the form as part of meeting the law obligations, the W-8BEN also allows the certification of the payers’ qualification for reduced tax rates as stipulated under tax treaties.

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What Is a W-8BEN Form?

The W-8BEN or Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting document is submitted to the Internal Revenue Service (IRS) by foreign citizens. The non-U.S. citizens usually fill out the form for receiving certain types of income within the United States. It establishes that the individual is both a foreign person and the owner of the income-generating business at hand.

How to Get Your W-8BEN Form

​​The W-8BEN form is supposed to be sent by the company making payments to the filling individual. Notably, the form should be returned to the company that sent the W-8BEN form but not the IRS. It’s also not supposed to be filed with a tax return.

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What Is the Role of the W-8BEN Form?

According to the United States tax laws, foreign individuals are subjected to 30% tax on US-sourced income. The sources include:

Role of the W-8BEN Form

  • Interest
  • Dividends
  • Rents
  • Royalties
  • Premiums
  • Annuities
  • Compensation for services performed
  • Substitute payments in a securities

Instructions for How to Fill Out the W-8BEN Form

Filling the W-8BEN form comes with specific instructions as highlighted below:

Line 1: Name

Indicate your legal name

Line 2: Citizenship

Enter the name of the country of which you are a citizen and not the U.S.

Line 3: Permanent Residence Address

Enter your permanent residence address, which is the address in the country where you claim to be a resident for income tax purposes. Do not enter the P.O. BOX.

Line 4: Mailing Address

Provide your mailing address if it differs from your permanent residence.

Line 5: U.S. Taxpayer Identification Number

You can enter the U.S. Taxpayer Identification Number (social security number or an individual taxpayer identification number (ITIN)).

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Line 6: Foreign Tax Identifying Number

Provide the FTIN issued by your country of citizenship. If you do not have one, you need to indicate why. Do not leave it blank or fill in “N.A.”.

Line 7: Reference Number

Payers may leave this line blank.

Line 8: Date of Birth

Enter your correct date of birth.

Line 9: Treaty Claim

If you are filling out the form to claim treaty benefits, identify the country where you claim to be a resident in order to fulfill the income tax treaty.

Line 10: Special Rates and Conditions

Under this section, if you are requesting special withholding rates, you need to refer to IRS guidelines.

Line 11: Certification

The form should be signed alongside a date by the beneficial owner of the account’s income.

Endnote

When the form is filled, it should be submitted to the right entity, the employer, and not the IRS. Since the form contains sensitive information, the employer needs to assure the employee that all data will be protected. Make efforts to safeguard the data and send it securely to the IRS.

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